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Farewell then, Symbian

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Analysis Ten years ago to the day, I attended the surprise foundation of Symbian. I was in Norway and sorry to miss the event today that closed the chapter - and probably the book - on the great adventure.

I find it exquisitely ironic that the philosophy behind the decision to end Symbian's independent existence as a joint-ownership, for-profit consortium has its roots in the Microsoft antitrust trial. Symbian was created because the leading phone manufacturers desperately wanted to avoid Microsoft's desktop monopoly being extended to mobile devices. They didn't want a dependency on high license fees, rigid requirements and poor code.

Well. Philosophy might be a grand way of putting it - it's more of a fashionable buzzword. This is the idea of "multi-sided markets", which when you get down to it, is really just a fancy way of describing cross subsidization. The case for a "multi-sided business model" was made in an economic defence of Microsoft's strategy of bundling Windows Media Player with Windows in the EU antitrust case. So take a bow, economist Richard Schmalensee, Microsoft's favourite economist. It was Schmalensee who in the US antitrust trial argued that the true price for Microsoft Windows should be around $2,000 per license. The idea that emerged from the EU trials was that WMP created a "platform", and therefore consumer benefits. The idea here is that Nokia, which now entirely owns Symbian, will cross-subsidize the market by giving away the Symbian OS, er ... platform, royalty free. So it's a triumph for the new science of "Freetardonomics".

If the ploy is successful, Symbian becomes the go-to OS if you want to make a phone. You just pick up the software stack for free. Nokia benefits from the halo effect. But it's also fraught with problems, the first of which was apparent by lunchtime today.

The most damaging problem is that Symbian's licensees may have no desire to make Nokia stronger now that it owns the operation 100 per cent. Because it dominates the "platform" already by market share, the playing field tips steeply towards Finland. Why bother joining - to make the market leaders even stronger?

This seems to be the logic behind UIQ's decision to clamber out of the "eco-system", even before the formal press conference announcing its commitment to the happy-clappy "Foundation" had started.

UIQ is today dismissing over half of its staff: more redundancies will follow, we understand, once negotiations have taken place.

The "Foundation" may also prove to be an expensive liability for Nokia. The whole idea of "multi sided markets" is susceptible to a change in the regulatory fashion. Should Nokia be regarded not as a benevolent platform provider but as a dominant player - not difficult given that rivals such as Ericsson, Siemens and Motorola have a habit of spontaneously self-destructing - then life could get very difficult indeed. A change in the regulatory weather could see the venture catch a chill.

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