For a painfully long time, people have been asking David Potter, chairman of British computer maker Psion, "When are you going to die?" It's nothing personal, only that Potter's company--the maker of sleek hand-held computers, with annual sales of just $235 million--is sitting astride a market now being targeted by Bill Gates and giant Microsoft Corp., plus a dozen of the world's leading computer-hardware manufacturers. The battle became so intense earlier this year that Potter was forced to issue a warning about reduced profits, and Psion's stock price took a beating.
Seized upon as a David-vs.-Goliath tale by Britain's press, Potter's duel with Gates may well have a surprise ending. A South African-born physicist with a flair for brilliant chess moves, Potter last month finished stitching together an ingenious alliance with three of the world's telecommunications heavyweights: Sweden's Ericsson, Finland's Nokia and Motorola of the U.S. The three firms account for 70% of global sales of mobile telephones and have the kind of financial muscle to make even Bill Gates sit up and take notice.
The joint venture, called Symbian, will license Psion's software as the underlying brains behind a new generation of smart devices, ranging from mobile phones that receive e-mail, surf the Internet and even pay for transactions, to laptop computers that can go online automatically without anyone's having to open the carrying case. Yet the battle between Symbian and the Microsoft camp is not just about who will make next year's cool gadgets. It promises to determine who will control the next era of personal communications.
Oh, what a lovely war it will be! Market researcher Dataquest estimates that global sales of mobile phones, already astounding most analysts, will soar from 100 million handsets annually in 1997 to 360 million a year by 2002. Of that number, 15% to 20% are expected to be so-called smart phones that can handle data as well as voice traffic, a market that will rival today's volume of PC sales. "I foresee an absolutely huge future for the pretty amazing new stuff that's going to be added to the mobile phone," says Martin Heath, a telecommunications specialist for consultants KPMG in London. "There will be tremendous battles for who controls the value of this chain. Symbian has the advantage, but it's 10 yds. in a marathon, not 10 yards in the 100-yd. dash."
Whatever the distance ahead, the smart-phone era has already dawned. In Europe later this year, Nokia will begin selling its 9110 Communicator, a second-generation device about the size of a large mobile phone with a flip-top computer screen, capable of composing faxes, sending and reading e-mail and accessing the Internet. Alcatel, the French phone giant, is already marketing a phone called the One Touch Com, which has taken all the functions of a palm-size organizer, such as address book and scheduler, and installed them in a mobile handset small enough to slip in a shirt pocket.