Linux: Challenger is open source of debate

Smartphone operating systems, Financial Times, 17/02/2004

An unexpected challenger is taking on the three companies that dominate the smartphone software market - Linux.

Microsoft, Symbian, and PalmSource currently supply most of the powerful operating systems that allow mobile phones to function as an organiser, camera and handheld computer.

Linux, the operating system developed by enthusiasts on a non-commercial "open source" basis, has made a considerable impact in the market for servers and desktop computers. Linux-based PDAs such as the Sharp Zaurus are also available.

Until last year, however, its impact on the phone industry was negligible. So when US-based Motorola announced in February 2003 that it was working on a Linux-based smartphone, the A760, industry eyebrows were raised. Could a Linux phone really make commercial sense?

Motorola clearly thinks so. "Our focus is on the Java application environment, and to the extent that it makes business sense we will place it on the Linux platform," says Mala Chandra, vice-president and director of client architecture and applications at Motorola.

However, there are no plans to discontinue Motorola's existing lines of Symbian and Microsoft phones, she says.

The Motorola A760, first released in China, uses a combined operating system (OS), based on a Linux kernel distributed by Silicon Valley-based MontaVista Software, and other software based on Sun Microsystems' Java programming language.

For future phones, Motorola is developing a full suite of smartphone software, called MotoJuix, based on Java and Linux, which will be launched in 2005.

Motorola is not alone in adopting Linux. In December 2003, NTT DoCoMo, Japan's largest mobile network, announced that it would be making around Y37bn ($351m, £187m) available over two years to Japanese phone manufacturers Fujitsu, Mitsubishi, NEC, Panasonic, Sharp as well as Motorola, to develop handsets for its 3G networks based on Symbian and Linux. Samsung, the Korean phone maker, has also developed Linux-based phones.

So what tempts these companies to use an operating system that is relatively untried for smartphones? Motorola's Ms Chandra cites the "amount of development dollars being poured into Linux," and "the number of major companies supporting Linux", which includes IBM, Oracle and Intel.

She also mentions the fact that Linux is beginning to appear in other consumer devices, including Motorola's own digital television set-top boxes.

Linux advocates point to the large population of third party developers with experience of writing software for Linux on other devices - though this is unlikely to be decisive, says Seamus McAteer, senior analyst at Zelos Group, the California-based research company. "Developers will be attracted to any operating system that offers a large customer base and a profitable business model," he says.

The technical arguments for and against are complex. In general, however, most sides agree that Linux-based systems offer more flexibility, and can be squeezed into a smaller chunk of memory.

However, Linux was originally built to run systems with mains power, and as Motorola concedes, it does not yet manage battery power as effectively as its rivals.

A key argument revolves around cost. Companies don't pay a per-unit royalty fee to use the Linux kernel, unlike its rivals. For this reason, it is often described as being "free".

However, the kernel represents only around 15 per cent of the code needed to run a functioning handset. The rest has to be developed by the manufacturer, or licensed from a third party, such as Norway's Trolltech, China MobileSoft, or South Korea's Mizi, which partners with Samsung.

Richard Windsor, analyst at Nomura, estimates that Motorola has in fact spent close to $200m on developing its Linux-based smartphone software, while NTT DoCoMo has spent $150m without even bringing a product to market yet.

Far from being free, the up-front costs of developing a new Linux-based solution are much higher than the cost of simply licencing a ready made Symbian OS.

The savings from not having to pay a per-unit licence fee cancel out these upfront development costs only if they can be spread across many millions of phones - and few companies could sell enough units to do this.

"For this reason I don't think that Linux smartphones will make commercial sense for anyone, except NTT DoCoMo," says Mr Windsor.

The third-party Linux developers such as Mizi or China MobileSoft don't have the development resources to compete with the functionality of Microsoft or Symbian. Instead, they may find their sweet spot at the lower end of the market, Mr Windsor argues, selling software for cheaper, less powerful "feature phones" that run simple games and applications, rather than multiple processing tasks.

For many manufacturers, it may be a strategic choice, rather than simply a bid to find the cheapest operating system. Controlling their own Linux-based platform gives greater freedom to manoeuvre than an OS controlled by Microsoft or Symbian.

All the major manufacturers are evaluating Linux, including Nokia, though it "remains committed to Symbian", says Timo Poikolainen, vice-president of marketing at the Finnish company.

Nokia's recent decision to bid for a majority stake in Symbian by buying Psion's stake may push other licencees to take an even closer look at Linux, if Symbian seems too close to Nokia to be truly independent.

"The closer Symbian gets to Nokia, the more distance the other manufacturers will want to put between themselves and Nokia," says Alex Slawsby, analyst at IDC, the US-based market research company.

Asia will be the most fertile ground. "Linux is the politically correct choice in China, where the government has indicated their support for it," says Ben Wood, principal analyst at research group Gartner.

Currently, IDC estimates that Linux is likely to take 3 per cent of the smartphone market by the end of 2004, far behind Symbian and Microsoft.

But that could be about to change. "IDC is considering revising its forecasts to reflect increased manufacturer interest in the Linux platform," says Mr Slawsby at IDC.

Linux has taken many other parts of the technology industry by surprise. Could smartphones be next?