Motorola breaks Psion wireless deal

The announcement comes two days short of a year after the two companies embarked on their joint mission to create hand-held devices with integrated voice and data capabilities. Motorola's bowing out is consistent with the company's recently announced moves to streamline its portfolio and focus on its core strengths, Psion said in a news release.

In accordance with the terms of the termination agreement, Motorola will waive repayment by Psion of $US7 million and will pay another $US1 million. In addition, Psion will retain certain intellectual property rights contributed by Motorola. In return Motorola continues to have access to certain rights regarding Psion's Halla processor.

Psion, maker of PDAs (personal digital assistants), said the discontinuation of the partnership will result in a reduction in 2001 pre-tax profits of about 12 million pounds ($17.5 million).

Motorola will refocus on developing a multifunctional smart phone, to be launched in 2002. The phone will use the EPOC operating system developed by Symbian Ltd., which is jointly owned by Motorola, Psion, Nokia, Ericsson, and Matsushita Electric Industrial.

Psion said it will continue work on a communicator product based on Symbian's Quartz platform, which was developed in part with Motorola. However, Psion said it is "evaluating a range of options for its completion in the light of the significant additional development cost and a launch in the first half of 2002."

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