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Tradeoffs of Open Innovation Platform Leadership:The Rise and Fall of Symbian Ltd.

Joel West*College of Business, San José State University

[email protected]

David WoodAccenture

[email protected]

To be presented at the Stanford Social Science and Technology Seminar 30 March 2011

Abstract

Two predictors of platform success have been held to be an appropriate technical

architecture and strong relationships with a network of complementors. Many of the mostsuccessful platforms have come from vertically integrated IT companies, with rareexamples of externally sourced platforms that are consonant with the “open innovation” paradigm of Chesbrough (2003).

Here we examine Symbian Ltd., a startup firm that developed a strong technicalarchitecture and broad range of third-party complements with its Symbian OS. Symbianwas shipped in 450 million smartphones from 2002-2010, making it the most popular smartphone platform during that period. However, from 2007 onward it lost market share

and developer loyalty with the introduction of the iPhone and Android platforms, leadingto the extinction of the company and the 2011 announcement that it was being abandoned by Nokia, its primary customer (and then sole owner).

We discuss the implications of the rise and fall of Symbian on the tension between



We discuss the implications of the rise and fall of Symbian on the tension between

Tradeoffs of Open Innovation Platform Leadership:The Rise and Fall of Symbian Ltd.

1. INTRODUCTION

1.1 Dynamics of Platform Competition

For nearly 30 years, researchers have been interested in the sort of de facto standards battles

that are common in consumer electronics, computing and communications. The early research by

Katz and Shapiro (1985), Farrell and Saloner (1986) and Teece (1986) established a positive-

feedback network effects model mediated by the supply of specialized complementary assets (see

Gallagher & West, 2009 for a recent summary). Meanwhile, investments in such assets created

switching costs that together with network effects that often made insurmountable an early lead

gained in a standards contest (Greenstein, 1993; Arthur, 1996; Farrell and Klemperer, 2007).

From this, researchers have identified the dynamics of complex architectures of standardized

components referred to as platforms (Morris & Ferguson, 1993; Bresnahan & Greenstein, 1999;

Gawer and Cusumano, 2005; Eisenman, 2007).1 One key to platform success is a technical

architecture of standards that both facilitates complementary assets and allows re-use between



base would automatically attract such a supply of complements (e.g. Farrell and Saloner, 1986),

moderators of the positive-feedback process mean that standards sponsors make technical,

product and economic choices that make a standard more or less attractive to complementors

(Gallagher & West, 2009). The platform sponsor must share returns of platform success with

complementors to assure an ongoing supply of complements (Gawer and Cusumano, 2005). The

interdependence of the sponsor with its complementors creates an ecosystem; excessive value

capture by the sponsor threatens not only the survival of the complementors but also the entire

ecosystem (Brandenburger and Nalebuff, 1996; Iansiti & Levien, 2004; Simcoe, 2006).

1.2 Open Innovation Platforms

When considering both architectural control and attracting third-party complements, a key

decision made by platform sponsors is the degree of vertical integration. One option is for the

sponsor to integrate to produce the entire platform, while relying on third parties primarily for

complements. This allows a single firm to internalize technical design decisions and create a

successful technical architecture, as IBM did with the System/360 (Baldwin and Clark, 2000).

Another approach would be for a firm to concentrate on one core layer of the platform



record between the vertically integrated and open innovation platform approaches. Successful

platforms of the 1960s-70s were vertically integrated, whether IBM mainframes, DEC

minicomputers or Apple personal computers (Bresnahan and Greenstein, 1999). Examples of

successful shared platform control — consonant with the open innovation model — are scarce.2

The first successful attempt to establish a shared platform that externally sourced key

standards came with the “open systems” movement, organised around variants of the Unix

operating system (Gabel, 1987). Computer makers leveraged the same operating system source

code from AT&T and UC Berkeley, but pursued competing efforts to integrate proprietary

hardware with non-standard modifications to the software — resulting in the “Unix wars” that

were not resolved until the category had long since been eclipsed by the personal computer

(West, 2003; Isaak, 2006). Not until Linux did Unix achieve a successful open innovation

strategy — with a shared code base that provided pooled R&D (West & Gallagher, 2006).

The other prominent example of a non-vertically integrated IT platform of the 20th century

was the so-called “Wintel” platform, melding Microsoft Windows and Intel’s x86 processor

(Moschella, 1997). This open innovation strategy enabled entry by hundreds of new companies,



enjoyed rapid success as it sponsored the most popular smartphone platform from 2002-2010

accounting for nearly 450 million smartphones sold worldwide during that period. Unlike the

vertically-integrated strategies used for earlier mobile phone production, Symbian’s business

model of selling its software to a wide range of manufacturers anchored it explicitly within the

open innovation paradigm.

Symbian’s initial strategy followed many of the key principles of platform leadership defined

by Gawer (2010): technology design, strong relations with complementors, internal organisation.,

firm scope. In particular, Symbian built a technical architecture that was the first one optimized

for smartphones, i.e. cellular phones that were also programmable mobile computing devices.

Symbian also built a successful ecosystem: like Wintel, it enabled a wide range of devices from

multiple manufacturers, and had the largest supply of third-party application software.

Meanwhile, the internal organisation of Symbian was focused on developing and distributing

an advanced smartphone operating system. Finally, consonant with the (subsequent) principles of

open innovation, Symbian worked with its shareholder-customers — the world’s five largest

handset makers — to provide a scope that included firms representing 80% of the industry.



Finally, the sole remaining customer (Nokia) orphaned Symbian in favour of a smartphone

derivative of the same Microsoft Windows quasi-monopoly it had long sought to avoid.

While the story of the iPhone and Android success may be familiar to contemporary readers,

less well known is that the Symbian platform had developed elements of the dominant design

years before the iPhone or Android. The first Symbian smartphone from Ericsson in 1999 had a

point-and-click interface with a (for its day) spacious LCD screen, while starting in 2006, Nokia

phones on the Symbian platform used the same WebKit desktop browser technology as later

shipped with the iPhone and Android. Even less well known is that Symbian had discussed

creating its own application store in 2005 – three years before the iPhone App Store — but

abandoned the project due (in part) to a lack of resources.

Here we use a combination of primary and secondary data, internal and public sources to

chronicle the rise and fall of Symbian Ltd. and its Symbian OS platform. We argue that many of

Symbian’s difficulties reflect an inherent difficulty of an open innovation approach to platform

leadership, particularly for startup companies. Symbian cleverly presold its outputs to strategic

customers that also provided it with venture investments. However, this dual nature made it



Internet Archive (Archive.org). We also referenced unpublished company memos and

presentations, particularly around the evolution of the company’s formal ecosystem program

during each of its phases. We utilised shareholder reports listing full audited financial statements

during those years (2003-2006) when they were made available to employee-shareholders.

We conducted interviews with current and former Symbian employees who managed aspects

of its ecosystem strategy spanning the company’s entire existence from June 1998 to November

2008.4 We were also guided by participant observation by one of the authors who was the only

senior executive to span that entire period and was directly involved in the second phase of the

ecosystem program. Finally, we supplemented our data with secondary data on the company and

its ecosystem. We drew upon news coverage, particularly in The Register, a UK-based IT news

site; and summaries of the company’s history and strategy in books by Symbian authors (e.g.

Tasker, 2000; Wood, 2005; Northam, 2006).

From this, we develop insights regarding the inherent difficulties for open innovation

platform leadership, particularly for new companies without an established revenue stream.

2 C S I



Symbian had less supplier power and platform control. The management of the Symbian

ecosystem was also constrained by the complexities of complements, systems architecture,

distribution and ownership relations not present in better known computing architectures.

2.1 PDAs Beget Smartphones

Symbian Ltd. was founded as a spinoff of another London-based company, Psion PLC, but

was co-owned and funded by the world’s largest handset makers (see Table 1 for key dates).5

Psion was created in 1980 to develop PC application software, but soon shifted to developing a

family of keyboard-based pocket computer systems: Organiser I (1984), Organiser II (1986),

Series 3 (1991) and Series 5 (1997). These products became part of became a product category

called “personal digital assistants” (PDA), which also included the Sharp Zaurus (1993), the

Palm Pilot (1996) and various “Handheld PC’s” based on Microsoft’s Windows CE (1996).6

In 1996, Nokia announced the Nokia Communicator, the first PDA type phone built upon

software licensed from Geoworks Inc. A series of PDA makers followed by licensing their

software for use in similar phones. The Palm OS was incorporated in the Qualcomm pdQ (1998),

followed by a series of Treo phones from Handspring and later Palm Microsoft licensed its



(later five) largest handset makers, they also hoped to limit Microsoft’s eventual market share.

Symbian was founded as an independent company by approximately 160 employees

transferred from Psion Software. Its goal was to license the 32-bit EPOC operating system for the

world’s leading handset makers to produce what Symbian was first to call a “smartphone.”

Beyond the ability to make voice calls on GSM mobile phone networks, the phones inherited the

capabilities of Psion’s organisers (such as calendar and address book), to which Symbian and its

partners added features suitable for a mobile Internet device (such as e-mail and web browsing).

2.2 Organisation of Symbian Ltd.

Symbian Ltd. was a software company solely focused on the smartphone market and its

primary product, Symbian OS. By the time the company had grown to 1000 employees in 2004,

technical employees — both R&D and technical consultants — comprised 77% of that total.

Because the company shipped no products directly to end users, it had a relatively small sales

operation that worked with handset makers, while the marketing organisation focused on

generating industry visibility to attract end users and third party developers.

With the exception of Psion Symbian’s shareholders were mobile phone makers that were



From 1999-2004, strategic investors provided Symbian’s working capital as the company

ramped up a large R&D operation in anticipation of high volume mobile handset sales. Facing

financial pressures of its own, in August 2000 Psion announced its intention to float its shares on

a public stock exchange, which could have also provided a dot-com type windfall to early

employees who held stock options. However, facing opposition from the manufacturer-

shareholders, the IPO was cancelled and in 2004 handset makers paid £188 million to buy

Psion’s 31.1% stake and shares newly issued to keep Nokia a minority owner (Smith, 2004).7

Internally, Symbian had a two-board structure. Its senior managers governed the company

through an “Operational Board”. The shareholders were represented on the company’s

“Supervisory Board,” whose “role is to set the standard licensing terms and conditions for

Symbian OS” (2006b), such as the company’s royalty rates. However, the shareholder-customers

also determined major allocations of resources in developing its architecture, most notably in the

various user interfaces that, in effect, created subplatforms within the Symbian platform.

3. ARCHITECTING A SMARTPHONE OS



internet, printing packages, as well as the user interface. Other middleware provided smartphone

functionality, combining PDA features such as Personal Information Manager services (for

address book and calendar) with telephony services that enabled call management and logging.

The platform allowed for Java-based applications and (except for NTT DoCoMo customers)

native C++ applications. The handset maker licensed a Java interpreter, as well as an engine for

opening word processing and other office documents. Makers of CPU, graphics and other chips

customized the operating system for maximal compatibility with their hardware.

3.2 Subplatforms

Symbian had designed its operating system to make it easy to change the user interface “look

and feel” to allow its customers to offer distinctive products. It planned to develop a family of

user interfaces for its OS (Blandford 2006). In the end, five different user interfaces were

developed (Table 3), although only three shipped more than 5 million units:

Series 60 (later S60) began at Symbian, was maintained internally by Nokia and licensed to

other handset makers. This was the most popular user interface — both in terms of phones (126)

including those from Nokia Samsung and LG and also unit sales (more than 350 million) It



stylus input and a designed to support a large (640x320) color screen. However, it was only used

by the Nokia 7710 before it was discontinued. The user interface code was later re-used by Nokia

in its Maemo Linux-based tablet computers.

UIQ was developed by Symbian using the former Ericsson Mobile Applications Lab in

Ronneby, Sweden, and was primarily used by Sony Ericsson phones. The lab was sold off as

UIQ Technology AB to Sony Ericsson in 2006; in 2007 Motorola bought half. With a stylus

based interface and a large supply of third party software, many considered the UIQ interface to

be the most modern smartphone design prior to the 2007 introduction of the iPhone.

MOAP (S) was developed by NTT DoCoMo and Fujitsu as the initial smartphone platform to

support DoCoMo’s “FOMA” 3G service (Yoshizawa et al, 2006). Beginning with the Fujtisu-

made FOMA F2051 in 2003, DoCoMo released more than 70 FOMA modelled MOAP phones

by Mitsubishi/Panasonic (starting in 2005), Sharp (2005), Motorola (2005), Sony Ericsson

(2005), and even Nokia (2006). Unlike other Symbian UIs, MOAP allowed for Java apps but not

fully native applications. The application ecosystem was managed by DoCoMo and not Symbian.

Each user interface was in effect a sub-platform of the Symbian platform, because each had



3.3 Programming Interfaces

Symbian developed a series of smartphone APIs based on EPOC. It used a customized

version of the C++ programming language to develop native applications, and it attracted

experienced Psion software developers, especially from the UK.

Application developers faced two challenges in writing software for Symbian devices, both of

which increased developer learning time and thus specialisation costs (cf. Teece, 1986). The first

was that the Symbian programming model (particular memory management) was not like any

other device — unlike Windows Mobile and (later) the iPhone OS and Linux variants (including

Android) that used smartphone versions of popular PC APIs. The second was that the mixed

platform control — between Symbian and its UI companies – meant that developers often had

trouble finding the right information about APIs or other development questions.

Two major steps lowered learning costs by adding new APIs. In 2007, Symbian released

POSIX-compatible C libraries that made it easier (but not costless) to port established Unix or

Linux applications and middleware. This enabled Symbian versions of Quake (a multiplayer

game), VNC (a desktop control client application) and Qt (a user interface library).



Signed initiative was intended to prevent viruses and other malware from taking over a handset

and causing damage to the customer’s property or the network operators (Morris, 2007). While

security was widely seen as necessary, software developers voice frustration over the resulting

technical difficulty and bureaucratic approval delays.

4. S YMBIAN’S EVOLVING ECOSYSTEM STRATEGY

When Symbian began life in 1998, it faced a number of crucial challenge of building an

ecosystem that would support its technological innovation. Despite its inheritance from Psion, it

was a new firm that eventually needed a new ecosystem. For both reasons, its managers did not

know what sort of ecosystem would be required: like its competitors, it assumed that smartphone

ecosystems would be similar to those for PDAs.

As its technology grew more popular, it attracted a growing number of potential ecosystem

members, each wanting attention to solve their particular problems. At the same time, it was a

small and (until 2005) a money-losing company with limited resources. Thus, a crucial challenge

was prioritising its scarce resources to build an ecosystem of unknown characteristics.



4.1 Symbian’s Ecosystem: Overview

Symbian OS was only available to phone users pre-installed in a newly purchased Symbian-

enabled phone. This meant that unlike a PC, Symbian could not sell end-user software upgrades

and had effectively no direct relationship with customers. Instead, adoption of its latest

technology — and revenues — depended on new adoption of smartphones and replacement

purchases by existing owners.

Symbian described its network of customers and complementors as an “ecosystem”8 (e.g.

Northam, 2006). Different categories of licenses and partner relationships included:

• System integrators or “licensees” (handset manufacturers) that integrated externally

sourced and internally developed hardware and software to create new devices (i.e.

handsets) for sale to end users.9

• CPU vendors worked to assure Symbian OS compatibility with their latest processors.

• Other hardware suppliers provided drivers for their respective hardware components.

• User Interface companies. Only UIQ Technology AB comprised a separate company,

while user interface development groups existed within Nokia and NTT DoCoMo.



for phones, and also decided what software components were preloaded on phones.

•

Enterprise software developers, for cases where a company developed Symbian-

compatible software for its employees that use Symbian phones.

In many cases, members of Symbian’s ecosystem were also members of competing mobile

phone ecosystems, such as those surrounding the Palm OS, Windows Mobile, and later Linux-

based platforms such as the LiMo Foundation and Google’s Open Handset Alliance (Android).

Unlike with personal computers, most of the largest phone manufacturers (except Nokia) and

operators were members of three or four competing ecosystems.

Knowledge transferred to partners came in three forms: codified documentation, personalized

technical support, and Symbian’s source code. Most partners had access to only a subset of

source code, while both UI companies and mobile phone operators asked Symbian to limit access

to sensitive interfaces (such as those that might allow a wayward application to make expensive

telephone calls). For employees that had full source code access, it came at a price: Symbian

demanded a “refrigeration period” (typically six months) — during which the engineers were

blocked from working on complements for competing platforms — for fear that they would



Palm — had active programs for attracting third party application software. In fact, the initial

Symbian OS carried over the APIs, technical documentation, ecosystem support staff and supply

of third party software suppliers that had worked with Psion. Psion organised a series of

Developer Conferences, starting in November 1992 with 10 talks to an audience of around 30

developers (Symbian 2008a), growing to around 200 developers at events in 1997. “One of the

attractions of Symbian OS for Nokia and Ericsson was the reasonably big set of developers we

had built up as Psion,” recalled Simon East, first VP of technology for Symbian. Symbian’s

initial ecosystem strategy thus focused on working with third party software developers.

This strategy is illustrated by Figure 2 from a 2002 presentation made to a meeting of

Symbian’s Supervisory Board (Wood 2002). Initally, Symbian used two different forms of

formalised knowledge transfer to ecosystem members. The OEM Customisation Kit (OCK)

provided the Symbian OS, tools and associated documentation for handset makers, while the

“SDK” was the Software Development Kit (SDK), with documentation used by independent

software vendors (ISVs) to create applications and other add-on software.

However, the company soon realised that other potential ecosystem members needed their



• A Tools Partner program, for providers of compilers, integrated development

environments, automated test facilities;

• A Development Partner program, for firms supplying technology to Symbian itself;

• A Connectivity Partner program, for companies providing solutions for synchronising

and backing up data between mobile devices and desktop computers.10

Each of program tended to be managed by separate Symbian employees, often in different

departments. Each program emerged following a separate motivation. It gradually became clear

each program had to meet complex needs, but that each had considerable commonality.

Over the next few years, Symbian’s actual ecosystem and the pattern of ecosystem

coordination evolved from the original Psion-inspired model (shown in Figure 2) to a new model

(Figure 3) that differed from the earlier conception in two key ways:

• Many partners were supplying software to phone manufacturers, but needed a greater

amount of technical information and software than was contained in the SDKs

designed for ISVs;

• These same partners (termed “Licensee suppliers”) needed two-way exchange of



partnering programs, into a new “Platinum Partner” program. The main differences were:

•

A deliberate preference for firms providing technology supplied in devices, rather

than software added on afterwards. The “device creation” related partners included

not only phone manufacturers (e.g., Nokia), but providers of hardware components

(e.g. Texas Instruments and Intel) and those that provided bundled middleware (e.g.

Sun and Real Networks) or development tools (e.g. Borland and Metrowerks).

• A desire to systematise the efforts of running many different partner programs, and to

obtain benefits of scale through having common development kits, event

management, billing systems, and communications systems.

A key aspect of the new program was a new package of software provided to technology

suppliers, known as the Development Kit (“DevKit”). This contained considerably more software

than in the SDKs provided for ISVs, as well as additional licensing rights, but stopped short of

the software and rights available to phone manufacturers. Meanwhile, the software package

previously known as the OCK was re-designed as the “CustKit” (Customisation Kit).

The program was discussed internally for nine months, before being announced in April 2002



• “Licensee suppliers” were renamed as “partners,” and the emphasis on supporting

them increased because of their important role in helping create new phones;

• Previously ad hoc support mechanisms from Symbian to different partners were re-

organised around the existence of the new DevKit;

• Previously ad hoc exchange of information and software between partners and

licensees became governed by contractual terms in the new DevKit License (DKL);

• Symbian put less priority on direct support of ISVs, on the assumption that the task of

supporting applications developers would shift to the phone makers and those

companies UI systems, which after 2001 were located outside Symbian.

Instead of directly supporting ISVs, Symbian’s Developer Network program would

concentrate on being a hub of support for the developer networks in partner companies, who

would in turn support ISVs.

Once the Platinum program structure was in place, it grew rapidly: by the end of 2002, it had

attracted 100 companies, and nearly 300 by early 2006. Even as the program grew in size,

Symbian management felt constant conflict between “quantity” and “quality” of partners:



to administer a larger program, which included keeping track of contacts, preparing and chasing

invoices, providing technical support, and running larger partner events.

Other difficulties in running a large partner program were already anticipated at the time the

Platinum program was created. An April 2002 analysis of the partner program (Wood 2002)

noted two potential problems. First, many firms were trying to become partners, but they varied

widely in terms of their ability to deliver meaningful products. Secondly, Symbian did not have a

large enough technical staff to provide the desired level of support for all possible partners.

For these reasons, a prioritisation scheme was viewed as inevitable, and partners (including

potential partners) were internally allocated to different tiers of importance: AA, A, B, and C.

The AA partners were 15 companies deemed most critical to Symbian’s success, A-level were 50

companies of high significance, the B level were those with at least one internal champion, and

the C level comprised the remainder (Wood 2003).

Finally, ecosystem members differed significantly in their rights to use Symbian’s IP: phone

manufacturers had less restriction than partners. Phone manufacturers received all source code to

Symbian OS11 whereas partners did not receive so-called “Category A” source code that was



“It should be easy to stop wasting effort on the low-value partner engagements and to put more

effort onto the high-value partner engagements”. But as the review projects progressed, the

optimism changed to an acceptance that the easy optimisations of the program had already been

made, and that partnering activity which initially looked low-value was often highly valued by

important Symbian stakeholders (key customers, internal strategists, and so on).

4.4 Phase 3: Symbian Partner Network

In November 2007, Symbian began developing a new partner program to meet two key

objectives. The first was to increase the efficiency of the program through the enhanced use of

IT, particularly increased web-based automation of common activities and creation of an

improved extranet (called “SDN++”) to communicate with ecosystem members. The second was

to utilise that increased efficiency to lower the price and broaden the reach of the program,

particularly with independent software vendors.

The most visible change was a reduction in the annual fee from $5,000 to $1,500. Part of the

cost savings came by eliminating assigned partner managers for each registered partner, with

ecosystem members instead supported using extranet based standard information and (paid)



5. FIRM AND PLATFORM SUCCESS (2002-2007)

5.1 Platform Success

In 2000, Ericsson shipped the first Symbian-enabled phone, the R380. Nokia followed in

2001 when its second generation “communicator” product, the 9210, was built upon Symbian

OS. The Symbian platform enjoyed uninterrupted exponential growth from 2002-2007; after

three flat years, sales set a new record in 2010 with nearly 112 million units sold (Figure 5).

Symbian’s initial smartphone competitors — Palm and Microsoft — were also PDA based,

but led by Nokia, the Symbian platform passed both to achieve a majority of global mobile

device sales (including PDAs) by mid-2004 (Canalys, 2004) Over over time the competitive

threat from Palm faded, but phones licensing Windows Mobile and vertically integrated

smartphones from Research in Motion (the Blackberry) and Apple (the iPhone) continued to

grow in sales, particularly in North America. New platform competitors also emerged built upon

open source software: two nonprofit consortia were formed in 2007 to standardise and promote

Linux-derived handsets: the LiMo Foundation (led by British operator Vodafone) and the Open



PDA) market, after 43% for Palm OS and 25% for various Windows mobile devices. (Canalys,

2004). One major problem is that Symbian announced (and then abandoned) plans to adapt

Symbian OS for CDMA networks, which accounted for a majority of US subscribers.12

Another major obstacle was winning distribution for phones from the US’s three (later two)

nationwide GSM carriers. In particular, the largest of the GSM carriers — Cingular (later AT&T)

— wanted weak suppliers and so rarely carried any phones from Nokia, the global mobile phone

leader. As a consequence, Symbian was dependent on the relatively weak T-Mobile.

When Nokia brought its first Symbian phone to the US, the $600 Nokia 9290 Communicator,

without operator support it distributed the phone via computer dealers, IT consultants and its

website. Nokia even opened retail stores in NY and Chicago in 2006, but closed them in 2010.

5.2 Firm Success

Despite rapid organisational growth and market share success, Symbian faced severe resource

constraints, suffering years of losses developing its platform prior to achieving economies of

scale sufficient to support its R&D efforts. Building on the Psion code base, Symbian spent (by

our estimate) more than £200m on R&D from 1999 2004 to develop three major Symbian OS



Symbian phones in a single year — and was in fact adopted at its behest.

Finally, of Symbian’s handset customers, only Nokia was able to achieve economies of scale

for its product and UI platform development costs. While Nokia averaged sales of more than 3

million units per smartphone, Sony Ericsson averaged less than 1 million, and also had to support

the UIQ subplatform development with less than 10% of Nokia’s smartphone revenues.

5.3 Assessing Symbian’s Platform Success

At the beginning of 2008, Symbian’s platform and ecosystem strategies had achieved great

success. It had attracted 9,282 third-party software applications and in 7! years, its operating

system had been shipped in 200 million phones, the most in the industry (Symbian 2008b).

Throughout its ecosystem strategy, Symbian had ongoing debates over the balancing between

competing goals such as quantity vs. quality, fairness vs. focus, and personal attention vs.

economies of scale. In making such decisions, the Symbian executives and ecosystem managers

faced three major limitations.

The first was a cognitive blindspot towards the nature of the ecosystem. As part of the Psion

PDA (and PC) legacy Symbian’s founders took for granted that its ecosystem would be like



Wood (2005) identifies a number of potential pitfalls of mobile phone production, including

changes in operating system (or UI) APIs across new releases, problems with third party software

reliability and integration, and contractual delays in obtaining rights to distribute such software.

Finally, Symbian’s ecosystem management had limited resources and had to be self-

supporting — particularly until Symbian earned its first profit in 2005. Rather than maximizing

partner access, the partner program was limited to providing services to those partners willing to

pay enough money to support the cost of providing those services. These restrictions were

gradually reduced through IT-enabled efficiencies, including shifting from paper to “click

through” agreements and distributing information via an extranet rather than CD-ROM.

Symbian’s shifting treatment of application software was also problematic. Under its initial

ecosystem strategy, the company focused on applications at the expense of helping handset

makers and those providing pre-installed software that had to be ready to ship with the handset.

These early priorities delayed the availability and sale of smartphone handsets that would attract

buyers away from conventional handsets, create an installed base for application developers, and

also provide revenues to Symbian that would reduce its severe resource constraints.



the software unit price — both more similar to PDAs than PCs. Unlike a platform leader who

squeezes complementors for profits in a zero-sum game (Gawer and Henderson, 2007), Symbian

did not intend to starve its complementors, but focused more on its own problems than theirs.

These difficulties suggest two modifications the positive-feedback network effects model (cf.

Gallagher & West, 2009). First, while theory asserts that more software increases hardware sales,

this assumes the ceteris paribus condition that attracting software does not delay the development

or sale of hardware. If the hardware has a direct utility without adding software complements —

and if the hardware must compete with an established substitute to attract buyers — this suggests

the early priority must be on creating an installed base of hardware.

Second, the attractiveness of a platform to complement providers is not merely the size of its

installed base, but the installed base size times its propensity to buy complements. If a given

platform (or product category) has a higher propensity to install complements — whether PCs vs.

smartphones or between competing videogame platforms — then that creates a larger addressable

market. Similarly, a lower unit price for complements is attractive only with a large installed

base, high purchase propensity, or low specialization cost (cf. Teece, 1986) — exactly the



Finally, Symbian’s entire “open” platform strategy arguably depended on it being an

independent supplier not beholden to any one customer — which was plainly no longer true after

2004. The Wintel platform succeeded precisely because Microsoft and Intel aggressively courted

and developed competitors to their initial customer IBM, which gave them new customers, grew

the market and provided incomparable economies of scale. Although Nokia lacked a controlling

interest in Symbian, its de facto control of Symbian’s revenues allowed it to discourage (if not

block) efforts by Symbian to create competitors to Nokia.

6. SUDDEN AND UNEXPECTED DECLINE

The year 2007 marked the high water mark for both Symbian unit sales, but also for its

influence on buyers, complementors, handset makers and public perceptions. A little more than

three years later, Symbian Ltd. had ceased to exist as a legal entity and its technology was

officially orphaned by Nokia, its only remaining customer.

While Symbian enjoyed strong market share in Europe and much of the world, it had very

low penetration in North America . This enabled entry by three local platform sponsors: Research



6.1 Anticipating but not Meeting Architectural Challenges

With its clear focus on creating the smartphone category, Symbian and its partners had

anticipated key elements of the dominant design before Apple, but failed to execute on bringing

them to market or to combine them into a single product.

The UIQ interface was a stylus-based input method, and a full-sized display (albeit at lower

resolution) was characteristic of the earliest Sony Ericsson phones — P800 (2002), P900 (2003)

and P910 (2004) — as well as the Motorola A1000 (2004) and A1010 (2005). However, the

phones were far less popular than Nokia’s competing models, and Motorola abandoned UIQ

(twice) while Sony Ericsson shifted to promoting a Walkman family of music-oriented phones.

Conversely, starting in 2006 Nokia distributed a web browser for S60-based phones that used

the same WebKit technologies and broadly offered the same capabilities as the later iPhone and

Android browsers. Because of the fragmented Symbian UIs and subplatforms, a comparable

browser for UIQ phones was never released.

Symbian was limited by its legacy code and its installed based to meet the challenge of more

modern APIs and better development tools provided by Apple and Google, which both started



In July 2008, Apple launched the iPhone App Store, providing an application distribution

mechanism that bypassed both third-party distributors and the operators’ own application stores.

The new store offered an unprecedented feature for a computing platform: a built-in way to

directly sell and install all third party applications. It also provided Apple with 30% of all

download revenues, although a large proportion of the applications were provided free.

The new App Store grew dramatically: while Symbian had taken 7! years to acquire nearly

10,000 applications, the iPhone app store reached 15,000 apps after six months and 100,000 after

16 months (West & Mace, 2010). The success of the App Store attracted customers and

complementors, bringing tremendous favourable publicity for Apple.

In response, sponsors of the Android, Windows Mobile and BlackBerry platforms all

announced their own app stores. Symbian took 15 months to launch its own app store and —

constrained by both Nokia and its operator partners — was not allowed to sell directly to users,

but instead provided wholesale distribution via Nokia’s Ovi store and the operators’ stores.

By one estimate, total 2010 app store revenues reached $2.2 billion; Apple’s store accounted

for 83% of the total, with software developers receiving $1.25 billion and Apple’s commission



royalty-bearing license. Meanwhile, Android offered a royalty-free license and full source code

to any external partner. At the 2007 launch of the Open Handset Alliance, Android’s nominal

sponsoring organisation, founding members included two Symbian shareholders and licensees —

Motorola and Samsung — as well as NTT DoCoMo, Symbian’s main sponsor in Japan;

shareholders Ericsson and Sony Ericsson joined 13 months later (Table 5).

Symbian was founded with the intention of providing a platform shared by all handset

licensees. However, from 2003 onward, Nokia accounted for the majority of all Symbian unit

sales. By 2008 it won more than 85% of Symbian sales, and with it de facto platform control.

While Sony Ericsson once placed all its smartphone bets with the Symbian platform, other

licensees such as Samsung and Motorola placed only tentative bets that they later abandoned. By

2009, Android had achieved what the Symbian platform ultimately failed to do: provide an open

innovation platform shared by a wide range of handset makers and controlled by none of them.

6.3 Platform Extinction

Facing challenges from Apple and Google, Nokia made a series of increasingly desperate

moves to preserve its smartphone market share leading to the phased elimination of Symbian



(notably Android). Nokia completed its acquisition of Symbian Ltd. in November 2008, created

Symbian Foundation in early 2009, and transferred control of the Symbian OS source to it. In

February 2010, the foundation released all of the Symbian OS source code: the estimated 40

million lines of code was said to be the largest open source release of formerly proprietary code.

However, the open source experiment soon proved a failure. With the rise of Android, other

potential handset sponsors stopped funding the Symbian Foundation, leaving Nokia’s

contributions (and its internal R&D group) providing nearly all the resources to support the

platform. While shipment of MOAP phones continued in Japan, in October 2010 both Samsung

and Sony Ericsson announced they would no longer develop Symbian phones.

Three weeks later, Nokia announced plans to provide developers a common user interface

and set of APIs by bundling the Qt framework on top of its S40 (feature phone), S60 and Maemo

(tablet) platforms. However, the announcement failed to stem a loss of confidence in the firm and

its smartphone market share. In January 2011, Nokia announced that starting in 2012, it would be

using Microsoft’s Windows Phone platform instead of Symbian in all its smartphones.

7 D



The personal computer industry provides an example of an open innovation ecosystem, in

which Microsoft and Intel supplied key innovations as components brought to market by PC

makers (West 2006). This afforded PC makers a ready source of external innovations without

incurring the risks and costs of developing those innovations; the price was that key component

suppliers captured the bulk of the profits of the PC ecosystem (Kraemer & Dedrick 1998).

Symbian Ltd. was founded to create the dominant smartphone platform. As with the Wintel

platform, it hoped to wub licensees through the economies of scale it provided through shared

R&D costs, and it followed the key precepts of platform leadership to build a technical

architecture and ecosystem. It succeeded in resisting the threat of envelopment (as defined by

Eisenmann et al 2010) by the Wintel alliance. However, because its ownership was intentionally

designed to prevent rent-seeking as the platform leader, its ability to set an independent course

was ultimately constrained by the dual role of its largest shareholder and customer.

We believe Symbian’s eventual failure suggests key difficulties in achieving platform success

in the case of divided leadership. To begin with, the existence of such divided leadership suggests

a broader problem of defining and operationalising platform leadership with multiple leaders. For



and Saloner (1986), computing platforms reflect a series of linked contests (Gallagher and West,

2009). This points to an underappreciated aspect of the Gawer and Cusumano (2005) conception:

platform leadership requires an ongoing investment in both the architecture and ecosystem.

Prior platform research has also emphasized sustained competitive advantage (and thus

profits) as the outcome of successful platform leadership. However, such profits are not just a

consequence, but a necessary antecedent of platform success. In particular, we believe that

Symbian demonstrates that a key role of a platform leader is extract profits from the value chain

and reinvest those profits into expanding the technical and organisational reach of the platform.

(The Symbian ownership structure was designed explicitly to prevent Wintel-type profits.)

In fact, we suggest an empirical regularity in the role of cross-subsidies in launching and

sustaining a new platform. Table 6 lists various examples where the “cash cow” profits from an

earlier platform were successfully used by companies diversifying into a related industry

segment, a process we term “platform chaining.”14 Conversely, the case of Real Networks cited

by Eisenmann and colleagues (2010) is another example of a firm that lacked either an existing

cash cow or a sizable revenue stream from existing customers to maintain its early platform lead.



7.2 Future Research

While prior open innovation research has suggested the role of ecosystem management

(Maula et al, 2006; Vanhaverbeke, 2006), we are unaware of any previous research explicitly

examining how platform control affects open innovation or vice versa. We believe that further

research at the intersection has the potential to inform both streams of research.

We believe that the evolution of Symbian’s ecosystem strategy — and the strategies adopted

by competitors — call for an update to our conception of ecosystem management beyond that of

the PC or VCR. We also believe that research needs to consider the interdependence of

ecosystem strategies by competitors in the same industry — whether through a dominant logic,

direct imitation or through shared ecosystem membership.

Finally, we believe that Symbian’s challenges in controlling versus sharing information

suggests a broader conception of strategic openness. The degree of openness is a fundamental

strategic lever, but one limited by endogenous pressures for openness created by competitors.

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9. END NOTES

1Here we focus on computing platforms as defined by Bresnahan and Greenstein (1999: 4): “ as a

bundle of standard components around which buyers and sellers coordinate efforts.” Some

definitions of a “platform” might count the world wide web as a platform, or specific applications

such as a web browser or Microsoft Office.2

We do not mean to suggest a pattern of vertically integrated platforms defeating open innovation

platforms (or vice versa). By and large, the successful vertically integrated platforms vanquished other vertically integrated platforms, as with IBM vs. the BUNCH or the various minicomputer makers

defeated by DEC (Bresnahan & Greenstein, 1999). Similarly, competition within a shared platform(such as Wintel personal computers) would of necessity mean that both the winners and losers would

be competing using the same platform organisation. While Grove (1996) argues that the defeat of theMacintosh by Windows proves the superiority of the shared platform approach, the success of theiPhone over Windows Mobile challenges the generalizability of this claim.

3Compaq was acquired by Hewlett-Packard in 2003, and today the combined entity is the largest PC

maker in the world. Gateway was acquired by Acer in 2007, and together rank third globally.4 The first author interviewed Simon East, VP of Technology from 1998-2001; David Wood, head of Symbian Platinum Partners from 2002-2004; Alan Roderick, head of the Symbian Competency

Centers from 2001-2004 and the Platinum program from 2004-2007; and Patricia Correa, who

succeeded Roderick, developing and launching the Symbian Partner Network program in 2008.5

The history of Symbian and its relationship to Psion can be found in Tasker (2000) and Northam

(2006).6 Here we focus on the pocket-sized PDAs that eventually proved to the be dominant design for the

product category, rather the unsuccessful, tablet-sized PDAs such as the Apple Newton (1992-1997)

and AT&T EO (1993-1994) that first gave the name to the category.7

At this price, the company’s valuation remained unchanged since April 2002, when Siemens bought a

5% stake in Symbian that valued the company at £456 million (Symbian 2002b). Nokia’s 2008acquisition of Symbian valued the company at £401 million



10. FIGURES AND TABLES



Legend:• OCK: OEM Customisation Kit (for handset makers)• SDK: Software Development Kit (for software developers)• ISV: Independent Software Vendor

Source: Wood (2002) Figure 2: Symbian’s ecosystem concept as of 1998



Legend:• DevKit: Development Kit (for component providers)• CustKit: OS Customisation Kit (for handset makers)

Source: Wood (2002)

Figure 4: Symbian’s ecosystem concept as of 2002



Date Event

1994 Psion begins developing a 32-bit PDA operating system, later known as EPOC

1996 Nokia ships Series 9000 Communicator, its first PDA phone, using software licensed from GeoworksJune 1997 Psion ships Series 5 PDA based on EPOC operating system

June 1998 Symbian Ltd. founded in London by Psion PLC, Nokia Oy and Ericsson AB

Oct. 1998 Motorola pays $17.9 million to acquire 23% stake in Symbian Ltd.

April 1999 Symbian acquires Ericsson’s Mobile Application Lab, which later becomes UIQ Technology AB

June 1999 Symbian holds first conference in London for developers and other ecosystem members

Feb. 2000 Symbian’s second developer conference is held in Silicon ValleyAug. 2000 Psion announces plans (later cancelled) to spinoff Symbian shares in public offering

Sept 2000 Ericsson ships R380, first Symbian OS phone

June 2001 Nokia ships its first Symbian OS phone, Nokia Communicator 9210

Oct. 2001 Sony and Ericsson combine mobile phone divisions into U.K.-based joint venture

Nov 2001 Nokia announces plans to license Series 60 user interface to other firms

April 2002 Symbian launches Symbian Platinum Partner Program, a revised ecosystem relations program

June 2002 Nokia 9290 Communicator is first Symbian phone sold in the U.S.

Dec. 2002 Fujitsu releases first Symbian-enabled MOAP phone for Japanese market

Oct. 2003 Motorola sells Symbian shares to Nokia and Psion for £57 million ($93 million)

Nov. 2003 NTT DoCoMo licenses Symbian OS for distribution by its phone suppliers

Feb. 2004 Psion announces plans to sell entire 31% stake in Symbian to Nokia for £135 million ($251 million)

July 2004 Psion and Symbian sell shares to Nokia, Sony Ericsson, Matsushita, and Siemens for £188 million

Feb. 2005 Symbian announces Symbian 9, promises shipments in “second half of 2005”

April 2006 Nokia N91 is the first phone to ship with Symbian 9 operating system with Symbian 9.1



Table 1: Key dates for Symbian ecosystem

Company HQ 1998 Q2 1998 Q4 2002 2006

Psion UK 40% 30.7% 26.6% Nokia Finland 30% 23.1% 20.0% §47.9%Ericsson† Sweden 30% 23.1% 20.0% 15.6%Sony Ericsson UK 13.1%Matsushita Japan 8.4% 10.5%Samsung Korea 4.5%Siemens†† Germany 5.0% 8.4%

Motorola US 23.1% 20.0%Sources: News coverage, Symbian website

Notes:† Ericsson assigned its handset business to the Sony Ericsson joint venture in 2001

†† Siemens sold its handset business to BenQ in 2005 but remained a Symbian shareholder

§ Nokia had 100% ownership after November 2008

Table 2: Shareholders of Symbian Ltd., 1998-2006

User Interface Series 60† Series 80 Series 90 UIQ MOAP (S)

Code name Pearl Crystal Hildon Quartz

Originator Symbian Symbian Nokia Symbian/Ericsson NTT DoCoMo

Developer Nokia Nokia Nokia UIQ Technology Fujitsu

Retail

availability

2001- 2000-2007 2004-2006 2002-2009 2003-

Number of

models

126

Nokia: 104

Samsung: 15

Nokia: 5 Nokia: 1 21

Sony Ericsson: 12

Motorola: 6

Nokia: 1

70+

Fujitsu

Panasonic

Sony Ericsson

Sharp

Best-sellingd l

Nokia N-series Nokia 9000i

Nokia 7710 n/a n/a



- 45 -

2008 Q1-

Q2

2007 Q1-

Q2

2007 2006 2005 2004 2003 2002

Royalties £70.8m £78.2m £179.1m £151.8m £96.8m £45.2m £25.5m £7.7mOther income £10.5m £7.2m £15.2m £14.4m £18.0m £21.3m £19.9m £21.8mTotal revenue £81.3m £85.4m £194.3m £166.2m £114.8m £66.5m £45.5m £29.5m

R&D £70.0m £54.5m £43.7m £40.3m £35.8mSG&A £34.1m £27.0m £23.5m £19.9m £16.8mNet income £55.1m £15.3m (£23.0m) (£26.5m) (£37.2m)

Gross margin 84.4% 77.5% 70.7% 63.9% 43.8% Net margin 33.1% 13.3% -34.6% -58.3% -126.1% R&D intensity 42.1% 47.5% 65.8% 88.7% 121.3% R&D (% of operating expense) 67.4% 66.4% 60.3% 68.2% 67.8%

Total employees 1191 1047 835 734 653

R&D employees 824 693 525 464 405

Unit Royalty ($) $3.7 $4.4 $4.5 $5.30 $5.14 $5.7Unit royalty (£) £1.86 £2.26 £2.32 £2.94 £2.85 £3.14 £3.81 £7.70Total unit sales 38.1m 34.6m 77.3m 51.7m 34.0m 14.4m 6.7m 1.0m Nokia units† 60.5m 40.1m 28.5m 12.0m 4.3m 0.5m

Source: Symbian.com press releases via Archive.org and 2003-2006 Symbian annual reports to shareholders.Authors’ calculations shown in italics.

† Estimates based on Symbian press releases, Nokia annual report and analyst reports

Table 4: Symbian Ltd. financial performance, 2002-2008



- 46 -

Symbian Android

Handset

Maker

Primary

UI

Symbian Ltd

Shareholder

Symbian Foundation

Member

First

Handset

Last

Handset

Open Handset

Alliance Member

First

Handset

Nokia S60 1998 2008 2001 § - -Samsung S60 2003 2008 2004 2009 2007 2009

LG S60 - 2008 2007 2009 2007 2010SonyEricsson†

UIQ 1998 2008 2000 2010 2008 2010

Motorola UIQ 1998 2008 2003 2008 2007 2009

NTT DoCoMo MOAP - 2008 n/a n/a 2007 n/a

Fujitsu MOAP - 2009 2003 - - -Matsushita MOAP 1999 - 2005 - - -

Sharp MOAP - - 2005 - 2008 ?

HTC - - - - - 2007 2008Founding members shown in italics

† Ericsson prior to 2001 formation of Sony Ericsson Mobile Communications. joint venture

§ Announced plans to replace Symbian with Windows Phone starting from 2012

Table 5: Licensees of open platform mobile operating systems

Company Cash Cow Platform New Platform Reference

IBM System/360 IBM PC (1981) Moschella (1997)

Apple Apple II Macintosh (1984) Malone (1999)

Apple Macintosh iPhone (2007) West & Mace (2010)

Microsoft Windows Xbox (2001) Takahashi (2002)

Sun Solaris Java (xx)

Intel Wintel-compatible PCs Lintel servers (1995) West & Dedrick (2001)

Google Google search engine Android (2007) Kenney & Poon (2011)† Wintel: Windows on Intel; Lintel: Linux on Intel

Table 6: Examples of successful chaining from a cash cow platform to a new platform

2011-03 westwood siepr

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