Psion to press ahead with Chinese handhelds

Psion PLC plans to press ahead with the introduction of two handheld computers in Chinese-language markets despite moves to phase out its consumer hardware business.

The company plans to continue shipping the Psion 618C handheld, which is similar to the Psion Revo, but uses an operating system based on traditional Chinese characters. The 618C is being sold in Taiwan, and will start shipping in the next few weeks in Hong Kong, and in September in Malaysia.

Psion will also continue work on another version, the 618S, that uses the simplified Chinese characters common in mainland China and Singapore. It will roll out the product in those markets by the end of this year.

Less than one week after the news conference at which the 618C was unveiled for the Hong Kong market, Psion announced a round of 250 layoffs and said it will move away from producing consumer devices, and discontinue its Bluetooth wireless personal-area network products.

Psion will stick with its two other sources of revenue, it will keep building and selling handheld terminal devices for enterprises, ranging from sync-to-PC data collection devices to hand-helds that use an IEEE 802.11b wireless LAN, and will maintain its stake in software firm Symbian Ltd., which will continue to license the EPOC handheld operating system to other device makers.

Psion earlier this year announced it would stop further development on future versions of its devices. The company says it will continue selling the products as long as customers keep buying them, however.

Despite oversupply in the global handheld market, mainland China remains a promising market, said Charles Cousins, Psion's regional director for Asia-Pacific.

The PDA (personal digital assistant) market in China is full of opportunities, Cousins said in an interview Monday. The market is still growing and the leading players are homegrown vendors, he said. "The big guys aren't really there yet."

Psion decided to retreat from the consumer hardware business because it would be hard to compete against big consumer device vendors such as Sony Corp., Matsushita Electric Industrial Co. Ltd. and Nokia Corp. Those companies and others plan to use EPOC for their own hardware, Cousins said.

"If we were to continue the correct migration path (to online PDAs and smart phones) and try to put our devices on line, we would have ended up competing with our licensees," he said. Well-known Japanese brands such as Sony and Panasonic would be tough competition for handheld technology specialist Psion.

"(The market) is very volatile, which if you're big, doesn't matter, but if you're smaller, it makes it a lot harder. Those companies that have a very high dependence on PDA revenue streams all have quite a tough ride this year," Cousins said.

Meanwhile, Psion's Asian operations will remain in place and it will continue working with the same hardware resellers, Cousins said. Psion is also continuing to explore possible licensing deals for the Chinese versions of its PDA software, he said.

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