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large organizations will continue to rely on a mix of outdated paper and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.