IMEN301: Technology Management
Homework Assignment #2
The first personal digital assistant
A multinational corporation, headquartered in
It was founded on April 1, 1976, and named Apple
Computer, Inc. on January 3, 1977.
(The word “Computer” was removed in 2007,
the same day the iPhone was introduced.)
It designs, develops, and sells consumer
electronics, computer software and personal
Today it is the second-largest information
technology company by revenue.
Nevertheless, when the MessagePad was
developed and launched, the company
struggled with decreasing market share due to
many failed consumer targeted products as
digital cameras, portable CD audio players or
High R&D costs were used to develop the
MessagePad between 1987 and 1993 to prevent
further losses in market share.
Officially named the MessagePad, it was
a hand-held communications assistant
with a touch-screen and pen-stylus that
allows the user to gather, manage, and
Furthermore, to take notes, store
contacts, and manage calendars, send fax
and translate handwrite into text.
It took Apple ten years of development, it
spent more than 100 USD Million and the
product was five years on the market.
“The goals were to
design a new category
of handheld device and
to build a platform to
- Steve Capps
(Chief Architect of
ARM 610 (RISC) @ 20 MHz
640K internal, 4MB PCMCIA
336 x 240 reflective LCD
touch-screen w/ stylus
RS422 serial, Infrared
Expansion one PCMCIA (Type II) slot
Newton OS v1.05
Design of Apple Newton
Analysis of Design Dominance
Firm-level and Environment Related
1. Firm's technological superiority
The degree of the technological development was very high.
Newton wasn't a Personal Computer (PC), it was a
completely new category of device running an entirely new
architecture and a completely new and bold design language:
the first Personal Digital Assistant (PDA)
Following applications were included:
• Names: contact database
• Notes: small documents (in own handwriting/ to draw
• Dates: personal calendar for scheduling time and days
• ARM6 processor
Nevertheless, there existed a few deficits concerning the performance and use.
Firstly, the Newton PDA was 4.5 x 7 inches large and almost one inch thick. That's
why it was considered as too large and heavy (almost one pound) to be pocketsize and to use on the go.
Secondly, it was limited by the very short lifetime of their inadequate AAA
Thirdly, the non-backlit LCD screen had poor contrast and made it difficult to
Fourthly, Apple used a reduced flash memory and integrated the multi-tasking
function. This greatly slowed down the processing speed of the device.
(Apple tried to put together too many features within a short time span. So,
applications were almost too complex to manage.)
2. Firm's Credibility
Able to interpret the user's handwriting into
Only the 4kg heavy and $2,795+ costing tablet
Linus Write-Top (incorporated in 1987) offered a
touch-screen and handwriting recognition before.
Newton's core competency was often
inaccurate and gave mixed results.
3. Complementary Assets
Newton Connection Kit: serial cable to attach to other computer systems (Mac/
Windows) to synchronize, transfer files, restore Newton/ install software onto
Further simple tools: Calculator, Currency Converter, Time-Zones Maps etc.
Newton Print Pack: printer-cable to plug into Newton serial port and print to a
wide assortment of printers
Support of type-II PCMCIA expansion cards (1/2/4MB flash storage cards)
e.g. 4MB card stored 250 personal contacts, 200 notes, 500 calendar
appointments, and 35 screens of text
4. Network Effects
Newton was a first of its kind standalone
platform which was compatible with all
the prominent document file formats
present during that time (.rtf, .doc, .xls) and
a large variety of computer operating
systems (Mac OS, UNIX, Linux, Microsoft
Windows) to facilitate package installation,
capacity planning and disaster recovery.
5. Switching Cost
Newton had no switching cost, going strictly by definition,
since it was an entirely new concept.
However, priced quite steeply at $700, its value was often
questioned and compared with relatively much cheaper
paper notebooks that it was a replacement for.
Considering this, the Newton can be said to have a very
high switching cost.
6. Regime of Appropriability
•There were no significant non-firm and non-market
aspects of the commercial market governing the Newton.
•Newton was not affected by any intervention from the
government and/or industrial organizations.
8. Characteristics of the Technology Field
•Although there were actors including Motorola and Sharp
in the market, most devices were produced by Apple.
•Since there was no other platform available, other
hardware manufacturers had to cooperate with Apple.
•The level of cooperation was higher than the level of
Timing of Apple Newton
Apple as a First Mover in the
Personal Digital Assistant Market
1. Too much ahead of time.
• Newton was introduced to a society that was
unfamiliar with electronic devices so the customer
requirements were uncertain.
• As there was no product like the Newton PDA on
the market before, Apple had to clear the usage of
the device (whether to use as a toy, substitute it for
a computer, or take it along when travelling).
• Therefore, Apple ran a series of ads that illustrated
various applications the new device could be used
for. But it wasn’t of much help.
• Basically, people didn’t know what to do with it.
2. Network Externality: Connectivity
● Apple launched it at time when
internet was still in developing
stages - 1993.
● Technologies such Wi-Fi and
mobile data (2G, 3G, 4G, LTE)
were unheard of at that time.
● So it was not much of use
without the internet.
3. Immature Technology
Since it was the first time handwriting recognition was
introduced, it had a lot of flaws which led to its rejection
by the consumers.
Additionally, the dictionary was very limited. Although the
user could add words themselves, difficulties were
caused by the long time required to "learn" the user's
handwriting; this process took from weeks to months.
4. Slow Development Cycle
Though they eventually improved
the handwriting recognition
function, it was too late by then.
“The one stumbling
block had become a
joy to use, but it
really never got a
- Gavin Ivester
5. Undeveloped Supply Channel
The heavy software on Newton OS
long lasting batteries
which were unavailable at that time.
6. Undeveloped Distribution Channel
operating system had a very
large established and loyal user
base. But the Newton was not
similar to any product existing
on the market.
So, people didn't see the new
device as a complementary
good or substitute.
Apple had to build up a
new installed base: only
units could be sold.
7. Firm's Strategic Maneuvering
Apple revealed too many details of the project too early
(concept introduction in 1991, two years before first device
was shipped) and was thus forced to release the product
when it wasn't really ready.
Not all deficits were worked out and marketing efforts
hadn't have enough time to adequately support the product
before it became available to consumers.
8. Firm's Financial Condition at the Time
Another reason for Apple's fast release was their financial
issues. The company had to move fast and take decisive
action to minimize losses, obtain new finance, and recast its
After their launch, the product was described as overly
ambitious but with a poorly disciplined product
development. As Apple built high market expectations, the
product launch sorely disappointed the market.
Apple being the first-mover in te personal
digital assistant , Newton required immense
research and development which was
reflected it its price.
And since it wasn’t so understood by the
customers, they were not willing to pay
$700 for a product they couldn’t undertand
the use of.
10. Complements and Compatibility
As previously discussed, Apple had ensured that complements
were available for the Newton with the Newton Connection Kit,
the Newton Print Pack.
Its compatibility was also ensured with all operating systems and
with expansion cards.
So even though being a first-mover, complements and their
compatibility didn’t pose such a problem.