Ericsson to block Nokia bid to dominate Symbian
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The power struggle at Symbian has taken a fresh twist as Ericsson says it plans to raise its share to block Nokias bid to dominate the venture.
22 March 2004 The power struggle at Symbian took a fresh twist today as one of its founders, Ericsson, confirmed plans to raise its share in the smartphone operating system company in order to block rival Nokia's bid to dominate the venture.
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The Swedish telecoms equipment giant, which is Symbian's second biggest shareholder, will exercise its rights to buy a proportion of shares owned by Psion, another of the venture's founders.
Psion had originally agreed to sell its entire 31% holding to Nokia. But under Symbian rules, it must first offer its shares on a pro rata basis to the venture's other shareholders.
Ericsson said that another shareholder, Sony Ericsson, its mobile phone joint venture with Japan's Sony, will also exercise its pre-emption rights. The result will be an Ericsson-based counterbalance to Nokia.
Carl-Henric Svanberg, Ericsson's chief executive, told the Financial Times newspaper that Nokia's share in Symbian should be kept below 50%, "otherwise it becomes a Nokia platform." He added: "If that happens, there will be a gradual deterioration in the view of Symbian and other platforms could start to materialise."
It is not clear whether the other shareholders in Symbian, including Matsushita (Panasonic), Siemens and Samsung, will also exercise their pre-emption rights to Psion's shares. If they did so, Nokia's stake would increase only to 46.7%.
As the mobile data market continues to expand, and greater numbers of corporate users roll out wireless applications, Symbian is facing growing pressure from Microsoft and, to an extent, Palm, as the operating system of choice for mobile data users.
Analysts say that this is a bad time for the Symbian shareholders to be engaged in a boardroom fight. All the same, Nokia appears to believe that the fragmented nature of the venture is harming its chances and its ownership ought to be consolidated.
In a move that caused alarm among some of its shareholders at the time, Psion said in February 2004 that it had agreed to sell its entire 31% share to Nokia for around £136 million, a move that would have raised the Finnish company's share to a potentially decisive 63%.
However, Nokia has repeatedly played down suggestions that it wanted outright control of Symbian, citing the venture's complex governance rules that are designed to prevent one shareholder from wielding too much power. It is understood that a single shareholder would need to own as much as 70% of Symbian's shares in order to control the company outright.
