Nokia's shrewd manoeuvre

Nokia has taken a swat at Microsoft and Google with its purchase of Symbian. The Finnish mobile giant will buy the 52 per cent it doesn't own of the biggest maker of smart phone software for €264 million. Nokia, along with four other big handset makers, will then set up Symbian as a non-profit foundation. It will offer its platform for free on an open source basis. This could make it harder for rival software groups to carve out a profitable niche in mobile.

The cost is minimal to Nokia. It already pays out more than €150 million a year in royalties to Symbian. Eliminating these is a minor benefit. The real advantage for Nokia, and the other handset makers, is a better chance of seeing off interlopers such as Microsoft and Google. Their ambitions threaten to turn handsets into a commodity, much as PCs have become.

Microsoft's position looks particularly weak. Its ambitions in the mobile business haven't panned out. Only about 20 million phones used its software in the past year, because many manufactures don't see the appeal. Microsoft will have even a tougher time selling its software once Symbian's becomes free.

As for Google, its open source software platform called Android is still in the planning stage. The company claims it is still on track for a launch by the end of the year – despite reports the program is delayed. In any case, 200 million phones use Symbian's software. If both platforms are free, developers may prefer to work with Symbian because it already has so many users.

Of course, there are risks. Symbian will be controlled by a board of ten members appointed by ten different companies. This may be a recipe for paralysis. Open source systems have a well-deserved reputation of being very good at ironing out bugs in existing programs, but rather poor at delivering new ideas. After all, Apple is arguably the most innovative handset company, and it is run by a design tyrant. In any case, the mass of users behind Symbian gives it a good shot at buttressing its dominance of the mobile market.

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