"If they don't make the move, Nokia risks being pushed out of the huge smartphone market in the U.S." says ABI Research research director Stuart Carlaw, commenting on Nokia's steadfast commitment to its Symbian OS in the face of growing global support for the Linux mobile platform and Google's operating system Android. "Nokia will have to reexamine its entire product portfolio. I would be surprised if they don't have a handset based on the Linux OS in the next three to four years if not well before then".
By 2013 Linux will take 23% of the smartphone market and will be the second most prevalent solution behind Symbian, according to ABI Research.
Nokia seems to preparing for the inevitable. Speaking at the Handsets World conference in Berlin, Nokia's software chief Dr Ari Jaaksi said the open-source community needed to be 'educated' in the way the mobile industry currently works, because the industry has not yet moved beyond old business models. Open-source developers targeting the mobile space need to learn business rules including digital rights management, he said. "There are certain business rules [developers] need to obey, such as DRM, IPR [intellectual property rights], SIM locks and subsidised business models."
Nokia's primary play in the open-source sphere thus far has been Maemo, the Linux-based operating system that runs on its N800-series tablet devices. These devices are popular among developers in the Maemo developer community but, being something of a testbed, have not yet seen much traction in the mass market.
Nokia faces an uphill battle to capture smartphone market share - particularly in the U.S. - thanks largely to the progress of the LiMo (Linux Mobile) Foundation and the Google-led Open Handset Alliance (OHA). Carlaw says "The real surprise is that the market is consolidating as quickly as it is. There are a number of different standards around that are going to be available - Open MoCa, probably there for a niche, gadget guys, MIMO and anything QT developed through Nokia - but we really think as far as commercial availability goes, it is going to come down to those two, the Open Handset Alliance, Android, and the LiMo foundation products".
The two organizations operate as separate entities with similar goals, with no plans of merging as some operators have hoped. This might not be a negative thing, however, as the two fill different niches in the market, Carlaw says. The LiMo foundation will be very useful in penetrating the low-end, mid-tier market and branded products, while Android-based products are aimed at more high-end users.
"The OHA is very Google-dominated", Carlaw says. "The LiMo foundation is broader in its membership and is more carrier driven with some significant OEM support. There are very different agendas from both parties there. There is room in the market for multiple solutions anyway. It would be almost counterproductive for the two to merge".
The LiMo foundation recently got Verizon on board, while Android has been busy signing up numerous global application developers to code apps for the platform. At Mobile World Congress this year, the LiMo Foundation announced 15 Linux-powered devices from Motorola, NEC, Panasonic and Samsung set to begin shipping commercially by the end of the year.
If Nokia fails to make the move, it could also lose its leadership position in the European markets as well, the ABI report concludes. There it is also challenged by a combination of resurgent Windows and emerging Linux platforms.
"Two years ago, it was such a fragmented market that it could have gone any way. Now, the jury is most definitely in and the day is going to be here, and it is going to be in general based on those two standards with other players in part of it, but not as wide and dominant as they are", Carlaw says, adding that there will be opportunities for solutions such as Maemo, facilitated by the burgeoning Mobile Internet Device market.
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