Sugar plans comeback with new videophone

Sir Alan Sugar will unveil his latest invention on Wednesday, a device aimed at catapulting Amstrad back into the big league of consumer electronics.

Sir Alan Sugar will unveil his latest invention on Wednesday, a device aimed at catapulting Amstrad back into the big league of consumer electronics.

The Amstrad chairman is understood to have signed a deal with the Scottish telecoms company Thus to launch a mass-market fixed-line videophone, named E3.

Both companies refused to comment, but the phone is likely to be sold at below cost, with Amstrad taking a cut of call revenues.

The E3 will be billed as the "son of the e-m@iler", the telephone and email device. Initially mocked by commentators when it was launched in March 2000, the e-m@iler is now making money for Amstrad. The company's latest accounts show that Amserve, the subsidiary that produces the e-m@iler, made a £1m profit last year compared to a £5.5m loss in 2002.

However, the e-m@iler has failed to realise Sir Alan's dream of transforming Amstrad back into an electronics giant. The company, 28.5 per cent controlled by Sir Alan, is worth just £170m.

Sources said Amstrad was preparing to market the E3 aggressively over Christmas and that it had signed sales agreements with high-street retailers.

The E3 will capitalise on the growing popularity of broadband, which allows voice and pictures to be sent down a phone line simultaneously.