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To: Snowshoe who wrote (6900)	11/29/1999 4:30:00 PM
From: Caxton Rhodes	Respond to of 10309

THE SHOSTECK EMAIL BRIEFING Issue #25 November, 1999 Herschel Shosteck Associates, Ltd. shosteck.com To get this Briefing free each month, click here ------------------------------------------------------------------------- THE SYMBIAN STRATEGY BEGINS TO ERODE In late 1998, we released our first study of the effect of the Internet on the wireless industry. At that time, Symbian was a new strategy by the three major wireless phone manufacturers (Motorola, Nokia, and Ericsson) to leverage the EPOC operating system for use in future smart phones. This was popularly regarded an "anti-Microsoft" strategy, since it was widely reported that Microsoft had been courting the manufacturers to use Windows CE. Reasons given for the move included the fact that EPOC was technologically superior to Windows CE, consuming less memory and having better real-time determinism. We suspected the reasons were more philosophical -- conceding the operating system to Microsoft so early could have led to the hardware manufacturers losing control of the "smart phone" market. In our study we noted that, posturing aside, the "big three" would not hesitate to adopt Windows CE or other operating systems if the market demanded it. Indeed, the declining market share of devices based on the EPOC operating system (sold by Psion, a co-owner of Symbian) indicated that EPOC-based devices were already losing favor. Moreover, Nokia admitted in early 1998 (prior to the formation of Symbian) that it had agreements with Microsoft for future use of Windows CE. At the very least, the phone manufacturers would be forced to adopt differing user interfaces to meet market demand. This has now begun, with the first announcement by Nokia that it would license the Palm operating system for some of its future devices. The other Symbian allies (Ericsson, Motorola, Matsushita, and Philips) were rumored to be "hopping mad." Counter-announcements quickly followed which indicated that in fact, Symbian and Palm would work together. This brought up numerous questions. For example, why would two operating systems be required in a single device? Symbian executives we interviewed indicated that the choice was simply a matter of putting a popular user interface atop the Symbian platform. This seems curious. The Qualcomm pdQ, which also uses the PalmOS, doesn't use the Symbian platform. On the other hand, the Qualcomm pdQ can't run EPOC applications. But is the ability to run EPOC applications really important to the marketplace, or is this make-work for EPOC? Palm executives noted that the Symbian contribution will be relatively small. Only the microkernel of EPOC wil be used -- the operating system and user interface will be entirely PalmOS. Another question was how Palm and Symbian would be able to work with each other. After all, at their core, both are operating systems companies -- direct competitors for the attention of wireless phone manufacturers. Lest we forget that, Mark Bercow, vice president of strategic alliances and platform development for Palm Computing was quick to set the record straight in an interview with Wired. He commented, "We have been actually somewhat fazed at how effective Symbian has been at getting their nose in the middle of our announcement with Nokia, and we sort of wonder why that is happening, but this agreement is between us and Nokia." The Palm-Nokia agreement, and the earlier licensing of PalmOS by Qualcomm, makes one question the value of EPOC for the Symbian partners. EPOC is the crown jewel of the Symbian platform, and the only major element which is entirely under Symbian's control. Other elements -- for example, Java and Bluetooth -- have been developed by other companies or consortiums. If EPOC loses value, the Symbian strategy is diminished. However, this is not to say that Symbian will fail entirely. Symbian will remain, regardless, as a sort of central R&D facility for its partners. It can retain some value, at least for the short term, as an integrator of technology. And, even diminished, the continued existence of Symbian serves as a warning from the phone manufacturers to Microsoft: we won't be won easily. Index of other Email Briefings