How the world learnt from Apple’s failure

By Rob Anderson

Premature Genius — the Apple Newton

The Newton MessagePad platform was an early personal digital assistant, an ancient ancestor of the iOS platform used in the iPhone and the iPad, and the first tablet platform developed by Apple. The Newton’s life span was a brief one, with development starting in 1987, launch in 1993 and cancellation in 1998. The product was a huge financial disaster for Apple. Although the exact scale of the Newton losses remains unconfirmed, some sources say that the company sunk a billion dollars into the Newton and recouped only about one quarter of that amount in sales. This is hardly surprising given that, even at the height of the device’s popularity, only an estimated 200,000 Newtons were in use.

Newton was intended to revolutionise personal computing. The end goal was to create a tablet computer costing around the same price as a desktop computer, opening up an entirely new market around personal digital assistant devices. Among other features, the tablet would be the size of an opened magazine, have cursive handwriting recognition and a special user interface. For most of its design lifecycle Newton had a large-format screen, more internal memory, and an object-oriented graphics kernel, but of the three sizes developed, the initial 1993 launch product - the MessagePad - was a scaled down ‘junior’ product. 

One of the original motivating use cases for the Newton design was the ‘Architect Scenario’, in which Newton’s designers imagined a residential architect working quickly with a client to sketch, clean up, and interactively modify a simple two-dimensional home plan. Whilst the architect in this instance would certainly benefit from the Newton’s features, Apple was hardly aiming at a large target market by focusing on such a specific scenario.

Since the Newton was cancelled, industry speculation has identified a number of reasons as to why the Apple Newton failed so badly. Principal among these is the fact that Apple ignored certain customer needs as to the specifications of the tablet. The Apple Newton was:

  • Too big. At around 4.5 x 7 inches, almost one inch thick and weighing almost a pound, the Newton was really too large and heavy to be considered pocketsize.
  • Too expensive. The Newton cost about $700 for the first  model and as much as $1,000 for later versions. 
  • Cumbersome to use. It had software problems, notably, it operated too slowly; certain actions, such as scrolling through notes, took too long and its handwriting recognition was fairly inaccurate. 
  • Pre-announced too early. The Newton was announced nearly two years before it launched, creating unrealistic expectations for a transformational product, which was then rushed out to gain an edge in a reckless public relations battle.
  • Seen as the pet project of then Apple CEO, John Sculley. In 1993, Sculley - who had forced out Steve Jobs in 1985 –was himself forced out, just when the Newton team was getting ready to release their first product.
  • Premature. Though some competing products were put out just before it, including the Amstrad Pen Pad, the Newton had no real market familiarity.

Although Apple had learned about key customer needs during market research, it apparently ignored these when it came to developing the product, opting instead to push ahead and beat its competitors to launch. 

Newton Project Leader, Larry Tesler said, “In the end, we cut corners and ignored problems to try to meet a price range and a ship date that we had prematurely announced to gain an edge in a reckless public relations battle”.

In 1995, three years before the Newton was cancelled, Palm Computing (then a pision of U.S. Robotics) introduced some serious competition into the personal digital assistant market. The company quickly dominated the handheld market with the wildly popular ‘Palm Pilots’, which were smaller, cheaper and easier to use than the cumbersome and costly Newton. 

The original motivation of the Palm Pilot’s inventors was to create handwriting recognition software for other devices but during the research process, they realised they could create a competitive handheld computing device. By 1997, Palm had a 66 percent share of the personal digital assistant market, Windows CE had 20 percent, and Newton just six percent (Dataquest). 

The Apple Newton is said to have failed because it was ahead of its time and because its launch was badly thought through. Although the technology was forward thinking, it did not meet identified customer needs, was not able to adapt to those needs and could not recover from being put onto the market before it functioned properly. Despite this, Newton’s existence has arguably had a significant impact on the industry - much of the success of later Apple products such as the iPod, iPhone and iPad, and even competitor devices like the Palm Pilot, is said to have been built on the back of the Newton’s development. Even the advertising of the iPad clearly echoes that of the Newton.

However, unfortunately for Apple, it was the Palm Pilot that led to a real revolution in handheld computing, not the Newton. Jeff Hawkins, one of the original creators of the Palm Pilot, suggests that the device’s commercial success has a lot to do with responding to consumers’ needs. He maintained that it is important to make trade-offs on “what to put in and what not to put in”, so that the product maintains the correct balance of technological features, usability, and affordability. If Hawkins had worked for Apple at the time, perhaps things would have turned out rather differently. Having said this, Apple seems to have recovered quite well.

Rob Anderson

Rob was a founding director of Edengene in 2000, having previously been head of the business growth practice at PA Consulting Group. A chartered accountant with strong finance skills, he has 20+ years’ consulting experience working with blue chip companies, designing and directing multi-year growth and innovation programmes. Rob is the author of Edengene's customer-led innovation methodology, which provides a structured approach to innovation to deliver revenue growth.