Psion Turns Away From Handheld Market As It RestructuresPsion Turns Away From Handheld Market As It Restructures

European mobile computing company Psion plc is leaving the handheld communications business to focus on local and wide area wireless networks. As a result of the restructuring, Psion will lay off about 250 employees.

Psion will no longer ship PDAs or other connectivity products based on the Bluetooth open wireless standard. Psion execs say weakening demand and tough economic conditions in Europe and the United States have contributed to slow sales of handheld products.

Psion had good mobile technology but was unable to effectively sell its products in the United States, says Ken Smiley, Giga Information Group senior analyst. "They had some good devices and a good operating system, but they didn't market it well," Smiley says. "They didn't do things that are necessary to go beyond having great technology. They needed to turn it into sales."

Psion's exit from the mobile-computing business raises questions about the future of Symbian Ltd., the wireless-device consortium formed by Psion along with Nokia, Motorola, and Ericsson. Psion had planned later this year to spin off Symbian, which creates wireless devices using its mobile-computing operating system, but now Symbian is probably dead too, Smiley says. "Nobody is bringing Symbian devices to the market other than Psion."

As Psion restructures, it will focus on LANs, a market filled with several companies that recognize the potential for cost savings, says Andrew Scott, an associate with Needham & Co. "Local area networks will be important because they are becoming more cost effective" and can transfer data at higher speeds.