Motorola breaks Psion wireless deal

ITworld.com –

Motorola Inc. has pulled out of a partnership with Psion PLC for the development of wireless information devices, Psion announced Monday.

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 US$7 million and will pay another $1 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 Corp., L.M. Ericsson Telephone Co., and Matsushita Electric Industrial Co. Ltd.

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."

Motorola, based in Schaumburg, Illinois, can be contacted at 1-847-576-5000 or at http://www.mot.com. Psion, in London, can be reached at +44-20-7317-4100 or at http://www.psion.com/.

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