Psion pulls off a communications coup

Psion pulls off a communications coupAlex Mayhew-Smith examines the recent Psion joint venture deal
As overnight transformations go, Psion has pulled off the big one. Its announcement of a joint venture with mobile phone giants Motorola, Ericsson and Nokia has precipitated the company to a position where it can dare to whisper a challenge to the mighty Microsoft.
Symbian – the joint company that will promote Psion’s EPOC operating platform – has enormous potential. It will create a whole new market that will have great attraction for the consumer.
There is no doubt about it, Psion has staged a coup. However, the company has lost its software division in the process. So what next for Psion, now reduced to just three operating divisions?
Psion’s central vision has remained consistent over the years – said Colly Myers in his last interview as Psion’s group managing director – to design and market innovative, fit-for-purpose products for emerging mobile digital markets.
“The advantage Symbian confers on Psion is to place the company at the heart of an emerging mass consumer market for a huge variety of wireless information devices,” said Myers, who is soon to take up his new role as Symbian’s CEO.
“In a purely financial sense, the creation of Symbian has an immediate benefit to Psion in that we will no longer have to fund either the on-going core development of EPOC or specific development for existing EPOC licensees. In 1997 this cost was in excess of ?6m and has risen significantly through the first half of 1998.” EPOCis Psion’s operating system developed specifically for handheld computers.
Pre-Symbian announcement, Psion undertook a breadth of activities stretching from basic operating system development to developing a variety of marketing channels. “As Psion and its markets have grown and diversified, we recognised the need to simplify business in order to gain focus on market-oriented ‘core competences’ and work in partnership with others to carry out other, non-core, activities,” said Myers.
“The creation of Symbian is a further step towards realising the long term objective of simplifying Psion’s business,” added Myers.
In creating Symbian, Psion has given up exclusive ownership of its EPOC software. The operating system was developed for its handheld organisers and will be promoted by Symbian as the industry standard for future wireless information devices with the marketing might of Ericsson, Nokia and Motorola behind them. The loss of its exclusive rights is outweighed by what it will gain through Symbian, argues Myers. Psion believes that EPOCwill now have the market weight needed to establish it as the standard.
“The advantages of the deal for Psion are overwhelming. With Nokia, Ericsson and Motorola as equity partners in Symbian, the EPOC technology gains the effective endorsement of the world’s top three mobile communications companies.”
The loss of EPOC to Symbian from Psion – and its potential to become a world wide operating standard to rival Windows CE – is seen as essential for EPOC’s development.
“Psion companies will have as much access to EPOC as before – but in addition, Psion will benefit hugely from having access to EPOC developments undertaken for other EPOClicensees,” he said.
“The fact that EPOCis likely to be quickly adopted as an industry standard… makes the whole Psion product range even more attractive,” claimed Myers.
The emergence of Symbian has the potential to create a new market for a whole generation of devices. As the mass consumer market for wireless information devices becomes established, a variety of new products will emerge. This will offer “the customer a diverse choice of products with different levels and types of functionality,” said Myers.
The key to these new gizmos will be their communications potential. “The projected path of [EPOC] technology development suggests that a majority of products will be communication-enabled,” says Myers. “It is clear that the advent of Symbian is likely to help Psion accelerate its development of ‘communications-enabled’ products.”
One thing can be said for certain – the devices are on their way. Perhaps, even before the year 2000.

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