The premature announcement two weeks ago of the Symbian joint venture between Psion and Ericsson, Motorola and Nokia was caused by a dramatic rise in Psion's share price immediately beforehand. Stock Exchange rules required a quick explanation from the handheld computer maker, and when it came it was indeed dramatic news.
Psion overcame several problems all at once with the venture (in which it holds 31 per cent, with the mobile phone makers owning 23 per cent each). Its sales had been affected by devices running Microsoft's Windows CE; it lacked sufficient corporate credibility; and Epoc, the 32-bit operating system used in its Series Five range, was not widely recognised for its advanced technology.
Symbian is a joint venture formed to develop wireless information devices for the mobile voice and data market. A remarkable feature of the project is that the telecomms partners have not collaborated in this way previously. Since each telecomms partner could have licensed Epoc separately from Psion, it appears that the venture must be seen as a strong desire to establish the operating system as the standard rather than Microsoft's Windows CE.
By adopting a common operating system, the mobile phone makers will be able to ensure easy interoperability and perhaps put pressure on other manufacturers to change to Epoc, or risk being marginalised.
The three mobile phone members own more than 70 per cent of the market between them. Each is believed to be contributing #57.5 million in cash, as well as providing software support, protocols and staff, to Symbian. Psion will take a charge, believed to be #3 million, to cover costs in setting up the venture. Symbian does not expect to make a profit until 2001.
It appears that Symbian will be mainly concerned with standards and software, but the manufacturing and marketing of products will be carried out by the other partners.
Other potential participants in Symbian must include Philips, previously seen as an enthusiastic supporter of Windows CE, but in practice pragmatic and agnostic.
3Com will probably find itself having to decide whether to follow the Symbian path to keep market share in its Palm Pilot handheld. Alcatel and Northern Telecom are also known to be working on smartphones. Symbian also expects to get network operators and content providers to join it.
The new venture directly evolved from Psion Software, and Colly Myers, who headed Psion's software arm, now runs Symbian. David Potter, Psion's founder and chairman, said that "Symbian aims to establish Psion's Epoc as an industry standard operating system for wireless information devices. We look forward to other global technology firms joining us as investors in Symbian."
Interoperability will be achieved by adopting the Wireless Application Protocol (WAP) - and the partners have been leading lights in the establishment of the WAP Forum, as well as the Bluetooth Special Interest Group which is concerned with short range (up to about 10 metres) wireless communication between devices. Java will also be incorporated.
Symbian's licensing costs are expected to be $10 for a data-centric device, and $5 for a voice-centric one. The first Symbian product - presumably a new version of Epoc - is expected in 1999 according to Ericsson and Nokia.
Psion says it will produce a new device, but the timing was not announced lest Psion Series 5 sales suffer as a result. Motorola is expected to use Epoc in a smartphone.
There is no exclusive requirement for these manufacturers to use Epoc for mobile devices, but it is likely that Windows CE will only be used where there is no wireless communication needed. Ericsson will use CE only for personal digital assistants without connectivity. Jan Ahrenbring, Ericsson's vice president of mobile communications, said that CE was not designed for smartphones.
Psion has gained serious attention in the corporate market with this link to the major mobile telecomms vendors. The deal gives Psion access to around 70 per cent of the mobile phone market, and establishes it as a major league player.
Psion came to the party under a financial cloud, since its #8 million profits for 1997 fell by 25 per cent on turnover of #142 million. It had been suffering financially as a result of Microsoft's push with CE, but the Symbian move has the potential to be a body blow to Microsoft, since it may well lock Microsoft out of this market.
Psion's technical strengths are in its design - especially the Epoc operating system, the keyboard, and the battery life. Its weaknesses have been in the communications area, and the cost of the add-ons needed for communications.
At the same time, Nokia and other mobile phone manufacturers have lacked good software design. Nokia's first Communicator had poor battery life, primitive word processing, and was heavy - but was strong on communication and integration. The new Communicator model announced in March has significantly improved the deficiencies, but its Geos operating system from Geoworks lags behind Epoc.
Psion was founded in 1980 by David Potter after an earlier career as an academic. Its first products were flight simulator games for PCs, which funded the development of the first Psion handheld Organiser. The company floated in 1988, but production problems have caused considerable share price oscillations. Psion was dubbed a one-product company, and the Organiser the electronic filofax of the 1990s, but the more serious problem was lack of expertise in communications integration.
Potter sees a great opportunity for a new kind of device - a combination of mobile computer, fax, Internet access device and telephone with good battery life and software. His vision is not a modest one: "I want to change the world all the time ... to take Psion on and develop it into a multibillion dollar enterprise and a serious player in the industry which has its origins in Europe."
In moving from standalone devices to communicating ones, it was necessary to be able to link to mainstream software. Psion has steadily increased its linkability, and can now transfer data to Lotus Notes, Novell Groupwise, Microsoft Office, Lotus Smartsuite, and Corel Wordperfect. The Psion contact manager is compatible with the principal contact managers, as is the scheduler, which works with Lotus Organizer and Microsoft Schedule Plus.
Mac users have not been forgotten, and major groups of users such as lawyers are catered for by add-on products to keep track of time and to transcribe speech. The main market is likely to be the road warriors who resent the weight, poor battery life, and limited integration of their notebooks.
The miniaturisation and good battery life to be offered through Symbian should result in a considerable advantage over notebook PCs for much mobile work - as well as freedom from hotel telephone systems and separate mobile telephones. Having the software in Rom is also seen to be a great advantage, since there is no boot-up delay.
The 8-bit and 16-bit versions of Epoc were proprietary, and developed for standalone machines. With the 32-bit version, data synchronisation and communications capabilities were designed in, as was flexibility to license the OS to OEMs for a variety of devices, without restriction as to screen size, keyboard, or pointers.
The first licensees are Geofox of Cambridge, UK and Philips Consumer Communications for its Ilium Accent (also known as the Synergy). Psion decided to use the Arm Risc processor which, it said, delivers the most power for the least amount of electricity - vital for battery life.
The mobile telephone market is already bigger than the PC market in terms of the number of handheld devices. The Ericsson/Nokia estimate for 2002 is 600 million users. The 1997 smartphone/communicator market was 473,000 according to IDC, and will rise to 5.9 million units in 2001.
Microsoft agrees that the market is going to show "explosive growth" over the next five years, but Harel Kodesh, Microsoft's general manager for consumer appliances, said it was a "dramatisation" to suggest that it would change the market greatly.
Psion claims Windows CE has a number of disadvantages in this market. Microsoft's Pocket Excel and Pocket Word are so remote from the full products as to be similar in name only, it maintains. CE is too big too be used in mobile phones, and would drain any battery very quickly. It is believed that Microsoft may be working on a slimmed-down version of CE, but has not said anything publicly so far.
Symbian is a considerable triumph for Psion, and should benefit Arm considerably too - Microsoft critics argue it has tied itself to power hungry processors because of its alliance with Intel, which are not really suitable for smartphones.
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