Posted 1330 3 February 97: Updated 8 Feb 97

Apple Recon Exclusive!

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8 Feb 97 Update: "Clarifications"

3 Feb 97: Newton's Law of Anti-Gravity....

The reports, rumors and speculation that Apple (AAPL.O) is going to dump the Newton platform belies "Newton's Law of Anti-Gravity". As RFI pointed out in its "Wireless & Portable NC Special Report" (from 1995) the Newton Platform, including the: Newton, Pippin and e-Mate 300; is what makes Apple "THE Hottest Portable NC Play". And RFI explained why the Newton Platform and NewtonOS would be key players in the NC/Information Appliance Revolutions.

FWIW, RFI knows of several companies and entities that are basing their lines of innovations/products on the StrongARM platform and NewtonOS; especially since it affords interoperability with MacOS, PPCP and Pippin. And although NewtonOS doesn't, and reportedly won't, support OpenDoc, it's what WinCE hopes to be someday.

Also, RFI has heard too many business types lusting after the e-Mate 300 because of its functions and features. And they are being especially "nice" to people with children in school so as to possibly be able to get one on the sly. If Apple finds it's selling a lot of "conservative color scheme e-Mates", they'll know where they're going.

Basically, the e-Mate is a portable communications station that is low maintenance and possesses most of what the average business type needs for daily activities; for which a laptop is overkill. Never mind that the business types also have a "wish list" of products that will enable them to fully exploit the potential of the platform. And that's where at least one of the companies is developing products and solutions.

Yet, the reports and rumors that Apple is considering selling off the Newton platform brings up several questions. Apple is reportedly in talks with several Venture Capitalists regarding Newton, and RFI knows of two potential suitors that are salivating over the prospects of being able to pick up the Newton "on the cheap" once the markets and Apple fully discounts its price. However, we can't disclose their identities at this point in time, but we can identify some other "likely suspects". Which brings us to the point of what other companies might be interested in obtaining the NewtonOS and platform; even if it is only partial ownership. Right off the top of our head, RFI suspects that Acorn is a likely suspect as they are not only looking for markets for their chips, but they also want a full-featured "NC" OS that will run on those chips and be the basis for the new products they are looking to be made. If they can offer both the chips and a "mature OS" as a package, then their position is strengthened. Acorn is part owner of Advanced Risc Machines (ARM) that makes the StrongARM chips that run in the e-Mate 300, and other Newton products such as Pippin and the Newton 2000. Apple also owns part of ARM and it would make "sense" for Apple to "sell" Newton to Acorn/ARM while maintaining part ownership and access to the future technological developments. While RFI has no solid basis for this opinion, it does make sense.

Recently, someone who saw the OS that Acorn was demonstrating for their StrongARM products basically panned it as a force to be reckoned with. They were "underwhelmed" by it. As well as the fact that the products Acorn was currently pushing and demonstrating were mostly relegated in their appeal to the United Kingdom. In other words, both their current products and OS would have little appeal in the U.S. or the rest of the world. And, the source opined that Acorn knew this full well; which is why they are looking for companies that will exploit the technology as well as the Operating Systems that will run on the StrongARM chips. "Flexibility" is the term Acorn is using regarding its strategy. So, Acorn is a "highly likely suspect" as one potential suitor/bidder for Newton, and RFI has at least one other. Last October, RFI broke the news that IBM (IBM.N) was running a "pilot project" running "Apple Network Remotes" off IBM mainframes that were also possibly wireless and portable. The "pilot project" is being run in Singapore and subsequent reports relayed that demand for participation in the pilot project was growing in the local area. The story was also reported in MacWeek as part of a "Mac-The-Knife" column at the end of October.

Attempts to ferret out further details have been slow, as the pilot project is being kept under tight wraps. However, RFI did learn that the pilot project had been extended and expanded because of its popularity and success. One of the people working on the project related that they had expected to be in Singapore for 6 months, but their assignment there had been extended to at least 18 months.

Ergo, it is not outside of probability that one or more of the companies involved with this pilot project might desire to obtain the NewtonOS as to be able to exploit this successful pilot project; even though "consensus" believes that JavaOS will be the "be all and end all" for NCs and Information appliances. So much so that even Microsoft (MSFT.O) is attempting to "Hijack Java" from Sun (SUNW.O).

And while RFI does not expect IBM to step up to the plate to buy Newton, it is not without probability that that the PowerPC partners will "steer" Newton to an "acceptable buyer" that will enable them continued access to the platform and ensure compatability with their offerings. At the least, Apple will ensure its continued access; as it did with the Bandai license of Pippin.

Which brings us to the point as to whether we consider the potential sale of the Newton platform to be a strategic success or blunder. Depending on the terms of the sale or spin-off will determine our final analysis of any such move. Although the potential deal with Acorn that we discussed above would probably be best for all parties concerned. Bottom Line? Currently, one of those companies basing their innovations and products on the NewtonOS and platform are watching with extreme interest what Apple intends to do with the Newton platform. While it would be costly to switch over to a Java based solution, they will do so before the products are ready for the beta tests and market introduction. It will just complicate their lives for a while and delay the product launches. We'll keep digging and keep you posted...

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