I've been googling this more than I ever reasonably should. In case you're wondering, this is what I found in my own investigations (Sorry, this is long, and repeats alot that you already know).
So we know that Apple dumped
Synaptics, Inc., who traditionally provided them with trackpads, in early February (Synaptics shares tanked
on Feb. 9th on the news), as they had been developing their own trackpad in-house. We also know per nomaded
Around the middle of February 2005, it was noticed that FingerWorks Support was not returning email messages/support requests in a timely manner. Inquiries were made to the Official Forums, with no responses from anyone from FingerWorks.
So it looks like Apple acquired the fundamental patents, dumped Synaptics, and then because there were problems
(posted Feb. 9th) with their own trackpad using Fingerworks technology they hired Westerman and Elias full time to fix them. As what Mr. Peanut originally linked to
Apple paid them to use this technology in the iPod mini and the 4th Gen. Apple also used their technology in the powerbook scroll trackpad. Because of the recent problems with the powerbook trackpads, Apple just hired these two guys full time to design the next Apple trackpad.
Of course nomaded confirmed
that Dr. Westerman is now remotely employed by Apple.
Fingerworks was always looking
to be acquired (from 2002):
The company has recently started to sell four types of keypad commercially and dream of a contract with the likes of Dell, Gateway or IBM. Perhaps that's one reason why the University of Delaware which is a shareholder in the startup venture, has given its full support to the team from the start.
So it's no surprise they sold the patents when the opportunity arose. A U of D newsletter (that you've undoubtedly seen) states:
When the company was acquired this winter, the fundamental patents on MultiTouch input netted the University of Delaware more than $1 million. Collaborations between Westerman and Elias, however, are far from over. As Westerman puts it, their "symbiotic two-man hardware/software R&D partnership" continues to thrive today.
Also per Westerman's email
if we all cross our fingers, maybe the basic technology will not disappear forever
So we know Westerman and Elias are still working on something hardware/softwarish, but that only the basic technology may survive. On the other hand, Mr. Peanut's other post
indicates Westerman and Elias will be at Apple for two years or more, so maybe that's enough time to do more than just implement the basic technology.
What I would like to look into is what the "fundamental patents
on MultiTouch input" that Apple acquired consist of, as the content of the patents might reveal how Apple could use them? I personally don't expect any new iGesture pads or TouchStream LP-like products out from Apple, seems that would go beyond the "basic technology." I'll have to make do with my iGesture (Human Solution still has a few left, btw).