Weak economy, phone portfolio sap Symbian growth

British mobile software company Symbian reported a sharp slowdown in second-quarter growth on Tuesday, as the global economic slowdown hit multimedia phone demand and just a few new models reached the market.
Symbian is 48-percent owned by the world's top cellphone maker Nokia Oyj, which offered in June 264 million euros ($387 million) to buy out other shareholders.
Symbian's shipments rose just 5 percent to 19.6 million units in April-June, compared with a 17 percent growth rate in the previous quarter and more than 50 percent annual growth numbers in late 2007, the firm said on Tuesday.
"What our licencees have said is that they are seeing competitive pressures and economic pressures on the marketplace," Symbian Chief Executive Nigel Clifford said.
Last week research firm Gartner said it expects the weakening global economy to sap market growth this year, and said sales in Western Europe, a key region for Symbian, fell 16 percent year-on-year in the first quarter and 8 percent in the second quarter. Symbian said turnover fell 14 percent to 37.8 million pounds ($68.26 million) in the three months compared with last year as average royalties per unit fell to $3.40 from $4.30.
Nokia aims to boost Symbian's growth rate by making its software royalty-free to all phone makers, a response to the new rivalry of Google's royalty-free Android platform.
Symbian products are used in around 7 percent of mobile phones worldwide, but it is the dominant software among multimedia phones.
Symbian software is used in 60 percent of smartphones — mobile handsets with computer-like capabilities — but Apple Inc's iPhone or phones using Google's software could challenge that dominance.
While Apple has two iPhones on the market, and the first phone using Google software is expected by the end of this year, Symbian started to ship 14 phones in the second quarter and its licencees were working on 92 new models.
"We need to get those new models out to the marketplace," Clifford said, adding he expect to see many of the models being developed in stores for the Christmas sales season.
Symbian was formed in June 1998 in London by a consortium of top mobile handset makers looking for a standardized way of building software to run new phones. It was the descendant of software used to run Psion electronic organizers popular with business professionals in the 1990s.
Symbian's closest rival is Microsoft's Windows Mobile operating system, which has around 10 percent of the market despite the U.S. software maker's drive to gain share.
With Symbian dropping royalties, Microsoft's position will become increasingly difficult, as it tries to charge $8 to $15 per phone for its software, according to Strategy Analytics.
After the Symbian deal closes, expected by the end of 2008, Nokia will contribute Symbian's assets to a not-for-profit organisation in which it would unite with leading handset makers, network operators and communications chipmakers to create an open-source platform with wide industry appeal.
The buy-out will save money for Nokia as its big market share means it has been a net payer of royalties to Symbian.