Crumbling City confidence in the UK-based personal organiser manufacturer saw its shares drop 90p to 329.5p yesterday as profits for the year to December 31 1997 fell 29 per cent to £11.4 million.
Investors fear that Psion's days as the leader of the European hand-held computer market could be numbered if competition from other systems, including those based on Microsoft's Windows CE operating system, starts to hurt.
US-based hand-held manufacturers, like Hewlett Packard and 3Com, have so far played second fiddle to Psion on this side of the Atlantic. But 3Com in particular, the leader in the US market with its 1.6 million-shipping PalmPilot, may now fancy its chances in Europe following price cuts and news of new models.
Perhaps the main competition to both Psion and 3Com will come from Microsoft, which in March releases the first PalmPCs, based on Windows CE.
Psion chairman David Potter, warning yesterday of possible lean times, said that Microsoft has been confusing the market by coining new terms like HPC (standing for hand-held PC). He would not however rule out a possible partnership with the software giant, following development agreements with Dell and Philips.