Apple Computer Corp has finally announced it will spin off its Newton hand-held computer unit into an independent and autonomous subsidiary focusing on corporate mobile users. The new company will be called Newton Inc, providing the legal rights to that name aren’t already taken. It was created out of concern for Newton, not Apple, despite the fact that the success of the Message Pad handheld computer and the eMate rugged laptop could continue to provide the troubled computer maker with much-needed revenue. A spokesperson said that although Apple needs all the help it can get, Newton’s future is best served elsewhere, as it can’t realize its full potential within Apple. The group will develop products and license its technologies, including the Newton operating system, development tools and application programming interfaces. Apple, as part of its long-term strategy for education technology, will continue to support and market the eMate product line as a licensee of Newton, and the new firm is also free to develop and market competing products. Other Newton licensees include Schlumberger Ltd, Sharp Corp, Digital Ocean Inc and Harris Corp, while ARM Ltd, Digital Equipment Corp, Paragraph International Inc and Cirrus Logic Corp have contributed technology. Apple has been nosing around for outside investment in Newton for some time (CI No 3,139), since doubts about the company’s future had depressed the value of the product. The company is obviously hoping the distance between it and Newton will allow the unit to capitalize on the 29% growth the hand-held market enjoyed last year. The transaction should be complete by June 30, and Newton predicts it will achieve profitability in its first year. Although numbers weren’t divulged, Apple said that this quarter’s sales of Message Pad 2000 and eMate 300 are roughly three times that of the previous quarter. The new company is currently looking for a seasoned chief executive officer to work with chief operating officer Sandy Benett, former vice president of Newton Systems Group. As Newton grows, it will seek outside investment and possibly launch an initial public offering, but these shouldn’t happen for at least six months. The move will take 170 people off Apple’s Cupertino campus and struggling payroll. A small number of layoffs and new hirings are possible when Newton relocates nearby.
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