Dear Newton Developers and Customers,

Regrettably, there has been a great deal of misinformation in the
newspapers of late regarding our Newton program. An uninformed outsider’s
view of the situation coupled with relentless doom-n-gloom reports in the
popular media could lead one to believe Apple was in the process of
“shutting-down” the Newton division. This is not the case.

I want to take this opportunity to provide you with an update on our continued
commitment to our products and to you, our developers and customers. We
are committed to complete marketing and sales efforts to launch our two
exciting products this quarter. Both of these products are in manufacturing
ramp and are on target to ship later this quarter. And we continue to
develop future products.

On the marketing front, to support the shipment of the MP2000 and the eMate
300 we are participating in a number of events over the next couple of
months including the following:

* Demo ’97 (Feb 10-12)
* HIMMS – Healthcare show (Feb 17-20)
* MacWorld Tokyo (Feb 19-21)
* FETC – Education Show (Feb 27- Mar 1)
* CEBIT – one of the biggest shows in Europe,
held in Hanover, Germany (March 16-23)

In addition to these events, eMate 300 ads are beginning to appear in education
focused publications such as Education Week, Electronic Learning and
Technology & Learning. We will be advertising the Message Pad 2000 between
April and June in both Windows and Mac publications, as well as general
business dailies. Other marketing activities for the eMate 300 and
MessagePad 2000 include conducting direct mail campaigns to the school
superintendents in March and the MessagePad installed base in April,
revamping our website to include more customer focused information on our
platform, new products, success stories from customers using our
technologies, etc., and utilizing our PR engine to regain momentum amongst
key industry press and analysts.

On the engineering and development front, we are continuing the internal
efforts on our product roadmap for future Newton-based products. There
are currently projects underway at all phases of the development cycle –
from early concept to full development These projects build upon the
strength of the MessagePad 2000 and eMate 300 and focus on future customer
needs and expectations in mobile computing.

In light of the recent reorganization of Apple Computer, the Newton Systems
Group remains intact under the direction of Jim Groff and myself. The
Newton Systems Group continues to be focused exclusively on this
marketplace and expect to be the leader in the category. The feedback that
we have received from analysts and others who have received “pre-release”
units has been extremely positive. The comparisons to WinCE devices has
been very favorable and we are anticipating exceptional response when we
begin shipping these two products later this quarter. Advance orders on
these products is running above expectations.

The Newton platform is alive and well, and I hope we can count on your
continued support.

Thank you for your support and commitment to the Newton platform, together
we will succeed.

Sandy Benett
Vice President, Newton Systems Group