Nokia admits defeat

It’s official. Nokia has retreated from the smartphone OS battlefield, dominated by Apple and Android, and announced phasing out of the Symbian OS. But the company is not giving up just yet as it will be joining forces with Microsoft and switching to Windows Mobile OS.

Nokia was once a dominant player in the industry but has failed to innovate and dropped its market share to only 27.1% , according to Gartner. Symbian, an open source operating system and software platform designed for smartphones and maintained by Nokia, is a casualty. The scale is tipping now in favor of operating system providers and away from hardware vendors and the market will now be shared between three giants – Google, Apple and Microsoft.

This new development resembles very much what happened in personal computers market a few decades ago. In 2009 I have written a post discussing the scenario of market power shift to operating systems providers. Android barely registered then in statistics so it looked like Symbian was to become the open source equivalent to Linux. Now it seems rather unlikely and this title will most likely go to Android OS. The only difference between PC and mobile market scenarios is a large dominance of open source operating system but the rest plays out almost exactly like a few decades ago (ie. Apple vs Microsoft vs open source community)! This is one more proof that history tends to repeat itself and therefore we should expect many more similarities to PC market: Dell-like handset customisation, liberation of content and apps on mobile devices as with the advent of the Internet, emergence of new service providers that will eventually muscle out the power from operating system providers, etc. etc…

Update

More details emerged on the Nokia Microsoft deal. It looks like Microsoft it taking a gamble for long term gains, paying Nokia $1B up front to switch to Windows OS…