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I-mate's shares fell 18 per cent after it said that new handsets will launch later than planned, and that it will book exceptional charges of $6m (£2.9m) to $10m relating to the cancellation of its lower-end "Urban" range, bringing outsourced support services back in-house, and writing down historical stock.
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I-mate chief executive Jim Morrison says that the "Urban" range was ditched, at a cost of up to $3m, because it couldn't meet i-mate's new quality standards. The same stringent testing process has delayed two of the four "Ultimate" phones due out before Christmas. "When you have an Ultimate device, it has to be an ultimate device," says Mr Morrison. "It can't just have the name, it actually has to do it."
He cites "near-perfect" handover between wireless networks and faster response times as the resulting improvements to the business-focused devices, but says that the costs of the delays in lost potential sales are "hard to measure".
Neither Mr Morrison, nor the trading statement, offered any news on partnerships with mobile operators. Even Nokia, which re-merged its Enterprise division with the rest of its phone business less than two years after separating them, has found it difficult to sell devices directly to businesses. Corporate buyers still seem to prefer dealing with operators, who subsidise handsets and bundle them with call and service plans.
House broker Cazenove says i-mate's sales look slightly ahead of expectations, but still expects losses per share of 9c.
We advised selling these shares when they were 271p, and we're scarcely any more enthusiastic about them now. They rallied after the last results but are now back at year lows, and given renewed uncertainty about i-mate's ability to execute, still look high enough at 43p.
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-IC-2.1.3g-prod - 17/03/2010 18:13:09 - ben.wheeler
