The acquisition is a fundamental step in establishing the Symbian Foundation, which Nokia also announced Tuesday along with AT&T, LG Electronics, Motorola, NTT DoCoMo, Samsung, Sony Ericsson, STMicroelectronics, Texas Instruments, and Vodafone.

Olli-Pekka Kallasvuo, CEO of Nokia, called the acquisition and the foundation significant milestones in the firm's software strategy.

"Symbian is already the leading open platform for mobile devices," Kallasvuo said. "Through this acquisition and the establishment of the Symbian Foundation, it will undisputedly be the most attractive platform for mobile innovation. This will drive the development of new and compelling Web-enabled applications to delight a new generation of consumers."

Nokia Targets Microsoft, Google and Apple

According to the latest research from Strategy Analytics, the creation of the Symbian Foundation will be good for Nokia but bad news for Google's Android and Microsoft.

Neil Mawston, director of Strategy Analytics, expects Nokia to use royalty-free Symbian software as a loss leader to drive growth in handsets and services in 2009.

"This is a good move for Nokia, because cheaper smartphones for the mass market will eventually drive higher global volumes of Nokia devices and [Nokia's] Ovi content ," Mawston said.

Bonny Joy, an analyst at Strategy Analytics, said a lower cost for the Symbian operating system is bad news for license-based rivals, such as Google's Android and Microsoft's Windows Mobile. The change will impact Android on volume and Microsoft on value.

"Symbian will match Android on zero-dollar pricing, and this diminishes one of its major competitive advantages," Joy said. "For Microsoft, the pressure will surely mount to cut the price of its license fees for handset vendors, which we estimate to be a relatively high $14 per unit worldwide in 2008."

The Battle for Developers

At some level, the acquisition is no surprise. But the timing is telling. Nokia has been closely associated with Symbian for many years. In fact, Nokia's Series 65 platform is built on Symbian technology. Nokia's acquisition is a bold move that demonstrates the heated battle for mobile supremacy, according to Michael Gartenberg, an analyst at JupiterResearch.

There are two battles going on, he explained. One is for the heart and minds of handset makers. The other is attracting developers.

"Of course, Nokia is hoping to put pressure on not only Android but Windows Mobile but also on Apple's iPhone," Gartenberg said. "This move creates and facilitates a strong development story for Nokia. As each of the platforms vies for supremacy, one of the things each platform is looking for is to maximize the developer story so they can attract a community to the platform."