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Nokia, Intel team up in phone software race

Nokia, the world’s biggest maker of mobile handsets, said on Monday it would merge its Linux Maemo software platform, used in its flagship N900 phone, with Intel’s Moblin, which is also based on Linux open-sourced software, to create a new platform, MeeGo.

“They have understood the only way to beat Microsoft, Google and Apple is to do it through scale — get the platform to more devices,” said John Strand, owner and head of Strand Consult after the announcements at the Mobile World Congress fair.

“However, they have not realized it’s not about getting to many platforms, it’s about making something the consumer likes — the bees don’t go for the biggest garden, they go for the most beautiful flowers,” Strand said.

The cellphone industry is increasingly focusing on smartphones, devices with computer-like capabilities that have fatter margins than ordinary phones, whose sales may overtake those of other phones as early as this year.


Microsoft’s long-awaited revamp of its mobile software follows a lukewarm reception for Windows Mobile 6.5 in October, which most analysts viewed as a poor competitor in the fast-developing market.

“We hope seven’s our lucky number,” Chief Executive Steve Ballmer told a news conference.

The new Windows Phone 7 is designed to cater to all aspects of the lives of business people, including social networking, games and music, shaking off its previous strong associations with the world of business.

Handset makers such as HTC, Samsung and Motorola all make Windows phones but are increasingly turning to Android, which is not only free but attracting a fast-growing developer community.

Microsoft is also the only major phone software maker to charge a license fee to handset makers.

Microsoft Chief Executive Steve Ballmer told Reuters Television he had no plans to change the company’s charging policy.

Forrester analyst Charles Golvin said this launch was Microsoft’s last chance to get it right in mobile.


The news from Nokia was more of a surprise.

Nokia rolled out its first Maemo phone — the result of a five-year development project — only three months ago, with analysts seeing Maemo boosting the firm’s chances of succeeding in the higher end of the market.

The market for software platforms on cellphones is led by Nokia’s Symbian, but it has lost much ground lately to Apple, BlackBerry maker Research in Motion and Google.

Nokia said it was still committed to using Symbian in most of its smartphones, but would use the new MeeGo in the most advanced models.

The software deal announced on Monday is also set to boost Intel’s chances of getting its chips into the cellphones of the Finnish company, which controls around 40 percent of the global phone market.

“We believe the partnership … will result in significant sales volumes for Intel,” said CCS Insight analyst John Jackson.

Nokia’s shares closed up 0.3 percent at 9.49 euros. The DJ Stoxx European technology sector index fell 0.3 pct.


Google said it was relaxed about the development.

“Google benefits when anyone produces a great phone that enables the Web experience,” Vic Gundotra, who leads Google’s mobile engineering, told reporters. “If Intel and Nokia can deliver innovation we think that’s very exciting.”

Network operators have wanted a smaller number of operating systems, as supporting them is timely and costly, but the number has in recent years only increased.

Samsung, the world’s second-biggest handset maker, joined the party on Sunday by unveiling its first phone to use its new bada operating system.

Now the open-source computer operating system Linux is starting to win traction, with Google using Linux for its Android platform, and Nokia rolling out its top-of-the-range model N900 using Linux Maemo.

“There has been a step change for Linux in mobile,” Morgan Gillis, head of the wireless Linux system user foundation LiMo, said in an interview. “No other operating system now matches the vendor coverage of Linux.

Another area of intense competition in mobile telephony is the provision of search services. Ballmer declined to comment on a rumor that Microsoft’s Bing service was set to replace Google in providing search on the iPhone.