Long time laptop graphics chip maker Neo Magic is bowing out of the PC graphics market. Neo Magic is following the lead of S3 by eliminating its PC chip business to focus on the emerging market in Internet appliances. The company is setting its sights on the development of technologies for MPEG-4 video, broadband wireless communications, and Internet system integration. "Our PC-centered view of the world has changed," said Neo Magic CEO Prakash Agarwal said, "We are now turning our capabilities in a new direction, where we believe there are multiple growth opportunities." Organization changes related to the company's new focus include the elimination of two departments and addition layoffs resulting in a 35 percent reduction in Neo Magic's workforce since last quarter.