Motorola Inc.’s recent financial problems reverberated through the wireless industry and across the Atlantic, sending shares of Europe’s biggest personal digital assistant maker plummeting after Motorola pulled out of a development deal with the company.
Shares of European handheld computer developer Psion plc dropped 19 percent last week following the announcement. The move is part of Motorola’s efforts to streamline its operations, which involves cutting out numerous other projects and firing about 2,500 employees.
In a statement, Psion said it would shoulder the extra costs associated with Motorola’s departure and push on with the project-a communicator product based on Symbian’s operating platform, which Psion expects to ship in the first half of next year. However, Psion said Motorola’s departure would cost the company about $17.6 million in pre-tax profits this year.
The news comes at a bad time for Psion, which released a profit warning in October and, according to research and consulting firm Canalys.com, recently lost market share to competing PDA giant Palm Inc. Psion also said its recent acquisition of Teklogix International Inc. wasn’t generating as much revenue as the company had expected.
But the news may not be all grim. Motorola will refocus its operations on a multifunctional mobile smart phone based on the Symbian platform, Psion said. Motorola and Psion, along with L.M. Ericsson and Nokia Corp., are part of the Symbian alliance, which is aimed at pushing Symbian’s Epoc operating system. If the companies are successful, Psion could beat out Palm and Microsoft Corp. to become the dominant PDA developer.
