Symbian announces Q3 2004 results

Worldwide Symbian OS phone shipments rise to 3.7m, installed base reaches 19.2m phones

LONDON, UK, 11th November 2004 - Symbian Limited today releases the following unaudited financial and operational figures for the third quarter ended 30th September 2004:

Operational Highlights

• 3.7m Symbian OS-based phones shipped to network operators and retailers (Q3 2003: 1.23m units), a year-on-year increase of 201%
• Q3 2004 shipments were made up of 29 different phone models from six Symbian OS licensees (Q3 2003: 10 products, six licensees)
• Actual 12 month run-rate of Symbian OS shipments to end of September 2004 was 11.45m units (12 month run-rate to end of September 2003: 4.89m units)
• Total installed base of Symbian OS phones is now more than 19.2m units
• Year-to-date worldwide Symbian OS shipments were 8.69m (Jan – Sept 2003: 3.91m)
• Commercial roll-out of 3G networks is accelerating; 10 W-CDMA (3G) phones from three Symbian OS licensees have shipped to operators across Europe and Asia
  • Motorola has reached an agreement to supply NTT DoCoMo with Symbian OS-based 3G products
  • Nokia will supply Vodafone KK with its first 3G Symbian OS product
• Six new products based on Symbian OS began shipping this quarter (Q3 2003: 3 products)
  • two Fujitsu phones for NTT DoCoMo’s 3G FOMA network, (one implementing the FeliCA e-commerce standard, the other targeting more mature users)
  • Nokia 6260 for GSM / GPRS markets, Nokia 6620 for the Americas market
  • Sony Ericsson P910 for GSM / GPRS markets, Sony Ericsson P910c Chinese language variant
• The number of commercially available third party applications for Symbian OS phones rose to 3,254 (end Q3 2003 – 1,723 applications) (Source: Symbian research, see Notes to Editors for methodology)
• Since quarter-end the following products have begun commercial shipment:
  • 2G / 2.5G phones: BenQ P30 (tri-band GSM / GPRS), Nokia 6670 (tri-band GSM / GPRS), Nokia 9500 (tri-band GSM / EDGE / WiFi), and Sony Ericsson P910a for the Americas GSM markets
  • W-CDMA (3G phones): Motorola A1000, Nokia 6630
• At the end of the quarter, 38 phones and variants were in development by 10 Symbian OS licensees for all network technologies (Q3 2003, 31 phones and variants & 9 licensees) (see Notes to Editors for definitions)
  

Chief Executive’s Commentary

Operational performance

Symbian continues to progress in line with our expectations, with 3.7 million phones based on Symbian OS shipping in the third quarter to retailers and to more than 200 network operators, taking the annual run rate of Symbian OS unit shipments in the past 12 months to 11.45 million phones.

At the end of the quarter 38 Symbian OS phones and variants were under development by 10 Symbian OS licensees. These products are targeted at all types of network technologies (GSM / GPRS, CDMA, EDGE and W-CDMA), a wide range of geographical and language specific markets (Europe, North & Latin America, Japan, China), as well as customer segments such as enterprise, imaging and gaming.

Symbian is encouraged by the continuing commercial roll-out of 3G networks worldwide. Symbian OS licensees have now shipped ten 3G Symbian OS phones to network operators across Europe and Asia. In addition, we are delighted to report that Motorola has reached an agreement to supply NTT DoCoMo with Symbian OS-based 3G products whilst Nokia will supply Vodafone KK with its first 3G Symbian OS product.

Symbian OS Ecosystem

The Symbian Ecosystem continues to grow, as evidenced by the Symbian Expo – the smartphone show held in London in October. The Symbian Expo brought together companies from every segment of the Symbian OS smartphone market, with sponsorship from leading mobile industry companies – Vodafone, IBM, Motorola, Sony Ericsson, Texas Instruments and Carphone Warehouse. The show attracted more than 2,500 mobile industry professionals who attended keynote sessions and visited an exhibition show floor featuring more than 150 companies.

Symbian OS also continues to see growing support from application developers with more 3,254 commercial third party applications for Symbian OS phones now available (end Q3 2003 – 1,723 applications) (Source: Symbian research, see Notes to Editors for methodology).

Market

Attaining an actual run rate of 11.45m units over the last twelve months and achieving clear market leadership with an installed base of 19.2 million Symbian OS phones represents a significant achievement for Symbian. However these numbers remain modest in the context of the overall phone market.

Symbian’s objective is to maintain its market leadership as the market segment grows rapidly. Symbian is focusing on ensuring the adoption of Symbian OS for use as the platform for development of mid-tier, higher volume phones. Symbian is investing significantly to ensure Symbian OS is increasingly competitive with in-house operating systems currently used by Symbian OS licensees to build mid-tier phones. As part of this strategy, Symbian is working with partners to develop reference designs for Symbian OS phones. Reference designs pre-integrate Symbian OS with phone hardware, resulting in accelerated time to market and reduced development costs, enabling Symbian OS licensees to focus their development efforts on differentiating features and technologies rather than on low level integration. In October, Symbian and Intel announced a joint development agreement for a Symbian OS reference design for 3G phones.

Outlook

As in previous years, Symbian’s full year performance will be significantly influenced by sales of Symbian OS licensee phones made during the fourth quarter.

Unaudited Financial and Operational Highlights

	Q3 2004	Q2 2004	Q3 2003
Symbian OS Units	3.70m	2.59m	1.23m
Average Royalty / Unit *	US$5.5	US$5.3	US$5.7
Royalty GP% *	84%	85%	82%
Turnover (£m)	£m	£m	£m
Royalties *	11.3	7.7	4.4
Consulting services	4.3	5.3	4.5
Partnering & Other	0.7	0.7	0.5
	16.3	13.7	9.4
Average Permanent headcount	852	793	743
	End Q3 2004	End Q2 2004	End Q3 2003
Cash at hand & in bank	£43.8m	£9.5m **	£23.4m
	End Q3 2004	End Q2 2004	End Q3 2003
Number of Products in development	38	34	31
Number of Licensees with Products in development	10	10	9

* Royalties include Symbian OS & UIQ
** Cash at bank and in hand is prior to fund-raising announced 7th July 2004

These results do not constitute statutory accounts. They were prepared under the same accounting policies stated in the last audited accounts of the company, which have been filed with Companies House and may be obtained from the Company Secretary, Symbian Limited, 2-6 Boundary Row, Southwark, London, SE1 8HP, UK.

Notes to Editors

1. Definitions and additional information

Royalty revenue – Symbian receives a royalty on each phone based on Symbian OS shipped by licensees. From Symbian OS v7.0 onwards, the royalty has been set at $7.25 per unit for the first 2 million units shipped by a licensee and $5 per unit thereafter. Symbian also receives additional royalty revenue for devices shipping with the UIQ user interface supplied by Symbian’s wholly-owned subsidiary, UIQ Technology AB. Symbian outsources certain technologies when either i) there is already an industry standard developed by another party (e.g. Java from Sun); or ii) the technology is more efficiently provided by an outside supplier (e.g. WAP / web browsers; personal computer connectivity).

Consulting revenue – Symbian undertakes consultancy activities to assist its licensees implement Symbian OS in new handsets. Symbian receives revenue to cover costs (including full overhead recovery) and provide a commercial gross profit. The level of consulting revenue will fluctuate depending upon the volume of new engagements with licensees and the ability of licensees to develop new devices without the assistance of Symbian.

Partnering & Other revenue – Symbian derives a further revenue stream from training activities, partner activities (including the Symbian Platinum Partner Program) and trade shows (including the annual Symbian Exposium). These activities are designed to promote Symbian OS and are therefore priced only to enable cost recovery.

Products in development – Symbian defines a product in development on basis of the criteria below:

• Symbian OS licensee has a significant development team engaged on the project
• there is a clearly defined plan to take the product through development to shipping
• the product is anticipated to ship in commercial volumes
  

2. Number of Symbian OS applications

Symbian tracks the number of commercially available Symbian OS applications. This is done through surveying the applications offered for sale by a wide range of on-line, commercial distributors of Symbian OS applications.

To be included in the count of Symbian OS applications, an application must be offered for sale by a company, not an individual.

Applications which are offered for sale but which do not meet these criteria are regarded as "Shareware". Symbian maintains separate counts for "Shareware", “Freeware" and "Open Source" applications.

Only applications written for, or specifically shown to work on, Symbian OS phones are included in the Symbian OS application count. The count includes applications written using any of the wide variety of programming languages supported by Symbian OS, including C++, Java (pJava or MIDP), AppForge Crossfire and OPL.

The number of Symbian OS applications does NOT include Java MIDlets that have not been developed specifically for, or have not been explicitly validated as running on Symbian OS phones. It is therefore likely that there are many more Java MIDlets that will run on Symbian OS phones.

3. About Symbian

Symbian is a software licensing company that develops and licenses Symbian OS, the global open industry standard operating system for advanced, data-enabled mobile phones.

Symbian licenses Symbian OS to the world’s leading handset manufacturers. The following Symbian OS licensees have Symbian OS-based mobile phones in production and / or in development: Arima, BenQ, Fujitsu for NTT DoCoMo FOMA, LG, Lenovo, Motorola, Nokia, Panasonic, Sendo, Siemens, Samsung and Sony Ericsson. In 2003, over 6.67 million Symbian OS-based mobile phones were sold worldwide and more than 19 million have been sold to date.

Symbian has its headquarters in London, United Kingdom with offices in the United States, Europe, Israel, Australia and Asia (Bangalore, Beijing, Seoul and Tokyo).

Media Enquiries

Anatolie Papas Global PR Manager Symbian Ltd +44 207 154 1383 press@symbian.com

Chris Barrie Citigate Dewe Rogerson + 44 20 7638 9571