UPDATE 3-Chip firms form venture to boost Linux push

* ARM, Freescale, Samsung, ST-Ericsson, TI, IBM in jv

* Linux share of mobile market growing

* Could help Google’s Android, Nokia-Intel’s MeeGo -analyst

(Adds ARM CEO comments)

By Tarmo Virki, European Technology Correspondent

HELSINKI, June 3 (BestGrowthStock) – Electronic chip designer ARM
(ARM.L: ) has teamed up with five of its major partners to boost
the use of free Linux software on cellphones, challenging
Nokia’s (NOK1V.HE: ) Symbian and Microsoft (MSTF.O: ).

The chip companies said on Thursday they have set up a joint
venture, called Linaro, to cut duplicate development in using
numerous Linux versions and to speed up rollout of new phones —
hoping that would boost take-up of more advanced handsets.

That would enable them to ship more advanced chipsets and
increase the average sales prices of their platforms.

Versions of the Linux operating system — Google’s (GOOG.O: )
Android, operator-backed LiMo, MeeGo from Nokia (NOK1V.HE: ) and
Intel (INTC.O: ) and Palm’s webOS — have won increased share of
the mobile device market.

In the first quarter Linux phones’ total market share rose
to 14 percent from 8.5 percent a year ago, according to Gartner.

“Linux’s trajectory has been established. Its momentum is
growing,” ARM’s chief executive, Warren East, told Reuters,
adding he felt it was “inevitable” for Linux versions to have a
very strong position in mobile phones.

The largest Linux version, Android, has beaten Microsoft to
become the fourth most popular operating system on smartphones,
according to research firm Gartner, after Nokia’s Symbian, RIM
(RIMM.O: ) (RIM.TO: ) and Apple (AAPL.O: ). [ID:nLDE64I036]

“This is testament to the progress Linux and Android in
particular has achieved in an exceptionally short period,” CCS
Insight analyst Geoff Blaber said on Thursday.

“Linaro promises to simplify and accelerate Android and
MeeGo device development which will be a huge advantage to both
communities,” Blaber said.

Texas Instruments (TXN.N: ), Freescale [FSLSM.UL], IBM
(IBM.N: ), Samsung (005930.KS: ) and ST-Ericsson (STM.PA: )(ERICb.ST: )
are also taking stakes in Linaro, a not-for-profit joint
venture, alongside ARM.

“We expect more companies to join as we go forward,” ARM’s
East said.

Tom Lantzsch, Linaro’s executive officer, said in a
statement: “The dramatic growth of open-source software
development can now be seen in Internet-based, always-connected
mobile and consumer products.

Linux is the most popular type of open-source computer
operating system available to the public. Its direct rival on
PCs is Microsoft, which charges for its Windows software and
opposes freely sharing its code.

On cellphones, its bigger rival Symbian distributes its code
on an open-source basis for anyone to use for free, but its
success is tightly linked to Nokia, its key contributor.

Investment

(Editing by Hans Peters and Erica Billingham)

UPDATE 3-Chip firms form venture to boost Linux push