NTT DoCoMo Buys Equity Stake in Linux Developer

In a move that illustrates an emerging trend in the mobile market, Japanese wireless operator NTT DoCoMo (NYSE: DCM) yesterday announced a US$3 million investment in MontaVista Software, a U.S. developer of Linux software for telecommunications equipment and mobile handsets. DoCoMo will obtain an equity stake in the company.

Jupiter Research wireless analyst Michael Gartenberg told LinuxInsider that if this investment allows DoCoMo to bring more sophisticated handsets to market faster, then it's a good long-term move for the Japanese company.

"This investment is based on an expected return in the future more than any benefit in the short-term," Gartenberg said. "The challenge is to make Linux work beyond its core functionality in order to provide the value add to the handset."

Mobile Linux Trend?

The investment comes as no surprise to analysts, who witnessed the companies last month announce that MontaVista's Linux would be used as the operating system for three new 3G DoCoMo phones. Other recent Linux action in the wireless market includes PalmSource's adoption of a Linux operating system.

NEC (Nasdaq: NIPNY) and Panasonic also have rolled out Linux-based handsets for DoCoMo using MontaVista's Linux. Meanwhile, Symbian is the leader of the pack in the open-source mobile operating system race, with 60 percent of the market, according to IDC.

Analysts said manufacturers in the mobile handset market are discovering that they can use some of the Linux-based technologies as a core foundation for more sophisticated handsets.

"Linux won't save handset manufacturers the effort of building application functionality or the user interface," Gartenberg said, "but a lot of the core kernel functionality isn't something that needs to be replicated, and that's where the Linux kernel could be an advantage."

Still Debating

However, Craig Mathias, principal of the Farpoint Group, an advisory firm specializing in wireless communications and mobile computing, told LinuxInsider that it is yet unclear what impact Linux is ultimately going to have on mobile platforms.

"There's a general feeling that Linux is here to stay, that developers understand Linux and that it provides a very valid basis for a mobile operating platform," Mathias said. "But there is still some debate. It's not entirely clear what the client operating environment of the future looks like, or even if the client of the future will have a traditional operating system.

"For example, will the client of the future be a thin client or a fat client, a fat client being one that runs an operating system? There are support costs inherent with having a robust client and there are certainly hardware impacts and cost impacts as well," Mathias said.

Still, analysts agreed that Linux is a valid direction and expect more wireless operators to head that way as they seek to spend more research and development dollars on competitive applications instead of core functionality on the handset.