Microsoft legal row hammers Sendo

LOSSES at Sendo have hit more than £40m as Britain's only mobile phone manufacturer counts the cost of a bitter legal dispute with Microsoft.

The Birmingham company, which scrapped flotation plans two years ago, has been locked in a battle with the American software giant, a minority shareholder and former partner.

The two had agreed to develop a smart phone with a mini-computer and a camera built into the handset.

The deal fell apart in October 2002, with Sendo accusing Microsoft of fraud, breach of contract, and stealing its technology.

Sendo incurred £6m in legal expenses and other costs in the latest financial year. The case goes to court next February. A related dispute with Orange was settled in 2003.

Sendo later teamed up with Microsoft rivals Symbian and Nokia, but it took until June this year to launch the Sendo X - its first entry in the fast-growing smart phone category.

Sendo lost £41.3m on turnover of £56.1m in the year to last September.