Psion's release yesterday of the Series 3c and consumer-targeted Siena palmtops was the latest chapter in a remarkable British success story. PCDN talked to Psion UK managing director Peter Norman about the new products, the handheld sector competition, and the failed acquisition of Amstrad. PCDN: The consensus is that the new products are evolutionary rather than revolutionary. Is that fair? I think that's fair. In most fields, particularly computing, you need to build a mature platform of technologies. The 3c builds on the 3a that built on the Series 3 and models before that. A big criticism has been the lack of wireless communications in Psion's armoury. Was gaining the DanCall cellular communications technology the reason behind the Amstrad bid? We've had a GSM development project for quite some time and we are developing technologies. It was Amstrad who proposed the acquisition to us and we thought that DanCall could provide us with a competitive lead. Going the DanCall route would also have given us other things like telephones. But you don't have to buy the technology. We don't own LCD but we can use that technology. It was a diversion to look at a different way of doing it. It would have meant we would have more then doubled. We were not looking for an acquisition. They came to us. Amstrad had turned into something quite different to a consumer electronics company. The strategic synergy would have been with DanCall, although we also liked Viglen. How long before GSM becomes an integral part of a pocket computer? I think that goal will take a while to evolve. The technology is there but it will take a while to do it. We'll see products by the end of 1997 but it will take a while for it to take off. You have to have the software apps and that is where we are strong. You can already connect a GSM phone to the [Psion] machine [but] the integration would make it more convenient. Many analysts took shots at Psion for not having GSM in place now. Do you think they were getting their priorities out of order? Yes, I think they are. We have large-scale applications: TCP/IP, the ability to do home banking with Lloyds and Citibank. Their approach is slightly blinkered. They went overboard. They love new wacky features; those ideas rarely result in commercial products. You need to offer the development environment to bring in the mainstream corporate IT world and look at the management situation.. In Oval [Psion's new Basic-like tools] a programmer could build an application where it's easy for the manager to select the data he needs dock to a PC, update data and suck out results that they need to access. Is the business area Psion's chief area of focus? The business market is big but with the 3c you see the palmtop reaching out beyond. You can access your bank account and manipulate it directly, check your balance. It's bringing it down to my pocket. To do that my technology needs to work well with mainframes at the back end of banks which is why you need the software skills. The consumer market will evolve but it needs this technology to be the same underneath. The same technology is required but it's horses for courses. The business user tends to need more processing power, be able to hold more data, needs a bigger screen, better comms. The consumer probably needs to do less compute-intensive work so there's less processing power, probably has less data to store so there's less memory and a smaller screen. That's where the Siena is positioned so we can make it cheaper, which is the final thing the consumer wants. What do you think of recent efforts made by your rivals, such as US Robotics' Pilot? We've sold over one million Psion 3 units. None of these other people apart form Sharp have sold more than tenth of that. USR is in a honeymoon period. It's really a take-away product and really based on having a notebook or desktop. It's really not a good way of entering data. The Siena has four to eight times more memory and synchronises with Lotus Organiser, Microsoft Schedule+, not proprietary software. It's a very interesting product but ultimately limited. It's hit a button with the American psyche. We will watch and see what happens. Do you intend to grow by mergers and acquisitions, in order to compete with the bigger budgets of your rivals? We want to expand the company by selling more. Our rivals are not as focused as we are. Sony may be a big company but in some respects we are larger than any of our competition, with more research and development, more products, more years of expertise. The chairman of Hewlett-Packard doesn't have sleepless nights about how HP is doing in handhelds. Who do you have sleepless nights about? Microsoft's [forthcoming PDA OS] Windows CE? I don't have any sleepless nights. We'll have to see about Windows CE but I think it's unlikely to be particularly significant. Palmtops aren't easy; you have to work at them a long time. Microsoft is coming at it from a PC-oriented background. We're more focused on tighter code. There isn't a 1:1 overlap with Microsoft. We have real sales and real customers, not just talk.