Cell-phone makers pick an OS; Microsoft spurned

Summary:LONDON -- In a deal that could match Microsoft Corp.'s appointment as IBM's PC operating system supplier in 1981, the leading digital handset manufacturers Wednesday pledged their support for Psion's EPOC as a single common operating system for smart phones and digital communicators.

LONDON -- In a deal that could match Microsoft Corp.'s appointment as IBM's PC operating system supplier in 1981, the leading digital handset manufacturers Wednesday pledged their support for Psion's EPOC as a single common operating system for smart phones and digital communicators.

Nokia, Ericsson and Motorola agreed to share their development resources with Psion in a new company, Symbian.

... Proprietary operating systems alarmed the telecom industry, and they did not want a single vendor in control of the operating system.

Under the deal, Psion relinquishes control of the EPOC application programming interface (API) to Symbian, taking a 40 per cent stake in the new venture, with Psion's engineers forming the bulk of Symbian's first 143 employees. That employee total is expected to rise to more than 400 in the next three years.

The new venture will welcome new members from other handset manufacturers and industry leading lights, with dilutions of Psion, Nokia (NYSE:NOK.A) and Ericsson (Nasdaq:ERICY) shares maintaining a 4:3:3 ratio. The first of these will be Motorola. (NYSE:MOT)

No proprietary OS
"EPOC has three key ingredients, but most importantly it's an uncompromised platform," said Pekka Ala Pietilä, president of Nokia Mobile Phones. An Ericsson official agreed that proprietary operating systems alarmed the telecom industry, and they did not want a single vendor in control of the operating system.

The OS is already used in Psion Computer's Series 5 PDA, the GeoFox PDA, and Philips' Synergy smart phone. Pricing for the OS will be $5 for smart phones, and $10 for the more sophisticated "communicator" class devices. The first fruit of today's announcement is expected to appear in 1999.

The deal comes as a bitter blow to Microsoft (Nasdaq:MSFT), which has been offering its CE operating system to handset manufacturers for several months without success.

"EPOC has been refined for 10 years to fit small devices and offers us very good performance," said Anders Waesterlid, director of software development and strategies at Ericsson. "To adopt CE means several technical compromises in these areas."

Microsoft recently announced that a revised version of the CE operating system with a rewritten real-time kernel would be available next year.

Psion: No regrets
Colly Myers, CEO of the new company, said Psion had no regrets over handing control of the EPOC API to a new body.

"The cost is losing exclusive control of the API, sure, but what price is success?" Myers said. He stressed that Symbian welcomed input from industry and business to shape future enhancements to EPOC.

Part of the group's enthusiasm for the software was fueled by its natural fit with the ARM processor, according to sources. The operating system was developed on the ARM reference platform using the GNU tools. ARM is a processor that's designed to run in small devices with low-power requirements.

"It's a reasonable assumption that this will help ARM, but there's nothing public yet," said Gordon Stubberfield, marketing manager for ARM.

Booming market
International Data Corp. estimates that the handset market, currently at around 200 million units, will grow to 600 million units in 2002, with wireless data devices making up 10-15 percent of this market.

Psion plc's shares raced up 50 percent to 423p on the news, up from Tuesday's close of 281.5p.

Topics: ARM, Microsoft, Mobile OS, Nokia, Operating Systems, Smartphones, Software, United Kingdom

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