Is it true that Psion have pulled out of the mobile communications market

Asks howardpiercy
A. It is not true that they have pulled out of the mobile communications market entirely, but it has announced (in mid-July) that it has pulled out of the consumer market for PDAs (personal digital assistants). This, in effect, means that it will no longer produce its flagship product the Psion Organiser.

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Q. Why is this
A. There are many reasons for the demise of the Psion Organiser. These include:

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(a) Some industry commentators believe that Psion failed to keep up with the fast pace of the market, it didn’t change quick enough and so lost its hold of the market. In the first quarter of 2001 it held 8.9% of the mobile device market in Europe, down from 19.1% for the same period in 2000.

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(b) It is believed that Psion did not market itself well enough and it didn't cash in on its first-mover advantage (it invented the personal organiser) and lost out to competitors, namely US company, Palm. The company is also relatively unknown in two potentially massive markets - Japan and the US.

(c) The market for PDAs is oversubscribed - Psion faced heavy competition from Palm, Compaq, Hewlett Packard, Casio and Toshiba.

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(d) The Psion Organiser was not compatible enough with new technology - when Microsoft introduced its third version of Windows CE for the PocketPC - Psion failed to respond. In addition, the Organiser does not provide very good synchronisation with Microsofts' Outlook information manager. Psion was also expected to develop its existing technology but instead has decided not to upgrade its Revo and Series 5 lines.

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(e) It failed to obtain a secure backer for its second generation Organiser product, known as the Odin. It is believed that Motorola initially backed it but has since pulled out.

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(f) Psion has stated that it believes that the PDA will become defunct as mobile devices, which include telephony, become more popular. Indeed PocketPC palmtops with built-in telephony are now appearing on the market�- new products from BT Cellnet and Sagem have recently hit the market.

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Q. Will Palm take the majority of Psion's market share now that it has pulled out
A. Not according to the research group Canalys, its research states that Compaq - and its PDA known as the iPaq - currently has the largest share of the market. It experienced a growth of 1.018% in the first quarter of 2001, compared to a 61% growth from Palm and a 5% decline by Psion. And although Palm currently has the market share in the US, it is believed that iPaq is catching up, especially as it is the system now favoured by corporations.

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Q. How much money has Psion lost
A. Recent figures for the first half of 2001 reveal that revenue for Psion Digital (the division that produces the Organiser) was �36 million, down from �77 million.

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Q. Will it still be possible to purchase a Psion Organiser
A. Yes, Psion has stated that it will continue to support current machines and sell all remaining handhelds in its inventory.

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Q. Will the demise of the Psion organiser result in job losses
A. Yes, Psion has announced that it will cut 250 jobs from its digital division - sites at Milton Keynes, Greenford and central London will be affected.

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Q. When did the Psion Organiser launch
A. It was first launched in June 1984, and was the first of its kind to hit the market. Psion owners have been very loyal, and it is believed that some customer who purchased organisers in 1985 still have them and use them every day.

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By Karen Anderson

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