• Business Week , Wednesday, June 25, 2008 10:30 AM

When Nokia announced Tuesday that it plans to fully acquire Symbian, the leading maker of operating system software for advanced mobile phones, it signaled that that it does not intend to cede its ground in mobile-phone software to gate crashers like Apple, Microsoft or Google. The Finnish company will merge the company with parts of its own organization and then create an open-source foundation that will give away the resulting software for free to other handset makers.

In the past year, the complexion of the industry has shifted as the new rivals -- most using open-source Linux software -- have barged in. Nokia and the newcomers are now locked in a high-stakes battle whose outcome could shape the future of mobile communication and, by extension, of the Internet, as a growing number of consumers around the world access the Web from handheld devices.

Before Nokia can convert millions of customers to wireless Web services, though, it has to give many more phones the capability found in its high-end N-Series models or the trendsetting Apple iPhone. That's where Symbian comes in: Today it's used mostly for top-of-the-line devices, but Nokia and others want to see it move down into mass-market products (known as "feature phones").

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