Motorola's decision to pull out of an agreement with electronic equipment maker Psion to develop a "smart phone" is a blow to Irish chip design firm Parthus, analysts said yesterday.

The two companies had been working towards introducing a high-speed wireless digital assistant using Parthus's Infostream platform. Parthus had expected the first models to be produced by Motorola this year.

However, Motorola's decision to pull its involvement in the project will delay the introduction of a smart phone by Psion, which is now not expected to occur until 2002.

Mr Paul Phelan, an analyst with Davy's stockbrokers, said the decision by Motorola was a blow to Parthus.

However, he said it was difficult to judge the magnitude of the impact on Parthus due to the recent popularity of the infostream platform and the complicated nature of the Psion programme.

A Parthus spokesman said last night the company did not think it would be affected significantly by the Motorola decision. "Parthus is not dependent on any one technology," he added.

Shares in Parthus fell 0.85 per cent last night to close at $29.25 on the Nasdaq. Parthus shares closed at £1.97 sterling in London yesterday, a drop of 2.23 per cent.