EO, Inc. to Cease Operations
PARSIPPANY, N.J. — July 27, 1994 — AT&T reported today that EO, Inc., will cease operations Friday, July 29, 1994.
EO, 52 percent owned by AT&T, was unable to secure additional financing needed to bring to market its next-generation personal communicator.
"We are disappointed that EO must close," said Carl S. Ledbetter, president of AT&T Consumer Products and an EO board member. "But given the slow development of the personal communicator market generally, and the low acceptance of EO's products, AT&T believed it would not be prudent for AT&T to invest more in EO without additional financing from other investors. EO's Board of Directors voted to close EO after several months of efforts to find other external financing bore no fruit."
EO informed employees July 26, and will offer them a severance package and outplacement services. AT&T will honor warranties on all AT&T-branded units purchased by customers, and will maintain parts and repair services as required.
"AT&T believes the market for wireless personal communications has great potential," Ledbetter said, "and we are committed to participating in the equipment part of this market in the future. We will evaluate several options available to us before deciding on any new product directions. AT&T will also continue to participate in the services part of the market."
EO was formed in July 1991, and in April 1993 it brought to market the world's first personal communicators, the EO 440 and 880. AT&T was an original investor in EO, which is privately held, and became majority owner in August 1993. EO's closing will not have a significant effect on AT&T's 1994 earnings.
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