‘Downsizing’ Psion to restructure

Psion has warned of declining sales and a ‘challenging down-sizing’ of the businesses that will include staff cuts of 20%.

Psion has staked its future on helping industrial and other corporate customers manage their mobile IT needs after its plan to dominate the market for handheld computers hit problems.

UK-based Psion conceded in its full-year financial results statement that January’s decision by Motorola to pull out of a high-profile shared project to develop ‘smart’ handsets combining computers with mobile phones had forced it to ‘re-evaluate’ its position in the market.

At the time, Psion said it would look for ways to pursue the former Motorola joint venture independently, but has now ruled this out. The company has instead announced that it will restructure Psion Computers and its other mobile personal computing-based operations into a new Psion Digital Solutions division.

It warned of declining sales, and a ‘challenging down-sizing’ of the businesses that will include staff cuts of 20%. The company posted a pre-tax loss for 2000 of £1.4m compared to a profit of £4.7m in 1999.

Conceding that its consumer operations face a tough future, Psion pinned its standard firmly to the mast of B2B mobile IT, and said its Psion Teklogix subsidiary would become its ‘key operating division’.

Canadian m-commerce specialist Teklogix was acquired by Psion for £250m last year and already accounts for 45% of the group’s income after being integrated with Psion’s existing enterprise operations.

Psion Teklogix helps companies to give employees mobile access to enterprise data via local or wide area networks (LAN/WAN). Its existing customers include Delphi Automotive, Honda, Dell and Compaq.

Amid the gloom surrounding its consumer operations, Psion was able to flag up a success for the Teklogix division with a contract to install a new wireless LAN for Volkswagen.

Psion Chairman David Potter said the focus on business-to-business offered the best chance for the company’s growth. ‘This is a market where Psion Teklogix is the number two player in the world in terms of profitability,’ he said.

Potter also re-affirmed Psion’s commitment to the Symbian next-generation mobile software technology it is developing in conjunction with some of the world’s leading handset manufacturers.

However, Potter admitted the timescale for the roll-out of Symbian products was uncertain.

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