BBCNews.com is reporting that Psion has announced that it is going to exit the handheld market. Psion is seeing its devices struggle to compete with rival machines running the Palm OS or Microsoft's Windows CE/Pocket PC operating system, and as a result they have restructured the company in what they describe as "a move up the value chain."

According to the reports the announcement effectively kills any plans to release a new Psion device with Bluetooth capabilities. David Levin, chief executive at Psion, says that "Bluetooth is late on the uptake and much smaller than anticipated." The market for Bluetooth devices has not grown as expected, but a Psion spokesperson says that the company may consider a return to the Bluetooth market if demand were to increase.

Psion maintains that the company will continue to support the current devices, and they also have plans to continue selling the current machines. A company spokesperson said that the company has no intention of leaving its consumers high and dry.