Apple Discontinues Development of Newton OS

CUPERTINO, California--Feb. 27, 1998--Apple Computer, Inc. today announced
it will discontinue further development of the Newton operating system and
Newton OS-based products, including the MessagePad 2100 and eMate 300.

"This decision is consistent with our strategy to focus all of our software
development resources on extending the Macintosh operating system," said
Steve Jobs, Apple's interim CEO. "To realize our ambitious plans we must
focus all of our efforts in one direction."

Apple is committed to affordable mobile computing, pioneered by the eMate,
and will be serving this market with Mac OS-based products beginning in
1999.

Apple will continue to market and sell its current inventory of MessagePad
2100 and eMate 300 computers, as well as to provide support for their
installed base of users. The Company is committed to working with its
customers and developers to ensure a smooth transition to Mac OS-based
products.

Apple Computer, Inc. ignited the personal computer revolution in the 1970s
with the Apple II, and reinvented the personal computer in the 1980s with
the Macintosh. Apple is now recommitted to its original mission - to bring
the best personal computing products and support to students, educators,
designers, scientists, engineers, businesspersons and consumers in over 140
countries around the world.

Newton Technology FAQ

What did you announce regarding Newton Technology, the MessagePad and eMate?

Consistent with Apple's strategy to focus all of our software development
resources on extending the Macintosh operating system, we announced we
would discontinue further development of the Newton operating system and
Newton OS-based products, including the MessagePad 2100 and eMate 300. We
will continue to market and sell our current inventory of MessagePad 2100
and eMate 300 products, as well as to provide support for our installed
base of users.

Why did you make this decision?

After an extensive analysis of the business, we concluded that the market
opportunity targeted by Newton was not aligned with our new business
strategy. We are committed to affordable mobile computing, pioneered by the
eMate, and will be serving this market with Mac OS-based products beginning
in 1999.

What is Apple's new business strategy?

To return to growth and sustained profitability, we have to create
outstanding Macintosh products for our core customers in design &
publishing, education and consumer markets. We believe we have made
significant progress in recent months with the most successful hardware
product launch in Apple's history-Power Macintosh G3; and the most
successful software product launch in Apple's history-Mac OS 8. Our
strategy today is to concentrate on products for our core markets and
aggressively market our unique brand and product strengths to our
customers.

What does this mean for Apple customers?

We will continue to market and sell our current inventory of eMate 300 and
MessagePad 2100 products, as well as to provide support for our installed
base of users. Additionally, we are committed to working with our customers
and developers to ensure a smooth transition to Mac OS-based products.

Why should customers stick with the Mac?

Today the Macintosh continues to be the standard by which other personal
computer technology is evaluated for elegance, ease-of-use and sheer power.
And, the lower total cost of ownership of the Macintosh makes it the
optimum choice for customers everywhere. Staying with Macintosh is the
right decision.

What will happen to your Newton licensing program?

We do not anticipate extending our current licensing program and are
working with our licensees on a transition strategy.

Will you continue to support Newton Developers' efforts?

We will continue to support our Newton Developers for 120 days via our
Newton Developer web pages at www.newton.apple.com/dev/index.html. After
that time, we will determine what level of support is needed.

Will you continue to manufacture Newton OS-based products?

We are giving our large customers a last buy opportunity if they place a
non-cancelable purchase order with us for 1,000 or more MessagePad 2100 or
eMate units within the next 30 days.

Where can I buy a MessagePad 2100 or eMate 300?

We will continue to sell Newton OS-based products through existing
channels, as well as direct through the Apple Store at www.apple.com.

Will you lower prices of your Newton OS-based products?

We have no current plans to lower the price of the eMate, however, we
continue to review pricing with all Apple products. We did reduce the price
of our MessagePad 2100s on Feb. 14, 1998. The current price of the
MessagePad 2100 is $799.00 at the Apple Store, www.apple.com.

Will you have a trade-in program for Newton OS-based products?

We do not have plans for a trade-in program at this time.

Will customers be able to buy products from Apple licensees?

No. The MessagePad products our licensees market are significantly
different, and there has never been a licensee product based on the eMate
300.

Will third-party accessories and software continue to be carried on the
Apple Price list?

We will continue to carry eMate accessories and software on our education
price list. Newton accessories will continue to be available, but
individual accessory availability will vary.

What happens to the data in my MessagePad or eMate?

You can synchronize your data in Newton OS-based products with the
applications on a Macintosh or Windows-based PC using Newton Connection
Utility (NCU). More information on NCU is available at
www.newton.apple.com/product_info/SW/ncu.html.

Will I continue to receive technical support for my eMate or MessagePad?

We will honor existing product warranty policies. In the U.S. this means
90-days support for software and one year for hardware.

Can I return my Newton OS-based product?

Our return policies vary: If you are an education customer, returns are
only accepted on an exception basis as outlined in your Apple policy. If
you purchased a Newton OS-based product direct through the Apple Store, a
30-day return policy applies. If you purchased a product from a retail
store or Apple Authorized Reseller, that store's individual return policy
applies.

Will you honor extended service agreements?

We will honor extended service agreements and will continue to offer
extended services agreements within the first year of product ownership.