Will a troubled Apple realize what it’s got with Newton?

Apple finally and officially launched the Newton technology line this month with its new MessagePad personal digital assistant. Though the event itself was somewhat dampened by a silly theme — a video of “Paul Revere” riding through the streets of Boston shouting, “Newton is coming! Newton is coming!” — every Newton available for sale at Macworld Expo, where the launch was held, sold out.

After an auspicious beginning, what now remains to be seen is whether Apple realizes Newton might be its last good opportunity to truly reinvent itself — which it desperately needs to do — and do it right this time. Newton will be a bellwether of how Apple views its future as it further consolidates its operations and continues its executive transition from John Sculley to Michael Spindler.

Babies and bathwater. Will the company continue to take risks on new, unproven technologies — such as Newton, which Sculley championed — that beckon to customers beyond Apple’s core Macintosh constituency? Or will it choose what appears to be the safer route, focusing its resources on the transition from Macintosh to its upcoming PowerPC desktop machines, and splitting off Newton — or even the entire Personal Interactive Electronics group — into a separate company, as some have speculated?

These are the tenor of questions and rumors flying around Silicon Valley today. As Apple continues to focus on short-term return to profitability, the potential is certainly there to throw the baby out with the bathwater. That would be a pity, especially considering the baby in question.

NEWTON TECHNOLOGY: BEYOND THE MESSAGEPAD

Probably more than any other major technology initiative within Apple today, Newton shows great promise in a fast-approaching future where communications capabilities become ubiquitous.

But as many have bemoaned over the years, Apple has never been good at exploiting its formidable technological advantage in the marketplace. Macintosh succeeded largely on the zealotry of those who bought it, not because anyone at Apple necessarily knew how to sell it. (It was Microsoft, you may recall, that took to the computer stores demonstrating the benefits of a graphical user interface when it released Windows 3.0; Apple’s best shot was the abominable “Test Drive a Mac.”) It was only because it took competitors a while to figure out how to match the Mac’s capabilities that Apple was able to stay in the game.

Good PR, bad marketing. If Apple is smart and keeps Newton within the company, the next question is how it will market what is essentially the first product of its kind in an already contentious and competitive market. Unlike the Macintosh, which was cloaked in secrecy up until the day it was ready to be shipped, Apple talked about Newton — and publicly demonstrated it — long before it was done. While this may have been a good public relations strategy, it may prove to have been a lousy marketing one.

Virtually every company with clout today is working on such devices and/or capabilities, whether on its own steam or within an alliance. And every one of them, including Sharp, the Wizard-maker that licensed Newton for its own Expert Pad product, and Newton licensees Motorola, Panasonic and Siemens, know how to make consumer products and have had a good, long time to make sure they matched the MessagePad’s features. Many will ship competing products within six months.

A confusing situation. The desire to set standards via alliance-building has also led to a difficult and conflicted situation for both Apple and its spinoff General Magic. Though Magic’s Telescript communications language is the company’s core product, the one that can (and will and should, if it’s up to snuff) be built into competitors’ devices, its MagicCap system software is a direct competitor to Newton, even though Apple is a member of the Magic alliance (see Vol. 2, No. 10/11, p. 3). For example, Apple says that Telescript will be built into Newton devices as soon as it is ready. Formidable corporate opponents such as AT&T, Motorola and Sony are also building MagicCap-based hardware.

MICROSOFT’S WINPAD, NOW ATWORK, IS ON THE WAY

Now let’s add fear to confusion and conflict: Microsoft, which is neither a Newton licensee nor a General Magic alliance member, also claims ubiquity as its goal with its newly announced AtWork communications architecture. Though no formal announcement has been made about specific products, Microsoft in June announced that AtWork (formerly known by the code name “WinPad”) would indeed be the operating system it would license for “digital assistant”-type communication devices.

With a phalanx of more than 70 technology partners including the ubiquitous AT&T, Canon, Casio (also entering the market with Tandy; see below), Northern Telecom, Intel, Philips, Toshiba and Xerox, Microsoft has taken General Magic’s theme a step further; it is developing software that will make virtually every device first in the office and eventually in the home capable of sending and receiving messages.

Compaq’s “mobile companion.” During the AtWork announcement in New York, Compaq showed a prototype of a “mobile companion” that used the AtWork architecture. (Compaq would not return repeated phone calls regarding the prototype.) At a recent analyst meeting, Microsoft said that products using AtWork would be shipped within six months.

Casio and Tandy are also quite close to shipping their Zoomer device (which they call a PIP, for Personal Interactive Processor), though their technology does not have the ability to communicate embedded as deeply in its genes, so to speak, as does Newton’s MessagePad. And Sun Microsystems is reportedly working on its own PDA via a wholly owned subsidiary called First Person.

THE PICTURE IS BIGGER THAN PDAS

In essence, Apple’s launch of the Newton MessagePad signals the beginning of a new class of computer peripheral for people who spend a lot of time out of the office but don’t have to generate a lot of data (spreadsheets, written reports, etc.) while on the road. For example, the MessagePad’s built-in features are mostly some form of personal organization — calendar, address book, alarm —”forms”-type applications that don’t require much input from the user, if any.

Technology that Apple calls Smart Synchronization allows users easily to update information created on MessagePad with their desktop PCs or Macs. The Newton communications architecture supports optional faxmodems and pagers, as well as built-in “beaming” technology that allows wireless data transfer between Newtons. (For detailed information on the MessagePad, see accompanying story p. 5)

Getting personal. But what’s more important for the picture beyond MessagePad is the built-in capability for Newton technology to personalize itself to its user. One reason that users become emotionally attached to their Macintoshes is that it is possible to make the Mac feel like it’s completely their own: almost everything about the way the system looks, sounds and operates can be customized, from the sound it makes when you turn it on (my favorite is a piercing scream) to the background screen to the ability actually to alter the icons themselves.

Newton takes customization a giant step further with what the company calls Newton Intelligence. Although it learns to better recognize your handwriting over time, lending your MessagePad to a friend actually degrades its recognition ability: in beginning to adapt to someone else’s handwriting, the machine immediately begins to forget yours. It also learns how you do things — if you often look up a name in your address book, place a call, then schedule a meeting, Newton Intelligence is designed to anticipate your next action.

Like loaning a toothbrush. As Peter Dyson says in the accompanying story about the MessagePad, a personal digital assistant is much more personal than a personal computer. The whole idea of the PDA is to imbue it with your essence — you would never consider letting someone “borrow” it, it would be like loaning someone your toothbrush — and once it is so imbued, it becomes much more than a database or an address book or a calendar or even a messaging system. It will become the electronic representation of “you” on the network.

Certainly Apple and Microsoft understand this concept (as does General Magic). Despite their vision of the future, however, they rightly believe that the world at large is not yet physically or culturally ready to be represented by electronic agents. In the meantime, they are building products that people can use now, not when the “information superhighway” or “full-service network” is in place at some undetermined future point. Thus, Microsoft’s AtWork architecture is focusing first on making office equipment capable of sending and delivering messages, and Apple is concentrating on making life easier for mobile professionals.

However, grander visions are in the works from all concerned.

NEWTON’S EZTV: YOUR PERSONAL REMOTE CONTROL

Apple’s EZTV demonstration at Digital World was admittedly a mock-up except for the interface itself. But Gaston Bastiaens, VP and general manager of Apple’s Personal Interactive Electronics division, reiterated in a later interview that the EZTV project would definitely be based upon Newton technology. An interactive TV system based on a sophisticated communications platform such as Newton could provide the kind of integration that application developers, network operators and users need to help move interactive TV closer toward the “market” stage.

For example, there is no reason that the MessagePad or some other Newton device, with its built-in support for infrared communications technology, couldn’t serve as an intelligent, personal remote control — one that knows your preferences for news, products, music and movies, and tracks what information services you subscribe to — that works in conjunction with an EZTV system, either residing on the cable or another network such as the telephone or a computer net.

Nor is there a reason why many other products should not be based on Newton technology. It is already designed to interoperate with both the Mac and Windows. If it can already do that, there’s a high probability it can also be made to work with other systems, too, whatever they may be. And yes, this strategy would put it in direct competition with another Apple spinoff, Kaleida. (See brief, p. 22.)

Flexible, powerful system platforms such as Newton are the future for Apple, and for any hardware or software company in business today. After all, if there were so many more computers to be sold into businesses, why is every computer company in the industry foaming at the mouth to try to deliver consumer products?

IN A COMMODITIZED WORLD, HOW DO YOU WIN?

Clearly the success of the Macintosh was built on the tight integration between hardware and system software. Where opinions diverge is whether Apple should license the operating system to clone makers to increase its market share. (Actually, more people now believe the question is “when,” not “if,” at least in the case of the Macintosh.) As the company has moved toward the consumer market with lower-cost products, it has realized it could not be the sole supplier of MessagePads (or any future Newton device) and expect to get any significant customer base.

Taking in boarders. So Apple decided to take on licensees straight out of the chute. At the announcement of Newton a little more than a year ago at the Consumer Electronics Show, the company announced that Sharp, which had made an early reputation in the “digital assistant” market with the Wizard, would be its first licensee. Since then, Motorola and Panasonic, as well as European giant Siemens, have signed on to make various types of Newton-based products.

This does not assure Apple of success with Newton, however. As mentioned earlier, both General Magic and Microsoft have signed compelling partners for their competing technologies, including powerhouses such as Sony and Matsushita, as well as more traditional office automation companies such as Xerox. So as a hedge against the hardware margin squeeze, Apple is leveraging Newton as a publishing platform, too. (For a fascinating opinion on the subject, see I/O on p. 2.)

Apple claims that 1,500 companies have signed up as Newton developers (how many are actually developing products is impossible to know). Apple’s Bastiaens says that since the Newton logo and NewtonScript are protected by copyright and patent laws, developers may not publish products using either the logo or the script without paying a royalty.

Sipping from the royalty stream. Media companies aren’t wild about the idea. For companies that make their living creating and selling media, this concept is tantamount to Microsoft asking for a royalty from every author who uses Word to write their books or screenplays. However, electronic publishing of the type that will be done on Newton does create an interesting conundrum. Companies creating the tools need to make them easy and affordable so that they will be used. But to invent them costs a lot of money, and they believe they have a right to sip off of the royalty stream if developers are using their tools to make mass market products.

“A thousand developers consider this a generous offer,” says Bastiaens. “It gives them some assurance of revenue dollars in the future.” Though he wouldn’t commit to a percentage, he agreed the royalty would have to be low. Apple is certainly not the only company preparing to take a cut from titles. 3DO, the up-and-coming game machine company, intends to do so, and many of the household names in multimedia authoring tools are considering how to do the same thing. And, of course, Nintendo has been doing it for years.

It’s not necessarily the perfect way to attract developers, but if the deal is perceived to be fair, the revenue stream may be sufficient to get Newton to profitability in the short term; if Newton sales continue at the present rate, the stream may turn into a flood as people snap up the relatively inexpensive third-party software.

CAN A COMPUTER GUY BECOME A CONSUMER GUY?

No matter what benefits Newton may bring to Apple’s future, the danger remains that Apple’s new president Michael Spindler, a dyed-in-the-wool, traditional computer executive, will be disinclined to justify the financial support that Newton will need to survive and flourish.

As Apple struggles to regain its footing, it seems unlikely that Spindler will be willing to support two brand-new technology lines — the PowerPC and Newton — both of which will need serious internal momentum to survive in a world where a competitor as tough as Microsoft waits at every gate, and where a new desktop computer may be perceived as an easier sell than a whole new genre of computing devices.

Blood on the walls. This becomes an especially sticky problem when one tries to compare Newton to the Macintosh or the upcoming PowerPC. Surely a Newton with a keyboard would be cheaper than a PowerBook. Surely adding some memory and a hard disk to a Newton system would make for a killer desktop computer system. But no one at Apple will debate these questions because of their political ramifications. After all, whole departments are being axed at a swipe, and turf — i.e., responsibility for product development and marketing — is more jealously guarded now than ever before. As one person said, “It’s not a good time to discuss this. There is blood on the walls here every day.”

There are certainly compelling reasons to expand Newton beyond MessagePads and EZTV — both products are for markets that don’t yet exist and have to be created — if one wanted Newton to succeed; there are equally compelling reasons not to, if one believes such expansion would impact the sales and/or acceptance of Apple’s more traditional Macintosh or PowerPC computing platforms.

ENORMOUS BRAIN DRAIN MAY BE THE FINAL STRAW

All of these potential storms could be weathered with the fortitude of a solid base of experienced employees who understand the future for technology products, as well as how to make and sell them today. But it may already be too late, since Apple has already squandered much of its most precious resource. For many years, the company employed the best and brightest engineers, all of whom came to Apple because, as corny as it sounds, they thought they could “make a difference.” The household-word status of graphical user interface, multimedia and PDAs is a direct result of the company’s forays into those arenas.

A “blanking of vision.” During the past six months and in this latest round of layoffs, however, the company lost many of the people who had laid much of the groundwork for Apple’s long-term growth. Instead, it retained most of its product managers — and in fact is said to be hiring more — apparently operating under the belief that it will be able to return to profitability by producing low-cost hardware head-to-head with companies such as Dell and Compaq, both of which have suffered tremendously by the commoditization of hardware and which do not carry the additional overhead of creating and maintaining state-of-the-art system software.

This borders on corporate insanity, and exhibits what one Apple watcher calls a “complete blanking of vision and courage at the top.” Clearly what is special about Apple has always been, and will continue to be, its expertise in software and its deep knowledge of how people want to feel about their connection to machines. Newton is the latest jewel in Apple’s crown, but it is still only a step in the right direction. Focusing less on making more computers, and more on making computers do things that couldn’t be done before, will be the key to Apple’s renewed success.

Denise Caruso

NEWTON MESSAGEPAD: A LOT OF POWER IN A LITTLE PACKAGE

Newton technology is a significant milestone for both computing and publishing industries. Computing technology is beginning to benefit users away from their desktops, not by shrinking the desktop computer to hand size, but by automating the pocket notebook.

Newton technology will create a new class of information consumers, who now may find uses for data that would never have been practical with paper-based publishing. Developing these uses will offer a good challenge to publishers — that is, to those whose expertise is in gathering, formatting and marketing information.

Price and availability. In a month there will be Newton MessagePads for sale in every North American city; in two months they will be introduced to overseas markets and by next spring there will be localized versions for Europe and Japan. Newton will be sold at Apple dealerships, but the major distribution will be through consumer electronics channels: Silo, Circuit City, Sears and so forth.

There is no official list price. Apple says that each retailer will set its own price. However, Apple also says it expects dealer prices to range from $700 to $1,000, depending on configurations, options and software. This is at the high end of gadget prices, but it is not out of range for introducing a novel consumer device. We expect prices to fall once the backlog of early-adopter demand has been sated.

Clones. Apple has licensed significant parts of the Newton technology to various manufacturers with the express intention of creating a competitive market. The computer firm realized early that it could not crack the consumer market without help, and that consumers want most of all the security of being in the mainstream. That means there must be many vendors making compatible products.

The first clone using Newton technology is already out. Sharp (which is also manufacturing Apple’s product) is offering the Expert Pad. It has exactly the same guts as the MessagePad, but the plastic shell is a bit nicer. The Expert Pad has a hinged lid to keep the screen from getting scratched when it rattles around in a briefcase. Sharp says that the street price will be about the same as Apple’s.

Positioning. The MessagePad is not another “computer for the rest of us.” Instead, it is an electronic notepad for people who don’t use computers. (Actually, the early adopters will probably be computer enthusiasts who will want a Newton when they aren’t using their computers.) Communication and on-the-go information — not document creation — are Newton’s strong points.

Where Newton (and, we expect, a flood of successors and competitors) will prove its worth is on the consumption side of the information business. Apple has focused on organizing the snippets of data that people want to keep at hand: phone numbers, addresses, appointments, to-do lists, cocktail-napkin sketches and so on. The MessagePad is a place to create snippets, store them and use them.

The MessagePad is completely different from the Macintosh or any of the pen-based notebook computers now in the market. It is small enough and light enough (14oz.) to hold in your hand for extended periods.

Screen. The screen has reasonable resolution for the purpose: 336 by 240 pixels. It is not backlit, but Apple claims it is so reflective that the MessagePad can be used if any light is present at all. Users write upon a transparent tablet that sits on top of the screen, with what’s called a “passive pen.” Passive pens don’t require additional electronics to communicate with the screen (and are much cheaper to replace when you lose it). A LocalTalk network port is built in to connect with Macintosh desktop systems.

The MessagePad measures 7½ by 4½ by ¾ inches, so it doesn’t quite fit the “suitcoat pocket” form factor, but Apple says it will fit in the front pocket of baggy-style trousers.

The MessagePad is powered by the ARM610 processor, a 32-bit RISC chip that is optimized for low power yet gives reasonable performance. It also contains a whopping 4 MB of ROM and a modest 640K of RAM. The system uses most of this for workspace, but there is about 256K available for data.

The unit also has a PCMCIA slot for add-in modules. Apple offers 1-MB and 2-MB memory cards; there is also a pager communication module. Much of the commercial software for the Newton MessagePad will be delivered on PCMCIA cards; today’s standard type-2 card can hold up to 4 MB of ROM, which is sufficient for vast amounts of text or for databases of reasonable size. For communication, the MessagePad has three built-in options (in addition to whatever you put in the PCMCIA slot).

Serial port. This is the standard Macintosh printer port; it can be used directly with serial printers, or via the Newton Print Pack to parallel printers. It can be used to connect to LocalTalk networks. Apple is offering an external data/fax modem that will connect to this port. For most dedicated mail users, the MessagePad will probably not be truly useful until this option is available.

We should also point out that the modem has about the same bulk and heft as the MessagePad itself. The real weight in your briefcase of a complete Newton setup — MessagePad, modem, application and data PCMCIA cards, spare battery and charger — is still measured in pounds rather than ounces.

Infrared link. Using the same technology as a TV remote control, you can “beam” information directly to another Newton. The effective range is only about one meter, the speed is only 9,600 bps, and the two Newtons must be pointed at each other. There is no base-station hardware to allow beaming information into a desktop computer. (There’s no reason one couldn’t be made, but no one has done it yet.) But this looks like a quick, effective way to pass on the kind of information Newton is designed to handle: small, informal chunks of text and line graphics.

Speaker. It sounds clunky, but you can use the MessagePad’s internal loudspeaker to generate TouchTone sounds, either to dial the phone from a number stored in Newton’s memory or to activate more-complex telephone features such as retrieving messages from an answering machine.

System software. The Newton system software is even more impressive — and more adventuresome — than its hardware. The whole system is optimized to deal with hundreds or thousands of small snippets of information floating around in an “information soup.” Any snippet can be related to any other snippet, and so forth. The same snippet may be “stored” in as many as 12 different folders without duplicating it.

Most information is compressed at ratios between 4:1 (images) and 6:1 (text) so that it takes up less memory. (The Newton has no disk memory.) System software is completely object oriented. The base system includes objects that deal with system hardware and common tasks such as handwriting recognition. “Application” programs build on top of this — and on top of each other. (Any application can make use of any objects already available in the system.)

Applications are written in a NewtonScript language that has a syntax modeled after C (to make it easier for PC and Macintosh programmers to make the transition to Newton). All of this should help make it quick and easy to write Newton application programs — and should help keep the resulting programs compact.

Built-in, system-level applications include the Notepad, which is the basic user interface for text and graphics; the Name File, a contact manager or rolodexer; and the Date Book, which acts as an alarm clock, appointment book, calendar and to-do list. Another application, the Newton Connection, synchronizes information between the Newton and a Mac or PC.

Power. The MessagePad is powered by four AAA alkaline batteries or a rechargeable nickel-cadmium battery pack with a lithium battery backup. Apple claims that the alkaline batteries will last about two weeks in normal use. The rechargeable pack will last about a week between charges. It can be recharged in about three hours in a clever plug-in charger or in about 10 hours if recharged in the MessagePad. This is an improvement over the original estimate of eight hours per charge.

Handwriting. We were moderately impressed with the success of Newton’s handwriting recognition software. It is far better than any other we have tried, but still not perfect. At first, the software has a hard time figuring out even the neatest hand. However, it learns as it goes, both by building a dictionary of your words and by familiarizing itself with your stroke styles. There is a training module (part of the Preferences utility) by which you can speed the learning process.

There are some secrets to achieving reliable recognition. For example, the order in which you make the writing strokes sometimes matters. You need a pronounced increase in letter size to be sure of obtaining a capital letter. There are invisible boundaries outside of which the recognizer may not be looking; these vary with the application. Indeed, although the Newton gets better over time, we suspect that it is training you as much as you are training it.

There is one drawback to Newton’s learning process: lending your Newton to a friend degrades its recognition ability. In beginning to adapt to his handwriting, the machine immediately begins to forget yours. A personal digital assistant is much more personal than a personal computer.

Platform agnostic. Although Newton is an Apple product, great care has been taken to ensure that it works well with both Macintoshes and Windows PCs. (In a throwaway line during the product launch, one speaker claimed that Newton was more compatible with Windows than any of the Intel-based pen computers.)

Apple — or at least the PIE division — realizes that most of the computers that Newton must work with aren’t Macs. For desktop applications, there are client interfaces for both Mac and Windows. The interface uses AppleEvents or Windows DDE to pass information between the Newton and the application. Thus notes can be uploaded to a database or spreadsheet, or the Newton can download fresh material to take into the field.

The Mac has a head start in getting developer tools. A beta version of the developer kit went on sale at Macworld, with the promise that a finished version will be out before year end. There will also be a Windows version of the developer kit, probably later in the fall.

Third parties. About two dozen applications for the MessagePad were demonstrated at the Apple rollout, most of them oriented to traveling business people. Connectivity with dial-up and LAN-based E-mail systems was a common theme. Many of the applications were not really ready for commercial release and had no prices. Among those that did, the pricing seemed to range from $99 to $120. This strikes us as high for the consumer market, but it might be all right for the early-adopter market.

We were especially taken with Fodor’s Travel Manager, which contains street maps, restaurant ratings and how-to-get-there advice that can be invaluable to conventioneers. So far, there are guides for New York, San Francisco and Boston; eventually all the cities in the printed Fodor’s guides will be available. Typically, you would prepare for a trip by loading up your MessagePad with material for the cities you will visit. A 4-MB PCMCIA ROM could hold guides to the top 50 cities; or an online database could fill up a RAM card with the latest data. In time, it may be possible to use cellular-phone technology to dial-up the latest local details wherever you are. Other applications included:

• Games. Claris sampled a dozen children’s games, such as Hangman and Enigma. No one would pay for these on a desktop computer; they are in every shareware collection. But Claris wrote the games as a way of learning what works and doesn’t work in the Newton environment, both technically and in the user interface. The games are actually less compelling than a Nintendo Game Boy, but we think Claris will produce some real software in the future.

Fingertip Technologies showed a golfer’s assistant. It keeps track of scores, handicaps and wagers out on the links; back home, it can do statistical analysis of your weaknesses to guide your practicing. Fingertip also promised a PCMCIA card of baseball statistics in time for the 1994 season.

• Expense accounting. State of the Art, a developer of accounting software, showed a utility for collecting and organizing travel expenses. You write the expenses into the MessagePad as they are incurred; there’s a little form for this. When you get home, you can review the expenses by date or category, then print them out on a reimbursement form. (In a hurry to get paid? Fax the form in from the field.) You can also upload the expenses to a PC, where they can be fed to databases, spreadsheets and accounting programs.

• Presentations. Avalon Engineering announced PresenterPad. It can serve as a teleprompter, with adjustable scrolling speed that learns the speaker’s tendencies for tempo and digression. It can also show the speaker whether he is ahead of or behind schedule. It also has an interface to desktop presentation packages and to infrared remote control so the speaker can roam while talking.

• Sketching. Saltire Software announced DrawPad, which takes hand-drawn sketches and cleans them up for presentation. It aligns objects, scales and stretches them, calculates areas and perimeters, shows dimensions and notations in nice fonts, etc.

Peter Dyson