Nokia mum on reports of buying Psion for Symbian stake

Psion buyout would give Nokia a competitive edge

Nokia Corp. representatives declined to comment on reports Monday that the company is looking to up its stake in mobile phone software developer Symbian Ltd. by acquiring Psion PLC.

However, at least one industry analyst said that he wouldn't be surprised if the Finnish handheld giant snapped up Psion in coming weeks in an effort to wield greater control over the future of Symbian.

"(The Psion buyout) would not be surprising," said Paolo Pescatore, senior analyst for IDC in the U.K. "It would give Nokia more weight on decision-making and forward-looking strategy for Symbian."

Nokia currently has a 32.2 percent stake in the Symbian mobile phone software consortium, while Psion holds 31.1 percent. The rest is divided between Telefonaktiebolaget LM Ericsson with 17.5 percent, Matsushita Electric Industrial Co. Ltd.'s Panasonic brand with 7.9 percent, Siemens AG with 4.8 percent, Samsung Electronics Co. Ltd. with 5 percent and Sony Ericsson Mobile Communications AB with 1.5 percent, according to Symbian's Web site.

Until recently, Motorola Inc. had a 19 percent stake in Symbian. It negotiated the sale of its share to Nokia and Psion, however, and has since been dabbling in phones featuring Linux and Microsoft Corp. Smartphone software. 

Press reports out Monday speculated that Nokia would try to takeover Psion for its share of Symbian.

However, a representative for Nokia in Finland said Monday that the company "would not comment on market rumors." Psion representatives also declined to comment on the reports.

Still, according to Pescatore, the move should not be ruled out.

A Psion buyout would ensure Nokia greater control over the design and function of the Symbian operating system and give the company an edge when competing with Asian handset providers and Microsoft, Pescatore said.

Although Symbian is the leading mobile phone OS at the moment, Pescatore said "there is a war going on out there" and Microsoft's strength "can not be underestimated."

Mobile phone consumers are looking for familiarity with the user interface, and the similar look and feel between Microsoft's mobile phone and desktop software could give it an edge in the next few years, he added.

Pescatore warned, however, that Nokia would have to look very closely at acquiring Symbian in its entirety since the software developer was created by a number of handset manufacturers to be used in a variety of mobile devices. Fear of total Nokia control could have been the reason why Motorola sold off its share, he speculated.

Copyright © 2003 IDG Communications, Inc.