Psion profit warning follows modem sales slump

Dacom's struggles impact on Psion's profit

Falling modem sales will hurt Psion PLC’s profit in 1999. Shares slumped 85p to 862.5p today on the news. The PDA maker blamed its profit warning on the decision of more notebook vendors to embed modems into their machines. "Psion Dacom's revenue for 1999 will be severely affected and have a significant impact on Psion's profit for 1999," the company says. So what happens if OEM revenues for Psion Dacom, Psion’s PC card division, and other PC card vendors melt away? Embeds can only make market conditions worse for Psion Dacom -- and other PC card vendors. Psion Dacom sales were the bright spot in the group’s patchy sales performance last year. Lifted by two enormous OEM contracts for IBM and Dell, PC card sales leaped 79 per cent to £25 million. Sales of PC Card modems boosted Psion’s first half profit by around five per cent. Psion’s PDA sales fell 11 per cent in the same period to £37 million. ®

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