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Amstrad CEO resigns over Sir Sugar's emailer obsession

Flawed device bringing down company

The CEO of Amstrad, Bob Watkins, has resigned after 25 years with the company, less than a week after it had unveiled yet another poor set of results. The reason is believed to be chief exec Sir Alan Sugar's obsession with the emailer device - a phone that lets you send emails.

The emailer has been a fantastic failure, cost the company millions and still shows no signs of taking off. Mr Watkins is believed to have become incensed with Sir Sugar's plans for expansion in the face of overwhelming evidence that it will not be a success. Commentators have accused Amstrad of becoming a one-product company.

An official announcement to the stock exchange today read: "Mr R.J.Watkins, chief executive of Amstrad plc, resigned from the Board on 1 October 2001. Sir Alan Sugar has taken on the role of Chief Executive in addition to his role as Chairman as of this date. Sir Alan would like to personally thank Bob for his contribution to Amstrad over the past 25 years and wish him success in the future." An Amstrad spokesman refused to expand on the announcement.

It looks as though Bob Watkins is just the latest victim of Sir Alan Sugar's blinkered emailer attitude. Since March 2000, he has tried tirelessly, and unsuccessfully, to sell the concept to everyone from journalists to politicians to the City - all have turned the device down.

Termed "the most important mass market electronic product since he kick-started Britain's personal computer market 15 years ago" by some idiot on the Mail on Sunday, the emailer emerged in a blaze of glory at the same venue as the cheap PCs that made Amstrad a household name 20 years ago.

It cost £79.99 and still does and within a week we concluded it was far too expensive. With even low usage, it would put £150 per month on your quarterly phone bill. The public agreed with our analysis and no one bought the thing.

But the more it has failed to take off, the more fanatical Sir Sugar has got about it. He vehemently denied technical problems in August that year, then when the subsidiary set up to deal with the emailer, Amserve, put up a £2.3 million loss, he took up most of the company's financial report explaining why the device was so wonderful.

The next set of results in February were even worse. Profit down 82 per cent from £8.2 million to £1.51 million. Again Sir Sugar waxed lyrical about how wonderful the emailer was - sales continued to be "encouraging". This time Amserve took a £3.9 million loss.

He managed to persuade the then home secretary Jack Straw to back it up. Mr Straw said it was the perfect example of how technology could be used to "improve the flow of information and intelligence in a bid to decrease crime" at a Neighbourhood Watch photo opportunity. It made no difference to sales.

The IT correspondent for The Independent then incurred Sir Sugar's wrath when he wrote, one year on from the launch, that the emailer had been a failure. Sir Sugar sent an email to all emailer owners, ranting about the piece and providing the journalist's email address. Unfortunately it backfired because many of the received emails concerned the terrible problems they were having with the device.

Now with the latest set of results, profit is down again. From £15.4 million to £6.2 million. Amserve increased its losses yet again to £5.2 million. And guess what? Sir Alan Sugar again took up most of the financial review ranting on about how successful the emailer was going to be.

Apparently, Amstrad is now ready for phase 4 of the emailer programme (how many phases do you need?). A new emailer with more features is to be released on the market this financial year.

It was this decision to continue sending good money after bad that it believed to have finally caused Bob Watkins to quit before the company was run into the ground over a daft dream.

To date, Amstrad has sold just 92,000 emailers. You are looking at this decade's Sinclair C5. &ref;

Related Link

Marketing magazine very unimpressed with the emailer
Independent even less impressed

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