Jobs 'working on Apple netbook'

Apple chief executive Steve Jobs, who is officially on sick leave, is still involved in the company and is working on what sounds like a netbook, according to a report in the Wall Street Journal.

The report quotes company insiders as saying he monitors new product plans including one for "a portable device that is smaller than its current laptop computers but bigger than the iPhone or iPod Touch".

Apple has been slow to enter the ultraportable market, which has been driven by the low cost as well as the small size of its products. The format is ostensibly ideal for Apple's excellent interface designers but the prices do not sit easily with the company's focus on premium products.

Jobs told analysts last October: "We don't know how to make a $500 computer that's not a piece of junk, and our DNA will not let us ship that."

But there have been repeated rumours that Apple is working on a design and it would not be the first time Jobs has done an apparent about-turn: he is widely linked with the decision to kill off the Newton handheld, the first pen-driven PDA to hit the market – and a pre-cursor of Apple's iPhone.

He could argue that neither the technology nor the market was ready for the Newton, though Palm took the idea and ran with it to create the successful Palm Pilot. He said last year that he was waiting to see how netbooks fare in the market, and sales are booming.

Jobs is expected to return to full-time work this summer, six months after taking leave to recover from what was first described as a hormonal imbalance; some feared a return of the cancer he had five years ago. Apple share prices tend to dip at any sign that his health is failing.