Shares in Psion Plc slumped almost 12% to 835 pence yesterday when the company issued a profit warning for the current year. The company warns that Psion Dacom, its datacommunications division, will be hit because embedded modems will be introduced by many notebook manufacturers earlier than expected. While Psion says it saw the switch to lower cost embedded modems coming and was trying to diversify its product range, it was taken by surprise by the speed of the change. Psion Dacom provides around 35% of group revenues and the PC card modems account for 75% of those sales. Psion said Dacom’s revenues for 1999 will be severely affected and this will have a significant effect on profits for 1999. Psion is now faced with a short-term problem as Symbian, its big hope for the future, will not be producing profits until 2001. For the moment, it is pinning its hopes on new products with higher margin, multi-function PC cards providing ISDN, Ethernet and GSM connectivity. Psion said that results for last year, due to be announced next month, will be in line with market expectations.
PSION HIT BY SWITCH TO EMBEDDED MODEMS IN NOTEBOOKS
