"The spinoff will let the hardware division of our company focus on what they do best, while Corel can focus on its business and graphics applications," said spokesperson Carrie Bendzsa. The software maker's flagship products are WordPerfect and CorelDraw.
The company will reveal more specific plans for the new company when it releases first-quarter results March 26.
Corel is currently reviewing the business plan for the new subsidiary, formulating the management structure, and coming up with a name, according to Bendzsa. Corel vice president for software development Eid Eid will head the hardware subsidiary.
The hardware subsidiary is expected to employ 70 to 90 people.
Corel's hardware plans have met with delays in the past year. In November, the company predicted it would release an NC in the first quarter of 1997. Plans to develop a personal digital assistant were put on hold in December.
Corel's planned NC is a Java-based, diskless workstation with a built-in speaker and microphone. It will feature a Motorola MPC821 processor and 32MB of RAM and cost less than $1000.
The company expects its strength in video technology to help it compete in a crowded network computer market, according to Bendzsa.
The new hardware spinoff will take charge of products including CorelVideo, the company's digital compressing camera, and the personal digital assistant.
The spinoff will also produce software components that support the hardware.