Apple Computer apparently is preparing to reenter the handheld market with a device that will combine the functionality of a cellphone along with a Palm-like personal digital assistant (PDA). Still smarting from its lack of success from Newton, Apple's handwriting recognition handheld computer that was unfortunately released ahead of its time, Steve Jobs, Founder, Chairman and CEO of Apple, publicly denies that Apple is considering the handheld market. He recently was quoted in an interview as saying, "We decided that between now and next year, the PDA is going to be subsumed by the telephone. We think the PDA is going away."

With Apple's new version of its OS X software operating system, many of its features are reported to be more usable in a handheld device than a desktop system. Apple's previous relationship with Pixo, the company that designed the iPod MP3 software, grants Apple a license to use the Pixo software for a second product, which is still unused. And the scuttlebutt regarding Apple's recent back room wrangling with Palm over the linking of Apple's new OS with Palm's devices is that Apple is making all of the demands as well as the rules. The cellphone PDA combo is reportedly being referred to by Apple employees as the iPhone.