Editing Acorn Computers (section)

===1998–1999: Element 14 and MSDW acquisition===
{{Further|Element 14 (company)}}
[[File:Acorn-Phoebe-Case.jpg|thumb|upright|left|The distinctive yellow case of the [[Acorn Phoebe]] ]]

During the first half of 1998 Acorn's management were heavily involved in the [[initial public offering]] of [[Arm (company)|ARM Holdings plc]] which raised £18 million for Acorn throughout 1998.<ref name="ac-prelim-results-for-1998">{{cite web|url=http://www.marutan.net/wikiref/msdw/19990427%20-%20Acorn%20audited%20results%20for%201998.pdf|title=Acorn Group PLC - Preliminary Announcement of Audited Results for the Year Ended 31 December 1998|website=marutan.net|url-status=dead|archive-url=https://web.archive.org/web/20110718122337/http://www.marutan.net/wikiref/msdw/19990427%20-%20Acorn%20audited%20results%20for%201998.pdf|archive-date=18 July 2011|access-date=14 January 2011}}</ref> In June 1998, [[Stan Boland]] took over as [[CEO]] of Acorn Computers from David Lee,<ref>{{cite web|url=https://groups.google.com/group/comp.sys.acorn.announce/msg/1d1c6c3e61f8b072?hl=en|title=Google Groups|website=groups.google.com}}</ref> initiating a review of Acorn's core business.<ref name="ac-prelim-results-for-1998" />

The company had losses of £9 million in the first nine months of the year<ref name="ac-prelim-results-for-1998" /> and in September 1998 the results of the review led to a significant restructuring of the company.{{r|restruct}} The Workstation division was to close,<ref name="pcw clark 1998" /> a 40% reduction in staff, and the Risc PC 2 code-named [[Phoebe (computer)|Phoebe]] that was nearing completion was cancelled.{{r|cancel2}} These actions allowed the company to reduce ongoing losses and focus on other activities.<ref name="ac-prelim-results-for-1998" /><ref name="e14-q&a" /> Acorn concentrated on development of digital TV [[set-top box]]es and high performance media centric [[Digital signal processing|DSP]] (silicon and software). It also produced a reference design for a [[Windows NT]] [[thin client]] using a [[Cirrus Logic]] [[system on a chip]].{{r|desk1|desk2|desk3}}

====Refocusing and discontinuation of activities====
To concentrate on these two activities Acorn hired a group of former [[STMicroelectronics]] silicon-design engineers and they formed the basis of a {{nowrap|£2 million}} silicon-design centre that Acorn set up in [[Bristol]].<ref name="ac-prelim-results-for-1998" /><ref>{{cite web |url = https://www.theregister.co.uk/1998/12/15/acorn_poaches_st_microelectronics_design/ |title = Acorn poaches ST Microelectronics design team |access-date = 2011-05-09 |last = Cullen |first = Drew |date = 1998-12-15 |work = The Register |quote = Acorn Group PLC is beefing up its digital TV business by poaching a seven strong chip design team from ST Microelectronics. ... setting up a £2 million chip research centre in Bristol. |url-status = live |archive-url = https://web.archive.org/web/20121003001904/http://www.theregister.co.uk/1998/12/15/acorn_poaches_st_microelectronics_design/ |archive-date = 3 October 2012}}</ref> They also started to dispose of some of their interests in the former workstation market and in January 1999 sold their 50% interest in Xemplar Education to Apple Computer.<ref>{{cite web|url=https://www.theregister.co.uk/1999/01/11/acorn_falls_off_education_tree/|title=Acorn falls off education tree|website=[[The Register]]|url-status = live|archive-url=https://web.archive.org/web/20121003002924/http://www.theregister.co.uk/1999/01/11/acorn_falls_off_education_tree/|archive-date=3 October 2012}}</ref><ref>{{Cite web|url=http://www.acorn.co.uk/acorn/news/press/xemplar.html|archive-url=https://web.archive.org/web/19990506202028/http://www.acorn.co.uk/acorn/news/press/xemplar.html|url-status=dead|archive-date=6 May 1999|title=Acorn : Acorn Sells Xemplar Stake|date=6 May 1999}}</ref>

Attempts were made to secure the rights to Acorn's desktop products including network computers and "various associated technologies", RISC OS, and the abandoned Phoebe workstation project by a consortium of Acorn market interests, and a memorandum of understanding was reportedly signed by both Stan Boland, representing Acorn, and former Acorn executive Peter Bondar, representing the consortium. However, Acorn pulled out of this tentative deal amidst accusations of attempts to sideline the consortium and to negotiate directly with its financial backers.<ref name="acornuser1998xmas">{{ cite magazine | url=https://archive.org/details/AcornUser202-Xmas98/page/n5/mode/1up | title=Phoenix burns after Acorn snub | magazine=Acorn User | date=Christmas 1998 | access-date=18 March 2022 | pages=6 }}</ref> It was reported that [[Stephen Streater]] of [[Eidos Interactive|Eidos]] may have made a {{nowrap|£0.5 million}} bid for the rights to the PC range,<ref name="pcw great oaks 1998">{{cite news |date=26 November 1998 |title=Great oaks from little Acorns? No |url=http://www.computeractive.co.uk/pcw/news/1924362/great-oaks-little-acorns-no |url-status=dead |archive-url=https://archive.today/20130420004311/http://www.computeractive.co.uk/pcw/news/1924362/great-oaks-little-acorns-no |archive-date=20 April 2013 |access-date=10 April 2012 |work=[[Personal Computer World]]}}</ref> but in October 1998 the distribution rights to the existing designs of machines were granted to [[Castle Technology]] to supply Acorn's dealer network.<ref name="e14-q&a" /><ref>{{cite web|url=https://www.theregister.co.uk/1998/10/16/acorn_builds_castles/|title=Acorn builds Castles in the Air|website=[[The Register]]|url-status = live|archive-url=https://web.archive.org/web/20170810091956/https://www.theregister.co.uk/1998/10/16/acorn_builds_castles/|archive-date=10 August 2017}}</ref><ref>{{cite press release|url=http://www.acorn.co.uk/acorn/news/press/castle.html |title=Acorn Computers Press Release – Acorn announces distribution deal with Castle Technology for RISC based products |url-status = dead|archive-url=https://web.archive.org/web/19990506180305/http://www.acorn.co.uk/acorn/news/press/castle.html |archive-date=6 May 1999}}</ref> In March 1999, [[RISCOS Ltd]] acquired a licence to develop and release [[RISC OS]].<ref>{{cite web|url=https://www.theregister.co.uk/1999/03/06/riscos_to_continue_os/|title=RISCOS to continue OS 4 development|website=theregister.co.uk|url-status = live|archive-url=https://web.archive.org/web/20121003003128/http://www.theregister.co.uk/1999/03/06/riscos_to_continue_os/|archive-date=3 October 2012}}</ref><ref>{{cite web|url=http://www.riscos.com/news/news_items/PR050399.htm|title=RISCOS Ltd Press Release 05/03/1999|website=riscos.com}}</ref>

{{Quote box
 |quote  = [T]he future of this company lies as a leading player in the digital TV system components&nbsp;...
 |source = Chief Executive, Stan Boland, in {{nowrap|September 1998}}<ref>{{cite web | url=http://www.acorn.com/acorn/news/restructure/ | title=Result of strategic review and implementation of fundamental restructuring programme | publisher=Element 14 | date=17 September 1998 | access-date=20 March 2012 | archive-url=https://web.archive.org/web/19990128155842/http://www.acorn.com/acorn/news/restructure/ | archive-date=28 January 1999}}</ref>
 |width  = 30%
 |align  = right
 |qalign = right
 |quoted = 1
}}

By January 1999, Acorn Computers Limited had renamed to '''Element 14 Limited''' (though still owned by Acorn Group plc), referring to the element [[silicon]] with atomic number 14; this change was to reflect the changed nature of the business and to distance itself from the education market that Acorn Computers was most known for.<ref name="e14-q&a" /><ref>{{cite news |first = Peter |last = Clarke |title = Acorn renamed, refocused as Element 14 |date = 1999-01-14 |work = [[EE Times]] |url = http://www.eetimes.com/electronics-news/4037045/Acorn-renamed-refocused-as-Element-14 |access-date = 2011-06-08 |quote = Acorn Computers Ltd. has changed its name to Element 14 Ltd. as part of its conversion from a computer designer and manufacturer to a developer of software and silicon intellectual property (IP). |url-status = dead |archive-url = https://web.archive.org/web/20121003155747/http://www.eetimes.com/electronics-news/4037045/Acorn-renamed-refocused-as-Element-14 |archive-date = 3 October 2012}}</ref> Other names had been considered by the company, but the domain name ''e-14.com'' had been registered before the official announcement.<ref>{{cite news | url=http://www.highbeam.com/doc/1G1-53518116.html | title=Acorn plans name change to reflect new ambitions | work=[[Computergram International]] | date=5 January 1999 | access-date=3 December 2013 |url-status = dead| archive-url=https://web.archive.org/web/20140610074204/http://www.highbeam.com/doc/1G1-53518116.html | archive-date=10 June 2014|url-access=subscription|via=[[HighBeam Research]]}}</ref>

====Acquisition and asset disposal====
Ultimately, the widely anticipated issues around releasing Acorn's 24% shareholding in ARM, with a need for "minimising the massive tax burden posed by disposing the holding",<ref name="acornuser199906_artistic">{{ cite magazine | url=https://archive.org/details/AcornUser208-Jun99/page/n5/mode/1up | title=Artistic Licence | magazine=Acorn User | date=June 1999 | access-date=18 March 2022 | pages=6 }}</ref> were resolved through "creative accounting courtesy of [[Morgan Stanley]]", with an offshore subsidiary of the bank acquiring Acorn, releasing the {{nowrap|£300 million}} shareholding "using the purchase as a tax loss and swapping Acorn investors' shares for ARM shares", and with the bank retaining an estimated {{nowrap|£40 million}} shareholding in ARM as a consequence.<ref name="acornuser199907_acornplc">{{ cite magazine | url=https://archive.org/details/AcornUser209-Jul99/page/n6/mode/1up | title=Acorn PLC | magazine=Acorn User | date=July 1999 | access-date=18 March 2022 | pages=7 }}</ref> As part of the process leading to the acquisition of Acorn by the Morgan Stanley subsidiary, MSDW Investment Holdings Limited, with the intention to "minimise the liabilities" of the group through the disposal of assets, Pace Micro Technology agreed to acquire Acorn's set-top box division for approximately £200,000,<ref name="ac-prelim-results-for-1998" /> also obtaining Acorn's rights and obligations with regard to [[RISC OS]].<ref name="register19990429">{{ cite news | url=https://www.theregister.com/1999/04/29/arm_denies_role_in_acorn/ | title=ARM denies role in Acorn dismemberment | work=[[The Register]] | date=24 April 1999 | access-date=31 January 2021 | last1=Cullen | first1=Drew }}</ref>

In conjunction with the acquisition of Acorn, an offer was extended to a company "owned by Stan Boland and certain senior management to purchase&nbsp;... the silicon and software design activity" for approximately £1&nbsp;million. This distinct company, known as "New Jam Inc" or "NewJam Inc", already founded in April 1999,<ref name="element14_accounts1999">{{ cite web | url=https://find-and-update.company-information.service.gov.uk/company/FC022173/filing-history/MTIzMDU0NjIyYWRpcXprY3g/document?format=pdf&download=0 | title=Element 14 Inc. | website=Companies House | access-date=23 December 2024 | pages=F-7 }}</ref> eventually acquired these assets for £620,539,<ref name="cabot2_accounts1998">{{ cite web | url=https://find-and-update.company-information.service.gov.uk/company/01403810/filing-history/OTgxODAzMjZhZGlxemtjeA/document?format=pdf&download=0 | title=Financial Statements for the Year Ended 31 December 1998 | website=Companies House | access-date=25 July 2021 }}</ref>{{rp|pages=24}} and effectively became the independent Element 14 venture,<ref name="ac-prelim-results-for-1998" /> acquiring the name from the former Acorn Computers Limited in October 1999.<ref name="element14_accounts1999"/> Acorn Computers then became known as '''Cabot 2 Limited'''.<ref name="cabot2">{{ cite web | url=https://find-and-update.company-information.service.gov.uk/company/01403810 | title=Cabot 2 Limited | website=Companies House | access-date=25 July 2021 }}</ref> A subsequent report put the sale price of this division of Acorn at £1.5&nbsp;million, offering the prescient observation that this new business would itself be acquired for "several million pounds" by an established company in the industry.<ref name="register19990429" /> This anticipated acquisition, involving [[Broadcom]], occurred the following year.<ref name="register20001014">{{ cite news | url=https://www.theregister.com/2000/10/14/broadcom_eats_element/ | title=Broadcom eats Element 14 | work=The Register | date=14 October 2000 | access-date=31 January 2021 | last1=Cullen | first1=Drew }}</ref>