Study: Symbian Far Ahead in Smart-Phone Market

ABI Research finds that powerful backing and fear of Microsoft domination will keep the operating system ahead of competitors for years to come.

The Symbian Ltd. operating system, controlled by a group of cell-phone handset makers, is likely to dominate the market for high-end "smart phones" for the rest of the decade, according to new research.

Symbian has climbed to the top of the quickly growing smart-phone industry because of a combination of powerful backing and the fear of Microsoft domination, according to a study published Monday by ABI Research.

While the systems lead is unlikely to be immediately threatened by competition such as Windows CE, the Palm OS or Linux, ABI said Nokias tightening grip on Symbian could lead other handset makers to shun the software.

Mobile phones have traditionally used proprietary software developed by the phone maker and closely tied to the phones hardware, but that situation is being changed by the advent of smart phones, which generally use a standardized OS provided by a third party.

A related factor is the growing success of "middleware"—low-level software that allows programs to be run on a variety of devices—such as Java on mobile-phone handsets.

Phones using standardized software will amount to only 2 percent of the worldwide market this year, but that still added up to about 10 million handsets in 2003, a figure that ABI said will quadruple this year and continue growing steadily through 2008.

Together, smart phones and PDAs with wireless connections will amount to nearly a quarter of all handsets by 2009. The figures are contained in the report, "Wireless Handset OS and Middleware Platforms: The Evolution of OS and Middleware Solutions and Their Impact on Next-Generation Wireless Devices."

Cell-phone makers have backed Symbian so far in part to avoid leading their industry down the path of the PC business, where hardware is commoditized and software runs the show—the model proposed by Microsoft with Windows Mobile.

Most major phone manufacturers own a stake in London-based Symbian, including Nokia Corp., Ericsson AB, Samsung Electronics Co., Matsushita Electric Corp. of America (Panasonic), Siemens Enterprise Networks LLC and Sony Ericsson Mobile Communications AB.

But Nokias move to take control of Symbian by acquiring a 63 percent stake in the company could remove one of the pillars of Symbians success, ABI said. Manufacturers choices between different operating systems could "prove to be just a case of choosing which devil to dance with," the company said.

Network operators may wish to exert more control over handset and OS design, but their efforts will not pay off soon, ABI said. "The problem with both carrier-optimized operating systems and proprietary operating systems is less functionality," the report said.

Next Page: Industry observers have predicted a backlash against the power of software and hardware makers.