INTERVIEW: Psion's Asia-Pacific chief on economic turmoil and the future of handhelds

Navigating his way through a jumble of half-packed boxes, Charles Cousins, Regional Manager of Psion's Asia Pacific operations, looks like he's getting ready to ship out. Is his company about to join the casualty list of Asia's economic turmoil?

"Actually, we're moving into an office twice this size," explains Cousins, a 15-year veteran of the IT industry in Asia. "We're taking a medium to long-term view and we're optimistic for the future," he adds.

Globally, Psion is a David amongst Goliaths. Its Series 3 and Series 5 Personal Digital Assistants (PDAs) claim the third largest share of the world market - about 2.5 million units - trailing only 3Com, with its best-selling Palm Pilot, and Sharp, with its Zaurus model, which is popular in Japan.

In Asia, Psion - consisting of Cousins and 5 staff members - nibbles bravely but doggedly at one of the world's great frontiers for market expansion. The key to breaking into Asian markets, says Cousins, is to be present on the ground.

In the two and a half years since Psion rented the second floor of a small Chinese shop in Singapore, the company has worked hard to build brand awareness. It has also had to provide technical and marketing support for a network of distributors that has been pushing Psion products in Asia for a decade.

"We've been trying to build up our image on the back of our Psion organisers," says Cousins. "In the UK we've got an 85 per cent share of the personal organiser market. Psion is synonymous with organisers. In Asia, there was no natural market. We've had to do a lot of education.

"In the 1980s, distributors in Asia often got burned by unscrupulous suppliers in the Silicon Valley," Cousins adds. "Nowadays people in Asia don't want to deal with you if they can't meet you. Like the advert says, ' you can't fax a handshake'. You just have to be here."

But with just one regional manager and 5 local staff, Psion will have to shout loud and travel hard to get itself seen and heard in such a vast geographical zone.

Until now, the emphasis has been on core English-speaking markets in Australia, Hong Kong, Malaysia, New Zealand and Singapore. For a product that relies essentially on English literacy, however, language is an important barrier to growth.

Earlier this year, in a move designed to snatch a foothold in the Chinese speaking market, Psion launched MacChinese, a Chinese language application that operates on the company's Epoc16 and Epoc 32 operating system (OS) platforms.

Although MacChinese has helped Psion boost its sales in China, Cousins admits that the program is still no substitute for a Chinese language OS. MacChinese "simulates a Chinese system but it's slow and eats a lot of memory".

There are signs that Psion is serious about breaking the language barrier. Through its software spin-off Symbian (a joint venture between Psion, Nokia, Ericsson and Motorola), Psion already has a Japanese OS. To reinforce its position in the Japanese market, Psion says it will open its second Asia Pacific office in Japan later this year.

As for the Asian economic crisis, Cousins' optimism needs some tempering. A slow down in consumer spending and credit squeeze, combined with tough competition from systems running Windows CE have dented sales and orders in the region.

While extolling the virtues of running what he describes as a "mean, lean and fat-free operation" in Singapore, Cousins is guarded as to the real value of sales in the region, saying only that sales and revenue have grown.

Were it not for the crisis, he admits, "Asia would have represented around 5 to 10 per cent of total global sales." In fiscal 1997, Psion recorded total pre-tax profits of £11.43m.

Cousins also blames the 'temporary' slowdown in sales on what he calls the "fear, uncertainty and doubt" sown by Microsoft's marketing of Windows CE, which has left many Asian consumers wary of mobile systems that run on anything else.

"There is a propensity to follow the Microsoft path," he notes. "We've had to counter fears that Window CE will block out other operating systems."

Despite the challenges of economic crisis and the advent of a Windows CE, there appears to be little doubt that Psion's Asia Pacific operations will continue to grow. "We're going to expand up to 10 employees," announced Cousins.

In Asia, Psion has perhaps proved that a pocket-sized subsidiary with big ambitions can do well in a region still beset by economic gloom.