There can be no denying that Acorn are in trouble. The 1998 Interim Report (which covers the period between 1st January and 30th June 1998) has been released recently, and makes grim reading for the Acorn user.
The Chairman's Report has two particularly interesting aspects. The first is an alteration of the structure of Acorn's 26% stake in ARM. Acorn have investigated returning the ARM stake to Acorn shareholders as a direct shareholding and found that it would incur a huge chargeable gain. It therefore seems likely that Acorn's stake in ARM will be sold and returned to the shareholders as cash.
The second interesting aspect is a somewhat ambiguous section relating to Acorn's 'non-ARM businesses'. The report, mentioning that these businesses have not reported an operating profit since 1993, despite many reorganisations, goes on to say that 'it may be appropriate in the medium term for some or all of these businesses to develop and be funded outside of the public markets, whether in the hands of their management or under third party ownership'.
This prospect is rather ominous: at best it means another of Acorn's interminable sequence of internal reorganisations; at worst it means the sale of the respective divisions to third parties. The report states that 'the Board will be exploring these possibilities' - if they see no further value in retaining these non-ARM businesses within Acorn, it could mean the end of Acorn as a personal computer supplier.
The unprofitable Workstations division would presumably be the first to face the axe. Many choices face Acorn as to its future. Stopping short of completely closing down the division, we could see its sale to a third-party or a management buy-out. If the division were to be retained within Acorn, it would seem likely that it would be absorbed into another division.
Should the Workstations division be sold to a third-party, there could still be a situation where the buyer closes it, selling its assets. Otherwise, we could reasonably expect that the product range would be continued and expanded to meet the needs of the market. Third-party ownership of the Workstations division could be an injection of competition into the Acorn market, which would push prices down. Unfortunately, this would probably destroy the friendly atmosphere that is currently so characteristic of the Acorn world. The market would obviously not be able to support a wide variety of clone manufacturers.
A management buy-out could be the best future for the Acorn product range. Problems would abound though - the Acorn market cannot be big enough to support a manufacturing business without the additional revenue that is currently generated by Acorn's other interests, and its share in ARM.
Either way it would seem that Acorn will be reinventing itself again, this time making a complete transition to technology consultancy. It appears that, after the Phoebe, the Acorn computers we buy may not be Acorn.
We await comment by Acorn's Vice President/Workstations, Chris Cox, on this issue.