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business newsOverhyped Products: Apple Newton
By
Jarrod Dicker Sep 28, 2009 8:50 am
Who wouldn't want a seven-inch-long, one-inch-thick, hand-held PDA?
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-- Bernard M. Baruch
Such a shame that so many saw the apple fall but never thought to ask why. Especially when you’re foolishly neglecting the apple's tumble three hundred years after Isaac’s lesson was uncovered.
Apple (AAPL) founder Steve Jobs invited John Sculley to the Macintosh family as CEO in 1983. He hoped Sculley would bring the marketing expertise he had demonstrated as vice president of Pepsi-Cola to the personal computing market.
Sculley's innovative brainchild, the Apple Newton, was intended to be the product that was going to completely reinvent personal computing. The “Personal Digital Assistant (PDA)," a term coined by Sculley, was going to be revolutionary in its technology and capabilities, allowing users to manage their business and personal lives on a hand-held device. It was projected to transform the digital world, and with Apple's reputation, who was going to doubt its success? Regrettably, in this case, the Apple fell way too far from the tree.
Brewed up in 1987, the Newton made its highly anticipated entry into the commercial world in 1993. Offering applications like “notes,” “dates,” and “calculator,” the Newton was set to be a driving force in the industry. So how could a product with such colossal hype and potential end up becoming one of the biggest product failures of all time?
An ancient proverb states that, “When the apple is ripe it will fall.” But it doesn’t explain what happens when the apple is ripped from the tree prematurely.
The Newton certainly had its problems. The hasty preparation and distribution of the model pioneered a domino effect of technical issues, mostly related to the fact that the Apple Newton promised features its technology couldn't deliver. For the outlandish price of $1,000, the product was nowhere worth the cost. Not to mention its size: The Newton was nearly seven inches in length and one inch thick.
The Newton also boasted its innovative and highly anticipated hand recognition software, which would pick up on the user's hand gestures and his “supposed” individual handwriting. This key highlight of the inventive product proved to be extremely faulty. As stated by Newton software developer Brant Sears:
“The handwriting system on the original [Newton] was designed to recognize entire words rather than letters. This was because focus group data told Newton engineers that people would insist on being able to write in cursive. When the system made a mistake, it would pick a valid word that was different than the one intended leading to hilarity and ridicule.”Hilarity and ridicule is right: Major comedic media outlets began jumping on Apple’s anomaly and incorporating it into their programming.
The Simpsons episode, Lisa on Ice, integrates the Newton as a prop in an altercation between the bully, Kearney, and his victim Martin. Kearny orders his friend Dolph to take down a memo on his Apple Newton to “Beat up Martin." The Newton misinterprets Dolph’s handwriting and instead processes it as “Eat up Martha." Kearny opts to just throw the Newton at Martin instead.
Gerry Trudeau’s successful Doonesbury comic takes a stab at the Newton’s dysfunctional handwriting technology as well.
It seems impossible that anything coming from the catalog of Steve Jobs would be under-developed with his reputation of producing winners. But this wasn’t Jobs. This was Sculley.
Jobs hired Sculley into the company for the single mission to amplify the marketing strategies at Apple, but what he got was an enemy. Jobs and Sculley butted heads right from the get-go, forcing a division in the company and irregularities in the flow of business. Eventually Sculley demanded the elimination of Jobs’ operational responsibilities, which Apple's board agreed with. Jobs left Apple in 1985 to start a new business venture until his inevitable return to Apple in 1996. Sculley developed the Newton and almost drove the business into the ground. He was forced out in 1993, right around the Newton’s release. In the TV documentary, Nerds in the Valley, Jobs highlights the mistake of hiring Sculley:
“What can I say? I hired the wrong guy. He destroyed everything I spent ten years working for. Starting with me but that wasn’t the saddest part. I would have gladly left Apple if Apple would have turned out like I wanted it to.”
Jobs’ Jesus-like return to Apple saved it from rotting to its very core. It’s estimated that Apple spent over $1 billion in development of the Newton, and that it made less than $200 million in return.
At the time, the PDA market was being taken over by Windows CE (MSFT) and most notably Palm (PALM), and it was time for Apple to just suck it up and move on. Apple's share price at release of the Newton was $6.63 and at its discontinuation five years later it was $5.91. Today it trades for about $170 per share.
As explained in the Wired magazine article “Apple Newton Just Won’t Drop,” in 1997, “Palm had a 66 percent market share and Newton just 6 percent. At the height of its popularity, only an estimated 200,000 Newton’s were used.”
The death of the “ground-breaking” PDA left a large hole in Apple's pockets, but they had to bite their lip and accept the losses. As we know now, this mishap didn’t even dent the colossal force that is Apple, Inc.
How many of Steve Jobs’ iPhones were sold in just the first weekend it debuted? One million. Jobs has turned one of the biggest technology producers into one of the most fashionable accessory fads in the world. What’s next? Mercedes Benz iClass? There’s no limit when it comes to Apple innovations -- even if once in a while it takes a flop like the Newton to set it back on track.
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