Apple drops Newton

Television Digest with Consumer Electronics, March 2, 1998

Apple will continue to market Newton MessagePad 2100 and eMate 300, but future beyond existing inventories remains in doubt. Decision comes only mouths after interim CEO Steve Jobs blocked spinoff of Newton into separate company and brought division back into fold.

Apple reiterated commitment to personal digital assistant (PDA) market and indicated it would roll out new line based on Macintosh OS next year. "This decision is consistent with our strategy to focus all of our software development resources on extending the Macintosh operating system," Jobs said. "To realize our ambitious plans we must focus all of our efforts in one direction."

Move to scrap Newton appeared to catch retailers by surprise. Product endured 6-year odyssey from product hailed by former Chmn. John Sculley as Apple's entry into CE business (TVD June 1/92 p10) to butt of jokes when first-generation handwriting recognition software proved bust. Apple later shifted focus of product to business market and rimmed to spin off Newton group last June.

Steven Elms, pres. of Newton Source chain, blasted decision that put future of his 4-store operation in doubt. "We've been selling Newtons for 4 years, and this type of thing happens every 6 months," he said. "It's just part of the litany of dealing with Apple. A year ago it was spun out as a separate company and funded for 2 years. And then Jobs comes in and brings the thing back into the fold under the aegis that he sees the eMate as a huge opportunity. Now 6 months later, he makes another proclamation. I don't think the guy knows what he's doing."

Elms insisted Newton has been making inroads at high end of burgeoning corporate PDA market, citing deals with Bristol-Meyers and others. "Things have been going fine," he said. "The Newton gets great reviews. It's the best technology out there, bar none, but it's run by a ridiculous company. The biggest problem we've always had is Apple."

Newton has been suffering by being lumped in PDA category with 3Com's PalmPilot and other lower cost products, Elms suggested. "The PalmPilot is an organizer. The Newton is a handheld computer, infinitely programmable," he said. "You can do email, you can do Web-browsing, you can do a host of things. It was purposely designed to be handheld. It's got a 160 MHz processor running off a couple of double A batteries. It's very powerful."

Newtons currently are manufactured by OEM overseas, Elms said. Newton Source, which has stores in N.Y., L.A., S.F. and Chicago, will be supplied with product over short term, he said, but said long-term product flow in uncertain.