Psion Plc, the London-based palmtop computer maker and operating system developer, will give investors an anxious time over the next twelve months. The shares have raced ahead on prospects for its Symbian joint venture with LM Ericsson AB, Nokia Oy and Motorola Corp, but the vast revenue stream shareholders are expecting will not start to flow until 2000. In the meantime, Psion faces problems. It has already issued a warning that 1999 revenues will be hit by a sharp shift to embedded modems by laptop makers. Psion Computers is also forecast to see a slow first half to the year though upgrades to the operating system with EPOC 5 and 6 later this year will internet-enable the Series 5 and give a boost to sales. Psion claims the Series 5 maintained leadership in Europe. It says the competitive threat from Windows CE-based handheld computers faded as those products failed to establish a significant market presence. It acknowledges that Palm Pilot established wide market acceptance at the low end of the market, especially in North America. On the modem side, Psion Dacom plans to develop new products now the market for laptop boards is fading away. One bright spot for the company is the industrial side, which has expanded rapidly in the area of handheld appliances for commercial users. Psion is in a strong position in that it is sitting on a 54m pound cash pile. Chairman David Potter warns that there is a long way to go before Symbian is firmly established in the market. He expects products based on Symbian to ship in volume during 2000. A new investor in Symbian – rumored to be a large Japanese outfit – but the official line is that existing shareholders are unwilling to dilute their equity substantially and a new partner would only receive a small stake. By 2001 or 2002 Potter expects that flotation will be an option. The shares dipped slightly by 1.7% to 747 pence.
