Part One This is a story about politics and intrigue in business. It’s about the formation and early years of Symbian – a company created by the industry's giants to create future mobile devices - and it reveals stories and plans that have never previously come to light. The issues raised here are alive today as ever. This piece looks at how Symbian was formed, and is an appetiser for the main course, the formative early years of the company.
Today, the Symbian system is used in 200 million phones. But the strangest thing about Symbian is that it almost never happened. After a few months on the market, the small company that created it had given it a virtual death sentence.
The promise of GSM
After a decade of planning, 1994 was the year that digital mobile phones really grabbed the popular imagination. New entrants such as Hutchison's Orange transformed the perception of the mobile from a tool for the business elite into a consumer product. In 1994, Psion was a small publicly traded company off the Edgware Road that turned over £41m, with a slim pre-tax profit of just £3m.
But the company was on the rebound. Psion’s small handheld personal computer, the Series 3, had scored a hit where much richer American companies had failed, and Psion’s revenue would treble over the next three years.
When Psion's engineers sat down to plan the long-term successor to its Series 3, they quickly decided that nothing existed to meet its goals of lower power, rich functionality and high reliability. It would have to write its own system software.
In November 1994, Colly Myers began work on designing the kernel of a 32-bit operating system which he felt could match the capabilities of the mainframes he was familiar with - but would also be able to cope with the extreme demands of low power mobile computing. This was Epoc. A small kernel team of three succeeded in booting the kernel for the first time in late summer 1995.
Psion's chief hardware engineer, Mark Gretton, recalls that discussions were already taking place about commercialising the system. Gretton had already carved out a legendary reputation as a hardware designer, now he was one of founder David Potter’s trusted lieutenants. Gretton had become as as adept at business landscape as he was creating chips.
“There was the realisation that we probably couldn’t justify the investment in a 32-bit system if we were the only customers,” Gretton recalls.
But where could Psion use the new system? And would it attempt to create new markets by itself, as it had traditionally done - or partner with others?
All of Psion's leadership were well aware of the move to digital communications taking place around them. At some point, mobile computer devices such as those produced by Psion would be communicating using the GSM standards... and phones would gradually acquire the functions of computers.
Five years earlier, Psion had acquired Dacom, which produced modems and connectivity dongles as the standards evolved. By the end of the 90s, the Dacom part of the Psion group would bring in 45 per cent of its revenue.
The story of the race to complete Epoc is told here. But we'll join it midway through, and hijack it, in 1996 - as an iceberg suddenly appears.
In the summer of 1996 Psion stunned the City by confirming that it was buying one of the great consumer electronics brands of the Eighties – Amstrad, for £230m. It was an audacious move – the purchase price was four times Psion’s turnover – and a puzzling one, too. Amstrad still retained the consumer electronics side famous for the PCW, and David Potter explained: “We are not buying Amstrad as perceived by its brand and name. Amstrad is in ashes. We are buying the phoenix in those ashes.” The interview in the Independent explained that Dancall was Psion’s true target.
Dancall was a Danish mobile company Amstrad had acquired for a snip - £3m - in late 1993. Sugar’s Amstrad had invested in a similar amount, and planned to turn it into a consumer brand. Dancall had a small amount of GSM IP and would make the first dual band (900Mhz/1800Mhz) GSM phone. But why pay £230m for a company worth a fraction of that?
Amstrad had around £80m in cash, and a successful business supplying Sky with satellite dishes. But the enlarged group would have handed Psion a lot of new headaches. It would involve a lot of duties such as running a PC company, Viglen, and closing down or spinning out the legacy electronics business, of which Psion had little experience. Psion was running a high margin R&D-led business. Nevertheless, Psion was doing due diligence, and soon it was just a formality.
A month later, to the relief of many shareholders and Psion staff, Potter walked away from the deal. Potter and Sugar couldn’t agree on a price. He’d made his intentions clear – that Psion's future belonged to mobile data communications. There were other ways of getting there, though. The question was how.