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Sculley: Newton Selling Well Despite Criticism

September 14, 1993

BOSTON (AP) _ Apple Computer Inc. chairman John Sculley said Tuesday its Newton handheld computer has sold well in its first month despite criticism that it has trouble recognizing handwriting, which is how it collects data.

He said Apple has sold close to 10,000 units of the Newton MessagePad, one of the first of a new breed of portable computers that will be used chiefly for communications.

″I think for a new product it’s off to a really good start,″ Sculley said at a conference on computer trends. ″It’s like any first new product. There are bound to be things we’d like to see it do better.″

Critics have said Apple should have waited to begin selling Newton until its handwriting software was better. A person enters data into the machine with an electronic pen on a small screen.

Sculley said if other companies develop better software to recognize handwriting, the company would be willing to look at it. Apple is licensing the Newton’s basic technology to other manufacturers, and Sculley noted some of them may use other software for handwriting recognition.

A basic version of the Newton MessagePad costs $700 but Sculley said about 85 percent of its buyers have spent more for one with a modem.

Deliveries have been slowed by the shutdown of a manufacturing plant in Japan for summer vacation last month. ″So we have huge back orders,″ Sculley said.

The Newton is competing with first-generation products from Tandy Corp. and Casio Corp. that are similar in size and price and a clipboard-shaped computer from AT&T and EO Corp. that is more expensive and has cellular communication capabilities.

While they represent a significant advance in computer technology, the devices’ foibles have become the butt of comedians’ jokes and even a weeklong lampooning in the comic strip ″Doonesbury.″

″I think Apple has really received a lot of unfair ink. All of these devices all have problems that have to be worked out,″ said Bill Bluestein, an analyst with Forrester Research Inc. of Cambridge, Mass., which sponsored Tuesday’s conference.

″Newton was over-hyped in the beginning and now it is being over- attacked,″ he said.

Sculley drove development of the Newton and has been outspoken on the convergence of computing and communication technologies, which he calls a ″digital revolution.″

Some of the criticism directed at the product has been ″impacted by the profit problems Apple’s had in the computer business from the price war,″ Sculley said.″The articles in the media really don’t have much to do with what’s happening in the marketplace.″

Apple has been forced to cut prices on its PCs, cutting into its margins and forcing a restructuring that in July resulted in the worst quarterly loss in the company’s history. After 10 years as chief executive officer, Sculley was replaced earlier this summer by Apple president Michael Spindler.

He has since faced rumors that he may soon leave the company. He has been on sabbatical for most of the summer, participating only in the introduction of Newton last month and occasional speaking engagements.

Asked about his future, Sculley said, ″My big interest is what’s happening with this (digital) revolution. There are things I can do at Apple that are important with that.″

″My main criteria is that I don’t want to live on the West Coast anymore,″ he said. Apple’s directors have agreed to let him work in the East.

On news accounts that said he is a candidate for chief executive officer of Eastman Kodak Co., Sculley said, ″I haven’t talked to anybody at Eastman Kodak.″

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