InPlay Technologies Inc. has sold off its Duraswitch business unit to Memtron Technologies Co. for $1.6 million in cash.

The move was made so Scottsdale-based InPlay (Nasdaq:NPLA) could focus more on its FinePoint products, an electronic pen for tablet personal computers. The deal closed Tuesday. “This transaction streamlines our operations and focuses our efforts on what we believe is a significant opportunity in the mobile computing and communications space with our FinePoint products,” said Steve Hanson, InPlay chairman and CEO, in a statement released by the company.

The company had struggled with its Duraswitch unit since its biggest customer filed for Chapter 11 bankruptcy. Duraswitch focuses on a number of patented electronic switching technologies for use in numerous fields, such as for aviation and medical clients.

Memtron, based in Frankenmuth, Mich., and a division of the Bellevue, Wash.-based Esterline Technologies, had been a licensee of the product since 2001 and will continue serving the roughly 30 other licensees, InPlay officials said.

The deal has the potential to earn InPlay an additional $800,000 if revenue milestones are reached through the end of 2009, officials said. The company’s stock was up 4 cents after the announcement to 19 cents a share.