Nokia-Psion rumour raises more Symbian doubts

The future of Symbian as a mobile operating system provider backed widely across the industry has once again been questioned following a weekend report that Nokia is considering acquiring fellow stakeholder Psion.

Last month there were claims from the man at the helm of developing rival Palm OS that Nokia is getting too powerful within Symbian, while others have been equally unkind about Motorola's divestment from the venture. Its stake was subsequently bought by Nokia and Psion.

Now, however, the UK's Business paper from the past weekend has cited "an industry source with knowledge of Nokia's plans". The assumption is that a bid will value Psion, which is now more of a provider of messaging software and industrial devices, at over £400m.

Shares in Psion are up almost 10 per cent by lunchtime today at £82.65, close to a new 52-week high.

Some critics and rivals have long contended that Nokia already has too much influence within Symbian, something that Symbian itself and other stakeholders such as Sony Ericsson deny.

However, Nokia's fiercest competitor in the smart phone market over the long term is likely to be Microsoft and there are those who believe the Finnish giant must control the mobile OS to remain strong.

According to analyst house IDC, in 2003 about 1.8 million phones that use Microsoft's operating system are expected to have shipped compared with 8.3 million Symbian units. By 2007, about 16.5 million units with Microsoft's software are projected to ship worldwide compared with 49.2 million based on Symbian.

While there is speculation that Symbian could follow Google as one of the hot flotations of 2004 others see a trade sale as likely. One venture capitalist recently told silicon.com: "My prediction is that Nokia buys them in the next 18 months."

The Symbian OS is based on the EPOC OS developed by Psion through the 1990s and the basis for some its once popular handheld computers. Psion initially formed Symbian with founder members Ericsson, Motorola and Nokia. Eventually others joined such as Matsushita, Samsung and Siemens, leading Microsoft chairman Bill Gates to at one stage call the venture the software behemoth's biggest threat.

Nokia and Psion declined to comment on the rumour. Symbian couldn't be contacted at the time of writing.

In related news, Juha Christensen, an executive in Microsoft's mobile device software group and one-time higher-up at Symbian, announced plans to leave the company later this year.