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Psion Restructures, Shelves Bluetooth Efforts

Personal digital assistant (PDA) competition abroad got a bit slimmer Wednesday as London's Psion PLC said that it will be paring 250 workers from its digital division, and canning its Bluetooth wireless products along the way.

Psion, which cited poor sales for its handhelds and cell phones, expects to take a restructuring charge of £29 million or approximately $41 million in the process of focusing on enterprise markets through Psion Teklogix, which makes systems to help companies track their inventory using wireless handheld terminals, and in exploring new digital appliance options for Psion Digital.

Psion Digital will no longer create PDAs, but will continue to manufacture the company's line. The outfit will also continue development of its netBook range of products for the education and corporate markets. The division's remaining staff will focus on creating mobile networking products and solutions in different markets, but no specifics were offered.

The decision also means Psion will put to bed plans to launch a Bluetooth PDA and range of Bluetooth connectivity products for consumers, which were planned for the second half of 2001.

"Psion Teklogix, operating in profitable wireless enterprise markets, will show continued growth this year, despite cutbacks in capital spending in North America," David Levin, Psion's chief executive officer. "It is set to extend its position as our main operating division and we will be launching a new range of industrial products in September."

Through all of this, Psion's decision to focus on developing mobile solutions for the enterprise market seems wise given research firms' commonly-held belief that much money may be made there.

In a technology newsletter released Wednesday, Aberdeen Group provided the following analysis:

"Aberdeen finds that an important component to facilitating communication across the enterprise will be the deployment of an effective mobile computing solution. Although suppliers have yet to offer compelling end-to-end handheld solutions, demand remains high for such devices. However, over the next 12 to 24 months, Aberdeen believes more robust and flexible solutions will be delivered to the market. Until that time, many large organizations will continue to rely on a mix of outdated paper and telephony-based processes."

From Psion's statements and restructuring strategy, one may conclude that it is indeed shying away from the "professional consumer" as Aberdeen put it, and is opting for supplying whole businesses with their mobile computing goods.

While the method of how to market the hardware may be a question mark, the devices themselves are hardly the problem. Aberdeen said these, tablets, and two-way pagers represent the fastest growing segments of mobile computing with 8.9 million units shipped in 2000, representing $2.1 billion in sales for device suppliers.

"In the next several months, Communicators, a class of devices, which combine mobile phone and PDA functions into a single form factor, will begin to emerge as the fourth key segment to the mobile handheld marketplace," Aberdeen said.

Psion will announce its 2001 interim results in full on August 29.