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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

January 17, 2008 at 1:31 PM

i-mate encounters roadblocks in the U.S.

In October, Dubai-based i-mate, which has major offices in Redmond, made a big splashiat a annual wireless conference in San Francisco. The conference marked the launch of high-end Microsoft Windows phones called Ultimate in the U.S.

I wrote in a story that i-mate was offering four new models that cost between $600 and $700, ran on Windows Mobile 6, and had the latest cutting-edge hardware. Another cool feature was that it came with XGA, which allows the phone to connect to a plasma screen and show phone images on a full screen.

But just a few months later, the company has encountered a serious roadblock.

On Tuesday, the company, which trades on the London stock exchange, issued a statement that one of its leading chip suppliers has failed to supply its manufacturers with the required volume of chips during this quarter.

In addition, it said a recent court ruling against the same chip supplier over IP infringements means that i-mate will not be able to sell some of its devices in the U.S.

The production issues put into question what the company will do. The company said in its release:

“These events will significantly disrupt its strategy for the U.S. market and, as a consequence, its Microsoft channel rollout. As a result there will be a material impact on sales in the final quarter of the current year and there are consequent costs that need to be written off. The company is evaluating the precise financial impact for this financial year and beyond.”

As a result, the company said, its board is reviewing strategic options at this time.

“Strategic options” often include putting the company up for sale, but the release did not say if that was an alternative to be considered.

Chief Executive Jim Morrison said: “This is hugely disappointing for the company and although we have devices which are not dependent on this chipset, it has a significant impact on the range of product we have to sell. We have no alternative but to review the strategic options for the company at this time.”

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