New mobile phone product lifts Parthus's share price

 

Irish silicon chip design company Parthus's share price rose sharply yesterday after it announced a new product that would allow the exact location of mobile phone users be pinpointed to within five metres.

The expected announcement was enthusiastically greeted by investors as the shares jumped 17 per cent on the London stock exchange to 272p, and hit a high of 285p at one point yesterday.

The most significant feature of Parthus's new NavStream GPS (Global Positioning System) platform, is that leading microprocessor firm ARM will incorporate it into its core technology. ARM's telecommunications chips are currently installed in 50 per cent of the world's mobile phones, and its market share is expected to grow to 70 per cent this year.

According to Merrion Stockbrokers' technology analyst, Mr John Coolican: "This is a massive endorsement of Parthus's technology. Not many chip makers out there can squeeze the (GPS) platform into a mobile phone."

The successful take-up of Parthus's new NavStream technology by mobile phone manufacturers will be boosted by recent US legislation which says it will become mandatory for all mobile phones to feature GPS after October 2001. This is in order to allow emergency services to quickly establish the location of people in distress.

Similar EU legislation has also been tabled, and is expected to become mandatory from January 2002.

According to Mr Coolican: "There is now a lot of expectation built into the Parthus share price. Investors have to ask themselves what level of earnings are being discounted at this price. The stock will also be subject to volatility with regard to competitor's product announcements."

Mr Brian Long, chief executive officer of Parthus, said there was a huge market for the product.

The product will also have lucrative commercial implications for advertisers wishing to target consumers in specific locations, or for content providers offering location-related mapping and services information.