REFILE-UPDATE 1-Telefonica, other telcos to launch Linux phones

Computer operating system Linux has had little success in cellphones so far, but its role is increasing with the LiMo platform and Google using Linux to build its operating system which is called the Android software.

"Android is enjoying a huge amount of momentum at the moment in terms of operator commitment and manufacturer support," said CCS' Blaber. "However, LiMo remains a strong longer-term bet for a host of operators that seek an independent and service neutral platform."

For developers of mobile software, such as games makers, the variety of operating systems means higher costs as they need to produce a number of software versions for the different systems.

"We don't see the world becoming any less complex any time soon," said Greg Ballard, chief executive of Glu Mobile (GLUU.O), the world's third largest mobile gaming firm.

To counter Google's move into mobile space Nokia bought out other shareholders from Symbian Ltd last year and has pledged to develop the software on an open source basis similar to LiMo with a number companies on the non-profit board.

"Open source is rapidly changing the rules of the game in mobile," said Artturi Tarjanne, a partner at technology investment firm Nexit Ventures.

He said open source software was becoming recognised as the way to reach the mass markets for cheap handsets. (Editing by Valerie Lee and Sharon Lindores)