updated 10:45 am EST, Wed December 10, 2008
Neonode today said that its core phone making division has filed for bankruptcy in its home country of Sweden. Best known for its N2 touchscreen phone, the company says it still has "great belief" in its technology but that the move is necessary to prevent the company from running out of money before it has time to grow. The parent company isn't directly affected but focuses only on developing and licensing the touchscreen technology at the root of its phones.
The company is famous for challenging Apple and has pitched the N2 as a more portable, lower-cost alternative to the iPhone with a swipe-based interface that lets users operate the phone one-handed. However, variants of the N2 have largely been limited to Europe and haven't been upgraded to compete with newer phone features, such as 3G and GPS. A lack of carrier deals has also often pushed customers to pay full price instead of receiving a service discount.