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    Home Latest News
    • Mobile

    Symbian Induces Smart-Phone Envy

    By
    David Coursey
    -
    July 15, 2004
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      Most people have never heard of Symbian. But if you own a high-end smart phone that doesnt have a Palm or Microsoft operating-system label, it almost surely has a Symbian OS inside. So, let me introduce you to Symbian and talk about why so little of its product is available here.

      For the introduction, let me sit you down at the big table in uberanalyst Rob Enderles den. Whenever a company comes to San Jose, Calif., as Symbian did on this occasion, Robs den is a routine stop.

      Id been wanting to visit with Symbian for a while. This week, since they were meeting with Rob and hes a friend, I got to sit in on their briefing to him. And all it cost me, besides gasoline, was lunch for Rob at a pretty good taco place down hill from his house.

      (Note to self: Become a successful analyst and buy a house like Robs).

      Rob was expecting a Symbian delegation and so was surprised when Peter Bancroft, a likable Brit who serves as the companys vice president of market communications, arrived alone. Well, almost alone, as Peter brought with him a bag of tricks that included about a dozen Symbian-based smart phones from companies like Nokia, Siemens, Sony-Ericsson, Panasonic and Fujitsu.

      At this point, I should explain that Symbian is an operating systems developer thats privately owned by a group composed of Nokia, Sony-Ericsson Mobile Communications, Panasonic, Siemens and Samsung. The company grew out of Psion, the pioneering PDA company, which recently sold its 31 percent share of Symbian to Nokia.

      Current Symbian-based phones include just about every cool phone that isnt a Treo or a Microsoft Smart Phone, and thats a whole bunch. While Americans pay attention to Microsoft and Treo, the rest of the world really doesnt. As proof, Symbians site lists more than two dozen current or forthcoming models.

      Bancroft had a half-dozen of these with him, but as far as I could tell, none of the demo units would actually work in the United States because of network compatibility issues. Many had Japanese user interfaces, and several never powered up because none of us could figure out how to turn them on.

      Bancroft said the hottest phones in the world today are found in the Japanese and other Asian markets, with Europe second and America a quite distant third. The Treo 600 thats considered todays “hot” American phone has sold fewer than a half-million units (many fewer, he says) while Microsofts global sales are about 1 million handsets.

      The run rate for Symbian-based phones is about 15 million devices a year right now, doubling annually. At that rate, Bancroft predicted that Symbian will break even in little more than a year, based on an annual budget of $185 million and royalty payments of about $6 per phone.

      Key to increasing unit volume will be making Symbian smart phones less expensive to manufacture. Todays hardware has a BOM (bill-of-materials) of about $130, which is why smart phones remain expensive.

      New technology should soon push the parts cost down to $70 to $80 a phone, necessary to hit the 30 million annual units Symbian needs its partners to sell in order for the company to be profitable selling the OS.

      Next Page: Making it big in Japan.

      Big in Japan


      Bancroft was refreshingly candid with the companys financials and projections, freely admitting that Symbian has a virtual nonpresence in the U.S. market. Thats mostly because our cellular network is at odds with world standards and is dominated by the cellular carriers.

      In other parts of the world, customers buy a handset that can be used with any of several carriers, creating greater competition and hardware innovation. In the United States, a customer buys a carrier-specific phone and while the carriers try to compete on phone features, they individually dont buy enough devices.

      The total U.S. market isnt large enough to get interesting devices built for U.S. technical standards. In fact, the only really cool devices in recent memory to ship here before going overseas have been the Treos, alas an asterisk in total global sales volume.

      So, when Enderle and I asked questions about Palm and Microsoft devices, Symbians Bancroft described us—in a nice way—as being “very West Coast.” Which I suppose is like a teenager telling mom and dad how uncool they are in a way that doesnt get the kids car keys taken away. Looking at the new phones he brought made me feel so uncool—especially when I couldnt even turn some of them on.

      One of the things we talked about is what it would take for Symbian to become well-known and a customer preference in the States. Enderle made a big deal about this, talking about corporate customers standardizing on Symbian OS devices and writing applications for them.

      While this might happen someday—though I am not holding my breath—the nature of the U.S. market works against any OS branding that isnt Palm or Microsoft, and they may not end up being all that important, either.

      Why? Both Palm and Microsoft bring customers and (supposedly) mobile developers to the table, people who might buy a device with one of those logos stenciled on it. But Symbian has no such embedded customer set, and as Bancroft will be the first to tell you, is a nonexistent brand presence here in America.

      Furthermore, in the United States, carriers do everything they can to hide the handset manufacturer names as much as they can, so getting them to make a big deal about the software on the handset seems a remote possibility. Here, people buy Verizon or Sprint PCS or whoever first and the hardware brand, if they think about it at all, is a distant second.

      /zimages/5/28571.gifNew research shows that Symbian is likely to dominate the market for high-end smart phones for the rest of the decade. Click here to read more.

      I expect U.S. corporate customers will, to the extent they build wireless mobile applications at all, develop for particular carrier networks and the feature sets they offer. Sure, these handsets may run a Symbian OS, but the API could be so carrier-specific or even device-specific that customers wont be able to mix and match hardware, at least not across carriers.

      In Europe and Asia, I get the idea that cellular devices are becoming become more PC-like generic platforms, able to run a variety of applications from third parties, without regard to which carrier provides the wireless access.

      Meanwhile, American will remain an underdeveloped wireless nation for the foreseeable future. Bandwidth that is becoming available in Asia—in the 200 to 400 Mbps range—will be slow to arrive here. As will third-party applications and truly interesting wireless devices.

      The blame for all of this goes to a long-ago decision by the FCC (Federal Communications Commission) to limit wireless competition and give preferential treatment to the old wireline carriers, the Baby Bells. That, plus a decision to use American instead of global technology, will continue to hold us back for many years to come.

      And while Symbian will be here—eventually smart phones will catch on in America as they already are elsewhere—its coolest products, at any given point in time, will always be an ocean away.

      /zimages/5/28571.gifFor more insights from David Coursey, check out his Weblog.

      /zimages/5/28571.gifCheck out eWEEK.coms Mobile & Wireless Center at http://wireless.eweek.com for the latest news, reviews and analysis.

      /zimages/5/77042.gif

      Be sure to add our eWEEK.com mobile and wireless news feed to your RSS newsreader or My Yahoo page

      Avatar
      David Coursey
      One of technology's most recognized bylines, David Coursey is Special Correspondent for eWeek.com, where he writes a daily Blog (blog.ziffdavis.com/coursey) and twice-weekly column. He is also Editor/Publisher of the Technology Insights newsletter and President of DCC, Inc., a professional services and consulting firm.Former Executive Editor of ZDNet AnchorDesk, Coursey has also been Executive Producer of a number of industry conferences, including DEMO, Showcase, and Digital Living Room. Coursey's columns have been quoted by both Bill Gates and Steve Jobs and he has appeared on ABC News Nightline, CNN, CBS News, and other broadcasts as an expert on computing and the Internet. He has also written for InfoWorld, USA Today, PC World, Computerworld, and a number of other publications. His Web site is www.coursey.com.

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