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Can Newton rescue the pen market?

Fair warning, courtesy of Apple chairman John Sculley: Print journalists (like us), says Sculley, are blinded by an excessive fondness for keyboards and aren't able to grasp the merits of Apple's new pen-based Newton. "All they can figure out is how to trash it," he says. (The right-minded folks who do appreciate the Newton, says Sculley, include members of the television industry. Seems like Bill and Hillary aren't the only dubious characters in John's life these days.)

Sculley's dead right, of course. After a lifetime of hunt-and-peck typing, we just don't get the point of a device that relies exclusively on pen input. We're not clear why users should be forced to choose between keyboard and pen input. We"re still trying--without much success--to grok the difference between a $699 "personal digital assistant" with a 5"x3" screen and a 69 drugstore notepad.

But we do recognize that Apple accomplished several important things with last week's splashy Newton launch. Perhaps most importantly, Apple "event marketing" has finally whipped up some badly-needed consumer excitement about pen-based technology. The pen market was in real danger of becoming a technological Patagonia, an exotic place where nothing much actually happens. Now, thanks to Apple, pen technology gets covered on national TV news, retailers are convinced pen machines are hot products, and companies like Sharp, Panasonic, and BellSouth are jumping on the pen bandwagon. Even if Apple only succeeds in selling a few hundred thousand Newtons, at least the market has a little momentum.

At the same time, in a more subtle way, Apple has succeeded in drastically repositioning the pen platform. At the Newton rollout ceremony in Boston, Sculley and the Newton development organization managed to talk for more than an hour without once using terms like "pen-centric," "handwriting recognition," or "gestures." Newton--and presumably other PDA devices--have suddenly become communications tools. Newton isn't a "mobile computer" any more; now, it's become part of a technology family whose siblings include cellular telephones, fax machines, and pagers.

That's a really fascinating shift in focus. Never mind that the basic Newton doesn't include a modem, or that the fax and wireless features are still largely vaporware. Never mind that simple machine-to-machine infrared data transfer bombed out in front of the entire Newton audience. Apple has defined a clear communications-centric strategy for Newton, and it's likely that this new market definition will have a profound impact on the direction of future pen technology.

That's not entirely good news for software developers, however. Apple didn't even bother to trot out the usual software celebrities to vow undying support for the Newton platform. Instead, Apple chose to showcase its big communications and consumer electronics partners, who are likely to be the real winners if a large-scale Newton marketplace emerges. (Sculley claims there are some 1,500 developers at work on Newton applications, but we take that number with a grain of salt. So far, the only Newton software evangelist on Apple's payroll is a part-timer who also supports CD-ROM developers.) Like much of the "digital highway" and consumer multimedia markets, the Newton market will probably become an exclusive club open only to players who have immense capital resources and control of existing infrastructure.

To be sure, Apple hasn't completely frozen out third-party software developers. Great Plains has promised a "personal time & billing" application, Slate has a nice Day-Timer, and there are perhaps two dozen other small companies ready to ship Newton-based titles in the next six months. (What we won't see are many game developers, because Apple is deathly afraid that the Newton will start to look like a high-priced Game Boy.) Apple also stresses the fact that NewtonScript is an easy development environment, so the cost of creating new applications should be relatively low.

But communications platforms--like the telephone and the fax--typically don't offer broad opportunities for software entrepreneurs. The important technology ends up bundled in the hardware, or else is sold as part of the connectivity infrastructure. In fact, Apple itself has been reasonably candid about its economic model for the Newton, a model that assumes most of Apple's profits will come from the sale of ancillary services (such as the Newton Mail messaging service) and software, not hardware. As part of this plan, Apple has set up an internal PDA software publishing group called Starcore; Starcore has already announced six Newton titles of its own, to the predictable dismay of third-party developers.

Apple officials seem convinced that inadequate features and a software shortage are temporary problems that will be overcome as the product matures, just as they were for the Macintosh. Perhaps that's true (though it's curious that no one at Apple these days seems to remember the Apple III or the Lisa, two flawed platforms that didn't survive).

In many ways, the real problem with Newton is that it's a lame duck product: Sculley's departure as CEO leaves Newton without a high-level champion, just when Apple's finances, technology, employee morale, and market focus are all in trouble. Apple has figured out how to get a pen-based machine onto prime time TV. Now comes the tough part-- convincing millions of users that Newton is more than an executive toy. And so far we see no evidence that Apple has either the right strategy or enough passion left to launch another great computing platform.
COPYRIGHT 1993 Soft-letter
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Apple's Newton MessagePad
Date:Aug 10, 1993
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