Operating system vendor Symbian Ltd. announced it will cut its licensing fees in half in a bid to counter encroaching competition from Microsoft Corp.’s Windows Mobile OS and Linux OS.
Symbian currently charges handset makers $5 per phone (for shipments of more than 2 million units) to use its Symbian OS. The company said it will reduce its licensing prices to as low as $2.50 per phone.
“Symbian is focused on driving down the costs to our customers of developing and building Symbian OS phones while constantly enhancing the phones’ performance,” said Nigel Clifford, Symbian’s new chief executive officer. Clifford took the helm of the company after Symbian’s former CEO stepped down for unexplained reasons. “I am confident that our new pricing models will prove to be appealing to handset manufacturers and my initial discussions with our customers and partners is very positive. By supporting our customers with flexible pricing options, we can target a much wider and deeper market and drive Symbian OS into the high volume phone segments.”
Although Symbian commands the smart-phone OS market, the company has been losing share to the likes of Microsoft’s Windows Mobile, Research In Motion Ltd.’s BlackBerry and the open-source platform Linux. Indeed, research firm Diffusion Group said Symbian enjoyed a market share of 51 percent last year, followed by Linux with 23 percent and Windows Mobile with 17 percent. However, the group predicts Symbian will lose its dominant position by 2010. In that year, the research firm expects Symbian to come in third behind Windows Mobile’s 29 percent and Linux’s 26 percent.
Symbian has long been discussing its plans to get into the “feature phone” market, which comprises the vast majority of handset sales. Most Symbian-based phones today are lumped into the “smartphone” market, which represents a relatively small part of the 800-million-unit-per-year mobile phone industry. Although Nokia Corp. continues to lend its support to Symbian, the company has largely failed to attract other licensees.
As part of its effort to broaden its appeal, Symbian announced that, along with Nokia and Freescale Semiconductor Inc., it developed a low-cost 3G reference design for Symbian OS devices. The companies said the reference design would allow other handset makers to more easily build low-cost Symbian 3G devices.
What is unclear is how Symbian’s new pricing model will affect the company’s financial situation. Symbian does not disclose its earnings, but those in the industry believe the company is not profitable.
