Symbian’s coffers could run dry next year

LONDON—Smart-phone operating-system maker Symbian could run out of money as soon as next year, according to the company’s largest stakeholder Psion plc.
Psion issued the drastic news as part of its earnings release for the six months ended June 30. According to Psion, Symbian’s supervisory board is confident that new funding will become available and that an initial public offering is still planned for sometime in the future—however, the overall market situation for Symbian doesn’t look good.
The company’s operating system is primarily designed for smart phones, which are at the moment not a high priority for device manufacturers. In addition, the slow rollout of advanced network technology has left Symbian, along with a variety of other wireless companies, biding its time and holding its breath. Finally, most industry watchers agree smart phones will not be a huge seller in the future, appealing only to a small segment of the market.
“Inevitably, the market slowdown experienced in the cellular phone industry has diminished the short-term outlook for Symbian OS-based products,” Psion wrote in its earnings report. Carrier’s and manufacturer’s tight spending budgets have cut in to Symbian’s anticipated growth, and the company will need more money to continue operations, Psion said.
Nevertheless, additional funding will likely not be too much of a problem for Symbian. The company is a joint venture owned by Psion, L.M. Ericsson, Motorola Inc., Matsushita Communication Industrial Co. and Nokia Corp. In its release, Psion indicated it has the funds to finance Symbian. While most of these manufacturers are suffering through a serious economic downturn, their support for Symbian has historically been strong. Just three months ago, Nokia said that half of its third-generation mobile phones will use Symbian’s platform by 2004.
A Symbian spokesperson declined to comment on Psion’s release.
Psion, which just last month announced it is leaving the crowded personal digital assistant market, said its revenues for the first half of this year dropped 48 percent from the same period a year ago to $70.7 million. The company’s loses increased to $9.3 million. And perhaps Psion’s worst news is that it won’t issue a dividend, which it has consistently done since its IPO.