Online Extra: Q&A with David Levin

The CEO of Symbian, a maker of software for smart cell phones, says these devices will eat into the markets for cameras, games, and PDAs

David Levin, 41, is the CEO of privately held Symbian Ltd. The London-based concern was founded in 1998 by Nokia (NOK ), Motorola (MOT ), and Ericsson (ERICY ), among others, to develop advanced software to power smart mobile phones and handheld computers.

Levin has been at the helm just over a year, during which time Symbian's software has finally begun to catch on with device-makers and consumers. Meanwhile, rival Microsoft is still having trouble getting traction in a market it views as critical to the future (see BW Online, 6/30/03, "Microsoft's Second Assault on Smartphones"). Levin recently spoke to Andy Reinhardt, BusinessWeek's European technology correspondent, by phone from San Diego. Following are edited excerpts of their conversation:

Q: Tell me a bit about the history of Symbian.


Symbian was spun out of Psion [a British company that used to make handhelds]. The first CEO was Colly Meyers. He was a developer's developer, a software architect of remarkable prowess and vision. More than that, he made the vision real, made it work. But he didn't see the business in very commercial terms. He made it clear 18 months before he left that he felt his phase as the leader was coming to an end. I had been on the supervisory board for two years, and then the shareholders asked me to become CEO.

Q: How have you turned around the company?


It's mostly a perceptual turnaround. My predecessor left the business in good shape. But no question, people were saying that Symbian was four years on, and the company had not delivered what people expected during the height of the boom.

Q: Perceptual or not, there seems to have been an awful lot of news out of Symbian recently.


We've seen a flurry of products over the last three months. The most significant for us were the new Siemens SX-1 [cell phone], which is coming out in June, and the Samsung SGH-D700 [cell phone]. These are two big products for us. We've also signed up our first Taiwanese manufacturer, BenQ, which is an ODM, [for "other device manufacturer," or a company that manufactures finished products for relabel and sale by others].

Also, [British mobile-phone maker] Sendo: They're showing privately a smaller, lighter phone [than the Microsoft-based Z-100 that Sendo canceled last fall] that they're delighted to say works. That should ship midyear. We've also landed our first 3G phone in Japan, a Fujitsu (FJTSY ) model made for DoCoMo.

Q: What internal changes have you made?


In the last year, we have really reached out to target mobile operators, which we didn't do before. Our relationships with our shareholders and licensees have changed now that we have real customers, and not just shareholders. Now we reach up and down the value chain, which I'm excited about.

We're starting to take advantage of the introductions our shareholders can offer us. This spring, we even had a meeting with operators only, with none of our shareholders there. Perhaps the most disappointing thing for us this year was that Motorola has said they will do their own thing, that Symbian is not core to their strategy.

Q: So how has your shareholder/ownership structure changed?


The big change is that 62% of our shareholders are now financial investors only. Ericsson has 17.5% of the company, but it has given up the handset business to the Sony Ericsson joint venture. Sony Ericsson now owns a small share -- it came in at the point when Ericsson decided to stop investing in Symbian. Psion owns 25.3%, and Motorola has 19%. [The other shareholders are Nokia (19%), Panasonic (MC ; 7.9%), Samsung (5%), and Siemens (SI ; 4.8%).]

Q: The key strategic change is that you no longer offer a one-size-fits-all software solution. How did that come about?


Originally, Symbian's vision was to provide a soup-to-nuts operating system suited for three basic form factors: Classic smartphones, tablet-format handhelds, and QWERTY, or clamshell devices like the Psion handhelds or Nokia Communicator. What emerged was that nobody knows yet what consumers really want, what will make these devices charming to consumers. There are religious convictions out there about menus vs. icons and thumbs vs. styluses. We see most development programs for new phones now costing $20 million to $100 million, so the stakes are high.

These religious wars aren't fruitful. If you try to reconcile all the differences and demands, you set yourself up to fail. So, in the end, we decided to accommodate multiple user interfaces. We acquired one we call UIQ, and that's the one running today incredibly successfully on the Sony Ericsson P-800 [mobile phone]. They're ecstatic about how the product is doing. You'll see UIQ on the BenQ phone. [Motorola's Web site also shows it on the 3G phone it's developing for Hutchison (HUWHY ).]

For one-handed use, there are also competing visions. Nokia had one very clear view, and so it created Series-60. The company's innovation was to license that user interface widely and with great success. But Nokia's Series-60 is only one of the user interfaces we offer. The one-handed user interface for the Fujitsu/DoCoMo phone is completely different.

The problem was getting everybody to agree. The solution was to split it up, and let the better-resourced Nokias of the world develop user interfaces to their liking. Maybe this is a bit of post-rationalization. But now we see it's the right thing. We call it differentiation without fragmentation. For developers, it's not that hard to move an application from one user interface to another. Worst case, 85% of the code is unchanged. Best case, 95% of an application translates directly from one user interface to another with a tiny bit of tweaking.

Q: How does what you're doing differ from Microsoft's approach?


We're becoming more and more phone-heads. We're just adding bits of applications progressively, but we're not trying to replace the PC. Frankly, it's more likely that phones will eat into the markets for cameras, games, and PDAs. The common feature in smartphones is not their PC-ness but their phone-ness: The central element is communications, and on top of that we're adding other capabilities. Some applications will take root, and others won't. But smartphones are fundamentally personal products.

The real story between us and Microsoft is that every year for the past five years they have announced an initiative that commentators have heralded as the death of Symbian, but it still hasn't happened. This is a marathon, and we're only in the fifth lap.

There are now millions of Symbian units out there, whereas Stinger [the former codename for Microsoft's handset software] units are maybe in the tens of thousands. [British mobile operator] mmO2 says it has sold 55,000 XDAs [a handheld that uses Microsoft's Pocket PC software] since launch, but we've sold millions of units. Fifty-five thousand is a bad day for cell-phone sales. The millions of pounds spent just to promote the O2 XDA were amazing.

Q: What's Symbian's exit strategy? Are you still planning an initial public offering?


The shareholders are on record that an IPO is the preferred route for all parties. But there are two criteria: The establishment of a mass market for our products and the condition of the public markets. An IPO remains our intended and expected route, but it's by no means the only one. I'm running the company to create value for our shareholders, and now, a majority of them only have an interest in the value of the shares.

People have come to terms with having passed through the tech boom and still being here and growing. Even if we had an IPO, we'd still face the same market challenges. And at this point we don't need the additional equity. Frankly, it was a lot better to have been private during the troubled years.

Q: Tell me about your personal background.


I was born in South Africa, into a liberal Jewish household interested in human rights. We moved to Rhodesia, and then in 1965, fled to England. We weren't technically asylum-seekers, but my father was a journalist and critical of the Smith regime [Ian Smith, Rhodesia's Prime Minister at that time], and he was offered the chance to leave the country or go to jail.

I was educated in London, went to Oxford for university, then joined a U.S. consulting firm and worked in West Africa, Taiwan, and Korea. Then I got an MBA at Stanford and went back into consulting in Asia and Malaysia. I finally came back to Britain and joined a management buyout firm for a few years, and then I went into the publishing world and became president and publisher of Institutional Investor in New York.

In the late 1990s, I got interested in the idea of e-publishing and electronic distribution of content, and I joined Psion as CEO. I saw that information exchange would be totally transformed by PDAs, cell phones, and the Internet.

Q: What about your interests and passions?


My background was very progressive. The Jewish community in South Africa came mostly from Central Europe and survived the Holocaust. As a child of Africa, I have a passion for development. We travel a lot to the developing world, and I'm involved in several nonprofits, including ActionAid and Oxfam, plus another I prefer not to identify.

Every year, I'm more struck by the value of cellular communications. It's a fundamental need, not just a rich-world issue. We visited a village in Africa where there was one mobile phone, used by everybody for everything, from calling the doctor to planning market trips. There wasn't even power in the village, so they had to take the phone to a nearby town once a week to charge it. But it had totally changed their lives.

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