Psion's Symbian links with Sony to challenge Microsoft

Psion, the personal organiser maker, yesterday stepped up the pace of its drive to dominate the market for mobile phone software when it licensed Japanese electronics giant Sony to use its next-generation Symbian operating system.

Psion shares jumped by 15 per cent to 3,244p, putting life back into the stock, which has slid from £73 in recent weeks. Symbian, based on the EPOC system used in Psion's personal organisers, includes among its partners the three biggest mobile phone makers, Nokia, Ericsson and Motorola.

Colly Myers, Symbian's chief executive, said: "Sony is the first non-shareholder licencee, but I hope the first of many. Sony is the perfect licencee to help grow a mass market and proliferate the Symbian standard."

The move comes just a week after Microsoft unveiled the Pocket PC in partnership with Compaq Computer and Hewlett-Packard. The new handheld device uses a scaled down version of Windows as well as adapted versions of Microsoft applications, including Word and Internet Explorer.

In addition to the Symbian operating system, the link-up will also see Sony use an open multimedia application platform processing engine (OMAP) created by Texas Instruments (TI). The three aim to develop products for mobile users who want one device that can make phone calls, access the internet and run advanced multimedia, application content and services.

Katsumi Ihara, president of Sony's personal IT network company, said: "As a leader in consumer electronics, Sony is ideally positioned to offer compelling mobile solutions based on TI's OMAP and the Symbian platform. The upcoming broadband data services and the rising demand for ubiquitous, omni-functional mobile devices will require a powerful, power-thrifty processing engine and open operating system."

Sony's decision to embrace the Symbian alliance raises question marks for Palm, the market leader in handheld devices. Palm had licensed its less powerful 16-bit software to Sony and has also made a loose co-operation pact with Symbian. Analysts now believe Palm will need to decide quickly whether to work closely with Symbian to help fend off an expected Microsoft-led onslaught in the handheld market.

Although Psion shareholders have been burned recently, analysts were encouraged by the pact with Sony and TI.

"News flow should be good over the 18 months, and that will help the stock," said one analyst. "But it's a momentum stock and is likely to suffer when the market does."