Shares in Psion Plc hit a three-year low today after Europe's biggest handheld computer maker said it would shun the consumer market to focus on corporate and education sales and intellectual property.
The news followed a warning overnight from Compaq Computer Corp. which cut its sales and earnings forecasts for the second quarter to reflect an industry-wide slowdown, fierce price competition and a weakening European market.
Psion is restructuring its struggling digital division, which includes its handheld computer business, at a cost of £29 million and the loss of 250 jobs.
Psion shares, an under-performer in a sliding sector, fell 11.6 per cent to 62 3/4p in morning trade.
However, Chief Executive Mr David Levinhas said that Psion was still on track to make an operating profit in the second half of the current financial year.
He said the company would stop making new consumer handheld computers, although the current products would continue to sell.
Psion has also stopped developing Bluetooth-enabled products for the consumer market, he said.
Technology analysts have welcomed Psion's decision.