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Falling sales hit Psion's results

It'll be better in H2 - but will it really?

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Psion's habit of not updating its machines too frequently seems to be catching up with the company at last. Announcing its first half results yesterday, the company conceded that sales had been poor, and cited continuing start-up costs for Symbian as a further explanation for it doing no more than breaking even. Sales dropped 12 per cent to UKP64.2 million, and although the new Series 5mx won't have contributed to the numbers, the machine is a relatively minor refresh to the Series 5, and isn't anything like enough to turn the tide on its own. Psion claims that sales will pick up in the second half on the back of new products, but that is by no means certain. The company has been slow to integrate communications in its hand-helds, and even the 5mx is not all it might be. The company is putting a lot of faith in other new products, but it's not as yet clear there's a market for the ones on the near horizon, the netBook and the Series 7. The Series 7 is a larger format version of the 5, designed to appeal to the consumer Windows CE/subnotebook market. But this isn't a market Psion has much experience of, and it could turn out to be tough. The netBook is more ambitious still, and so far Psion has been having problems in getting its positioning message across. Its specification makes it look like a big brother for the Series 7 (which is a problem for the 7, because potential buyers tend to want a netBook instead), but Psion wants to sell it as a walk-about corporate network terminal. Psion thinks this market is about to take off big-time, but if it does, there will be plenty of rivals in the market (a wireless CE box plus the necessary networking expertise would be fairly convincing) relatively soon. Psion CEO David Levin did however slip in a few useful clues to the roll-out of Symbian EPOC devices from the big cellular companies. The next version of Symbian EPOC, ER6, is due in Q2 2000, he says, and Symbian itself is expected to move into monthly profit towards the end of 2001. Several companies, including Nokia, Ericsson and NTT DoCoMo, are known to be planning Symbian smartphones and communicators, but these dates indicate that none of them anticipate high sales levels for first generation products. Symbian won't start to make money until EPOC devices are selling in high volumes, so clearly the partners reckon on showing volume product in late 2000-early 2001, and ramping up production from there. ®

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