Newton sees duller but more profitable future

Apple's decision to spin off its Newton business could mean a quieter, duller, yet more profitable future for the handheld computing unit.

The newly independent 170-staff firm said today it expects its business to focus on corporates and public sector, a sharp reversal of its origins as a mass market device. The firm said that close to a quarter of all sales go into healthcare and the most significant channels were VARs and system integrators. "It's a corporate product bought in very large volumes to save time and money in doing business," said Craig Sears-Black, VP of sales and marketing for the firm, which will trade under the Newton name, at least for the near future.

"The most important thing is we're setting up a new company entirely focused on Newton. We will have our own direction, which wasn't possible before when we had to make compromises to suit Apple and ride the ups and downs of its fortunes." Newton will for example be able to seek external funding, Sears-Black said.

Sears-Black added that the MessagePad 2000 was selling "exceptionally well" and that sales for its first quarter on the market were three times greater than for any other Newton product launch. However, he declined to provide hard numbers. "We're aiming for profitability in the first year and we're well on track to achieve that. We looked at every option very carefully, including a sale, but Apple decided this is a better option. We're like a startup with a huge revenue stream and a third-generation product."