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PSION CLAIMS IT’S “COMFORTABLE” OVER SHORTAGE OF MACHINES

As if taking on the full force of Bill Gates’ Microsoft Corp wasn’t enough on its own, Psion Plc, the UK’s handheld computer innovator with an estimated 25% share of the world market, has now blundered by running out of stock right after launching its flagship product. Handheld computers are the latest ‘must have’ accessory for the techno-minded executive. The latest units are approaching the power and usability of laptop personal computers, and estimates put the US market alone at five million units by 2002. Psion is currently second only to Sharp Corp in this area, having built up a reputation for reliability and leading edge innovation. But the potential size of the market attracted Microsoft Corp to the party. No less than seven electronics manufacturing companies have pledged allegiance to Microsoft’s cut down version of Windows 95 designed for handhelds, Windows CE. The likes of Hewlett-Packard Co and Compaq Computer Corp are currently producing machines based exclusively on Windows CE to compete directly with Psion’s own EPOC/32 operating system. But Windows CE has had its teething problems, and poor reviews and incredibly high levels of returns have slowed sales. In contrast, Psion’s latest product, the Series 5 handheld computer running EPOC/32, was launched in June this year, since when it has been glowingly received by reviewers. But having won over the critics, Psion ran out of stock right after shipping the last review unit. Retailers are clamoring for the machines, with customers being put onto waiting lists with no idea of when the product will arrive. Meanwhile, sitting in the display cabinets right underneath the cash-rich gaze of impatient customers are the latest Windows CE-based handhelds. And to make matters worse, launch of the Series 5 has crippled sales of Psion’s older Series 3c machine, creating a hole in revenues so large that a warning had to be issued to investors. The company has blamed any number of factors for the temporary embarrassment, including demand in excess of initial market research estimates, and faulty parts from suppliers. But for a company that’s been in this business for as long as Psion has, these kind of excuses just don’t wash. And every day that passes sees Psion passing customers directly to Microsoft, with what chance of ever clawing them back again? Psion insists that the delays are all part of its marketing strategy to ship products which are robust and fully tested. A spokesperson for the company even had the audacity to say that being able to sell everything you can make was a comfortable position for Psion to be in. With Psion’s interim results due to be announced on September 4th and the shares already down 44% since the Series 5 was launched, one wonders if the production managers and finance director are feeling as comfortable as the public relations department.

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CBR Staff Writer

CBR Online legacy content.