In part it was due to the success of SM79, in part to the lack of power of available engines.
In substance, it was a political decision.
In the mid '30 the italian tecnology of inline engines was quite advanced, not only in record breaker engines, but even in reliable units.
In 1933 the SM 55X floatplanes were equipped with two 18 cylinders Isotta Fraschini Asso 750, capable of 800 hp each (other sources report 820 or 880 hp), and they flew from the artic to the equator without problems.
Two years later, a Cant Z-501, equipped with a 960 Hp version of the Isotta Fraschini Asso 750 broke the world distance record for floatplanes flying no-stop from the British Somaliland to Trieste (3,080 mile, 4957 km).
In 1936 became available the enlighted (516 kg, compared to the 634 kg of the Asso 750, or the 623.7 kg of the MerlinII/III) 12 cylinders Isotta Fraschini Asso XI RC.40, in different versions from 800 to 960 hp.
And the inverted-V Isotta Fraschini Delta RC35
an air cooled inline engine capable of 900hp.
They were all good units, that could be developed in the same way of the DB or Rolls Royce engines. But in the mid '30 the Regia Aeronautica decided that the radial engines, sturdier, easier to mantain and capable to work with less expensive low octane fuel, were better for military purposes.
The first effect of this decision was to stop the developement of inline engines, the second, to force constructors to acquire the licences of foreign engines
The fact is that italian engineers were not able to design powerful radial engines, cause they had never done it before. First than the decision of Regia Aeronautica, in Italy, radials were considered "poor" engines, good only for small touring aircraft.
For this, the Fiat A 59R was a licence builded Pratt Whitney Hornet, the Fiat A 74 RC 38 (860 hp), a licence builded Pratt Whitney Twin Wasp R. 1830/43-65, and the Piaggio P XI RC 40 (1050 hp), a licence builded Gnome et Rhône 14 N-48-89. They were all quite obsolete units, but Regia Aeronautica requires radials, and there were nothing better on sale.
At the 1939 trials to choose the new italian fighters, only an eccentric genius like Sergio Stefanutti introduced an aircraft equipped with a 960 hp Isotta Fraschini Asso XI RC.40, the Ambrosini SS-4.
After, italian engineers learned to do better, and the Piaggio P. XV RC60 was rated at 1700 hp, but, at that time, too many years were wasted.
The final effect was that, at the beginning of the war, the floatplanes Cant Z 501 (used for recognition and rescue), were equipped with a more powerful and reliable unit (a 960 hp Isotta Fraschini Asso XI RC.40) than their escort fighters, and the 2000 hp, 18 cylinders, 57 litres, Isotta Fraschini Asso 1000 became the engine of the MAS (the italian torpedo boats)
DogW