Sunday, November 12, 2006

Sony Ericsson buys UIQ

Sony Ericsson (SE) announced that it is buying UIQ.For those of you who are not aware of UIQ its subsidiary of Symbian providing UI layer on top of symbian OS.UIQ is the UI layer that runs in SonyEricsson popular P900 series smartphone.offcourse no financial details were disclosed about the transaction by both parties .I will try to put my thoughts why did SE buy UIQ and what is the future looks like

To answer the question why did they buy lets try to discuss about symbian ecosystem.Symbian is the dominant Smartphone OS with more than 70% market share.Symbian similar to Linux world doesn’t provide its own UI layer but there are many options available for mobile manufactures like S60 Nokia’s own layer on top of symbian, UIQ from UIQ technology which is subsidiary of Symbian ltd and MOAP which is UI layer by NTTDocomo.But if you look closely which of these UI layer ,its Nokia S60 devices that accounts nearly 60% of generic Smartphone market share and close to 80% of symbian devices market share .Rest 20% of symbian devices are dominated by MOAP in Japanese mkt and also UIQ devices whose biggest customer is SE.Now Symbian itself is privately owned company with Nokia being the biggest owner with 47.9% followed by Ericson and SE combined together hold 28% and rest is owned by Panasonic(10%) ,Siemens (9%) and Samsung(4.5%).As you can see Nokia is not only the biggest share holder but also the biggest customer of symbian .It also as S60 layer on top of symbian which it licenses to other symbian phone manufacturers like Samsung,LG etc and UIQ is direct competitor to it .UIQ as mentioned earlier is a subsidiary of Symbian and had SE has its major customer .In this environment it is oblivious that Symbian shareholders would not be interested in pouring symbian money into UIQ development in long run so my guess is that since SE was dependent on UIQ was forced to buy UIQ and continues it development same way as Nokia does S60 and in process making symbian as pure OS vendor .

Now lets try to predict the future of this acquisition.SE for now as said that it would like to keep UIQ has separate company and not only develop it further but try to license it to other symbian phone manufactures meaning that they would like to place it as alternative to S60.Ok that’s what SE aims to do but would it be able to do lets put this way that I am little bit pessimistic. Reasons are straight fwd

  • Today’s symbian volumes are coming from Nokia and its S60 devices they are not going to license UIQ
  • To develop and maintain SW platforms is very expensive with low volumes it becomes much more difficult .so with SE present volumes it may become difficult to develop and sustain UIQ.
  • UIQ will try to get other license but most other major symbian license like Samsung are already S60 licensee

So in short my thinking is that in market for symbian phones there is space for only on UI platform and that at this moment seems to be clearly S60 so future of UIQ looks bleak but again who knows SE may become biggest Smartphone vendor which gives the volumes to sustain platform development cost .:)

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