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Tuesday, 1 February, 2000, 17:43 GMT
The Psion factor
David Levin
David Levin leads Psion into the wireless future
By BBC News Online's Orla Ryan

Legend has it that Bill Gates once said that the biggest threat to Microsoft was UK tech company Psion.

Gates has doubtless revised that opinion after last year's anti-trust trial, but the popular myth is a tribute to the Psion achievement.

Set up in 1980 by chairman David Potter, it is now one of the UK tech sector's leading lights.

It is popularly known for its handheld computing products, notably the Psion organiser.
Psion factory workers
Psion is one of the UK tech sector's leading lights
But what excites analysts about Psion now is its joint venture with Nokia, Ericsson, Motorola and Matsushita, called Symbian.

Symbian aims to create an industry-standard software for the next generation of wireless products.

These products will combine mobile voice and computing technology. Pundits predict that two products will emerge: smartphones which are voice centric with information functions, and communicators which are information centric with voice functions.

Symbian's main challenger may be the world's largest software company, but chief executive David Levin told BBC News Online that Microsoft has reason to be worried.

Symbian's genesis

Symbian, originally Psion Software, has been designing software for mobile computing products for 16 years.

This is one of its key advantages over Microsoft's mobile internet-targeted CE software, Mr Levin said.

We will be launching a new business

David Levin

Symbian's Epoc software was created to work with small products. Microsoft faces the challenge of shrinking its software - which has grown out of a PC product - to handheld size.

"Symbian has a real edge over Microsoft in this arena. We have got the ball ... We are further ahead with the development. We are going to be coming out with the first products," he said.

Software will be available to licensees from the second quarter of this year - with the mobile phone software available in autumn - and the hardware is expected to follow about six months later.

Epoc's chances of becoming the global standard are improved by the fact that the Symbian alliance counts for some 70% of all handsets sold worldwide.

Symbian has a real edge over Microsoft

David Levin

Psion's mobile internet strategy as a whole was boosted by an agreement with Vodafone AirTouch to develop end-to-end mobile internet solutions.

Psion's fiction

But Microsoft isn't Psion's only competitor.

In recent months, Psion's share price has been hit by news of tie-ups between its Symbian partners and Palm Computing.

But Mr Levin claims this is due to investor and press misunderstanding as to what Symbian is about.

Symbian is building software for three types of products: communicators, phone pads and mobile phones. But the joint venture isn't building the final layer of software - the user interface - for the mobile phone, he explains.
Psion divisions
Psion Computers
Psion Dacom
Psion Enterprise Computing

Hence Palm's deal to build the user interface for the mobile phone was "perfectly within what Symbian was expecting," Levin said. Psion itself has a technology-sharing agreement with Palm.

Mr Levin added: "If Symbian fails, we know they will have covered themselves with alternative options.".

The Symbian future

If Symbian is successful, it will generate "huge value for its shareholders," Levin adds.

Symbian is expected to move into profit in the last months of 2001, with 2002 the year it becomes a profitable venture.

Already, Psion shareholders have reaped the benefits of a buoyant stock market. "All tech stocks have gone through this transformation," Levin said. "All tech stocks have suddenly become very fashionable. Psion has benefited no more and no less than any of the others."

The Psion family

Amidst the hype surrounding Symbian, it is easy to forget Psion's other divisions.

Indeed, the investment in Symbian sent Psion profits tumbling in the first half of 1999.

Other divisions are Psion Computers, Psion Dacom and Psion Enterprise Computing.

Psion Computers has seen an eventful year, with a new boss, Margaret Rice Jones, now on board charged with the job of "making convergence happen".

While poor computer sales hit the company hard in the first half of the year, it ended the century with a rich product portfolio.

Son of Psion

Psion is likely to spawn new divisions. When Mr Levin joined the company a year ago, he set up "a pool of creative talent to look for new ideas."

"We are working in a variety of areas. We will be launching a new business," he admitted.

Even if Psion doesn't spawn new businesses, it may acquire them.

Cash-rich Psion has an estimated 73m to spare and with two full-time acquisitions and mergers people on board, it says it is serious about finding companies to buy.

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See also:

09 Dec 99 | Business
The mobile internet race
08 Dec 99 | Business
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Microsoft targets Psion
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Internet goes wireless
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Psion profits collapse
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Psion and Palm establish links
03 Mar 99 | The Company File
Psion sounds Internet profits siren
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