LOS ANGELES–In its eight-year history, Symbian has had one profitable year–last year, its first in the black. While this is a critical turning point in its business fortunes, one likely to be repeated this year and henceforth, smart-phone penetration worldwide is about 7 percent of all phone shipments and only 4 percent in the United States.
Symbian’s chief executive officer, Nigel Clifford, took the long view in an interview during last week’s CTIA Wireless I.T. & Entertainment show: not only will the Symbian operating system hold its roughly two-thirds global market share against rivals, it will use Nokia Corp., its largest shareholder and leading vendor partner, as a “snow plow” to open the nascent U.S. smart-phone market.
That stratagem absolutely requires patience and perspective. Operating systems don’t sell themselves; they really only thrive as “joint propositions” between network operators, handset vendors and application developers, Clifford acknowledged. And Nokia currently faces big hurdles in regaining its U.S. footing as arch rival Motorola Inc. gathers critical momentum in its favor domestically.
Clifford patiently acknowledged that the Nokia-Motorola rivalry might affect Motorola’s use of the Symbian OS; Moto currently has three handsets running Symbian, none in the U.S., and it may be reluctant to aid its rival by adopting the Symbian OS. Thus Clifford turned to citing Symbian OS licensees such as Samsung Electronics Co. Ltd. and Sony Ericsson Mobile Communications L.P. as likely parties to help carry the day in the U.S. marketplace.
Meanwhile, competition is nipping at Symbian’s heels. It’s worthwhile to be paranoid, David Wood, Symbian’s executive vice president for research, told a Smart Phone Summit audience last week. Linux OS is gaining ground and is likely to continue doing so, said Gerry Purdy, vice president and chief analyst at Frost & Sullivan, during a smart-phone analysts’ panel. As for competition from Microsoft Corp.’s Windows Mobile OS, Clifford said, Symbian OS’ availability on a range of devices designed for numerous market segments will help his firm meet the challenge. (Incidentally, in a recent, unrelated interview, Microsoft’s Susan Del Bene, a vice president for marketing, made the identical argument for Windows Mobile vis-a-vis Research In Motion’s proprietary OS.)
Symbian’s fortunes in the U.S., of course, are intimately tied to the uptake of smart phones here. And Clifford agreed with the proposition that, in fact, smart-phone uptake in the U.S. and Symbian’s fortunes may well lie a few years in the future–a short period compressed by technology’s speed of innovation–as teens living in a handheld, multimedia world grow up to drive device spending of their own, with smart phones an accepted part of the landscape.
By that time, Wood told a Smart Phone Summit audience, mobile handsets likely will have supplanted many disparate multimedia devices to play a central role in individuals’ lives.
In fact, Clifford pointed to Japan as proof that his company’s aspirations are “not a fantasy” and that smart phones have already achieved this status in select societies across the globe. Meanwhile, according to Jerry Panagrossi, vice president for Symbian’s U.S. operations, Symbian’s network operator review board provides a catalyst to new partnerships and channels operators’ requirements back to Symbian to help it grow its U.S. market.
Clifford’s pointed about the U.S. market for smart phones reflected the view he presented to the summit audience. Symbian has discerned four basic stages to smart-phone uptake, he said. First comes market saturation?a “tense place for operators” he said, in a “zero-sum game” to grow subscriber numbers and average revenue per user by taking share from rivals. (The U.S. is thought to be about 70-percent saturated.) The second factor is ubiquitous 3G network deployment in which smart phones and strong data offerings create a “virtuous cycle” that grow ARPU?a trend underway in the U.S. The third factor is compelling data service rollouts, arguably taking place alongside 3G network rollouts. Then and only then is there smart-phone proliferation, Clifford said.
