Re: [NTLK] Interesting article about the Newton

From: Roman Pixell [GMail] <>
Date: Mon Dec 11 2006 - 17:50:44 EST

it is very interesting to hear from maurice about the market failure,
but i have a couple of concerns.

On 11 dec 2006, at 23.15, Maurice Sharp wrote:

> 1. Apple needed to focus on rebuilding strong and recurring
> revenue... i.e., lines that had good profit and would sell

wasnt it a margin, rather than a profit issue? i remember apple
always had a huge margin on the laptop line. when the newton came,
the margins were halved. apple mgmt feared that the cannibalisation
process was to painful for apple in its financial position of 1997-1998.

> - creating a Newton device that would sell would have taking a lot of
> investment and time, and Palm was already starting to take off (of
> course there was that one-off skunkworks Newton built into the shell
> of a Palm Pilot :-)

i dont understand how the development costs of a low-end neton would
surpass the sales. the palm was a proven winning concept and each
palm release was more successful than the previous one.

> - there was a fundamental disagreement about what would sell in the
> market: the 2x00 style or a Palm style

wasnt that obvious already back in 1996? apple was conveying a
confusing message to the customers with the provision of larger and
larger models, at the same time as the rest of the electronics market
was miniaturising its models.

> - Apple is historically bad at licensing and the licensees were not
> contributing to growth

maybe not, but it was important for credibility and marketing in the
vertical markets, thus boosting overall sales.

> - Newton as a separate company needed too much important Apple
> intellectual property (not to mention cash) to survive

is this really true? from what i understand, the newton division
generated enough money on their own in late 1997. this was projected
only to improve during the following three-four years.

> 2. Steve Job's hated the Newton
> - There were 2 strikes against Newton from Job's perspective. First,
> Steve did not like the Newton from a design perspective (see above.)
> Second, it was Scully's child, and Steve had no fondness for Scully
> based on how he was forced out (and he can hold a grudge for years.)

the second bullet might explain why apple didnt licence NOS, but
still still not from a commercial perspective. even though i believe
jobs could have a short fuse etc, he must still be a business man? i
seriously doubt it was that much prestige in the newton. it was still
a marginal product. my guess is that jobs feared that the NOS would
continue to cannibalise the powerbook sales and the high margins that
apple needed so much.

to me, it still looks like apple tried to push a new product (PDA) on
a new market (business/vertical) with undealistic sales projections.
combining entering new markets both on the product AND the marketing
side is coupled with risk. when apple failed to meet their own
overestimations, they bailed out - too bad.

vänliga hälsningar / warmest regards,

/ ®

roman pixell, freelancer
karmatic experience group
kåkbrinken 11a 3tr
111 27 stockholm

ICQ: 3698764
skype: romanpixell
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Received on Mon Dec 11 17:50:56 2006

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