Vodafone signs Linux deal with U.S. firm Azingo

HELSINKI, Feb 5 (Reuters) - Vodafone VOD.L has picked U.S. software firm Azingo to develop Linux-based applications, the latest sign the world's largest wireless operator by sales is keeping Linux operating system LiMo as one of its key choices.

Privately held Azingo unveiled the deal on Thursday.

Vodafone, one of the founding members of mobile Linux foundation LiMo, has stressed the importance of cutting the number of different operating systems, raising some media speculation it could dump LiMo support.

“We are building their next-generation application strategy on that,” Azingo Chief Executive Mahesh Veerina said in an interview.

Guido Arnone, director of terminals technology at Vodafone, said in a statement: “We (want) to develop cutting-edge applications for our mobile phones based on the LiMo platform.”

The market for software platforms on cellphones is led by Nokia's NOK1V.HE Symbian operating system, but it has lost much ground over the last year to Apple Inc AAPL.O, Research in Motion RIMM.ORIM.TO and Microsoft Corp's MSFT.O Windows Mobile.

Computer operating system Linux has had little success in cellphones thus far, but its role is increasing with the LiMo platform and Google Inc GOOG.O using Linux to build its Android platform.

“Linux, including Android, will reach 500 million phone volume (units) in five years,” Veerina said, but noted it would be still only a fraction of phones sold over the period. The annual cellphone market is set to top 1 billion phones this year alone.

LiMo hopes to benefit from its focus on giving greater say over software development to telecoms operators. Members of the nonprofit foundation include such heavyweights as NTT DoCoMo 9437.T, Verizon VZ.N, France Telecom's Orange FTE.PA and SK Telecom 017670.KS.

“Operators are looking beyond voice revenues,” Veerina said.

Linux is the most popular type of free or so-called open source computer operating system which is available to the public to be used, revised and shared. Linux suppliers earn money selling improvements and technical services, and Linux competes directly with Microsoft, which charges for its Windows software and opposes freely sharing its code. (Reporting by Tarmo Virki, editing by Matthew Lewis)