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What Apple Learned From The Newton

Special Report


It's never easy being a technology pioneer. Time and again, the companies that are first get burned. A new gizmo looks terrific in the lab and seems a sure winner at the product launch. But in the market--thud.

Nobody knows this better than Apple Computer Inc. A few years back, John Sculley, then Chairman, identified the coming convergence of computers, communications, and mass media as a huge opportunity. Companies that had the right goods and services for the Information Superhighway and enhanced wireless systems, said Sculley, would be the kingpins of high tech by decade's end--while the conventional personal-computer business would devolve into a boring commodity operation.

Apple's first such product, a personal digital assistant called Newton MessagePad, has suffered more slings and arrows than perhaps any other pioneering computer. Instead of accolades, Newton became a running joke on no less visible a platform than Gary Trudeau's Doonesbury comic strip. The main reason: Its much-vaunted ability to read handwriting is far from foolproof. And the machine lacked the anytime/anywhere communications promised by Sculley.

TUNED IN. But Sculley's departure under pressure and Newton's reception don't mean Apple is giving up on the concept. In fact, Newtons are selling. Its communications are being improved, and a new model due out early next year will have a larger screen. Apple also is working on other products for the new digital world. It has come up with a Mac TV that marries a multimedia Mac with a TV receiver.

Then there's software it's devising for the interactive-TV systems planned by cable-TV and phone companies. Called EZTV, the program provides on-screen navigation for the myriad programs and services that are promised. And on the user-friendly front, Apple is improving its Caspar voice-recognition technology, now standard on some Macintoshes. Conceivably, using a Mac TV with Caspar, you could bark "Vanna" from the couch and arrive at the desired station.

In the meantime, Sculley's prediction about the fun leaving the PC business seems to be coming true--at least for Apple. Macintosh sales stalled last spring, when the product line suddenly appeared overpriced and technically underwhelming in comparison with IBM-compatible PCs. Although Mac sales have begun rising thanks to a series of deep price cuts, profits remain depressed, and the future of the Mac is now clouded.

Next year will be critical: Macs based on the hot new IBM-Motorola PowerPC chip are due out. Their greater power could make more multimedia capabilities standard. But if they don't restore the Mac's edge over the IBM PC crowd, Apple will continue to feel severe pressure.

Given all that, it wouldn't be a surprise if Sculley's successor, Michael H. Spindler, deemphasized such pioneering efforts as Newton. Spindler isn't talking, but Apple's rivals already sense a drift. "Two years ago, I would have named Apple as one of our main competitors in this area, but now I'm afraid not," says Robert J. Frankenberg, general manager of Hewlett-Packard Co.'s Personal Information Products Group, which launched one of the company's forays into information appliances, the 100LX pocket PC.

While Newton so far has not met expectations, it's not the first time Apple has been down this road. The Macintosh itself was not a hit when it was introduced in 1984. Not until new software made it a tool for the emerging desktop publishing industry did the Mac become a winner, finally establishing Apple's reputation for easy-to-use technology. Apple can only hope that its new digital-age products meet the same fate.Bart Ziegler in New York, with Kathy Rebello in San Francisco

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