I’ve read the long, fascinating interview with John Sculley by Leander Kahney at Cult of Mac. (I have also translated the whole transcript into Italian and published it in 3 parts on my Quillink Observer blog). Most of the interview is about Steve Jobs, but I didn’t miss this interesting bit about the Newton. Interesting because I haven’t considered Sculley’s angle on the Newton failure, and the fact that, in a way, the Newton project saved Apple from bankruptcy. I’ve always thought the exact opposite — that the huge money haemorrhage for Newton R&D actually led Apple on the road to ruin. Of course one can say that it’s just Sculley defending his work and his pet project…
Q: People say he killed the Newton – your pet project – out of revenge. Do you think he did it for revenge?
Sculley: Probably. He won’t talk to me, so I don’t know.
The Newton was a terrific idea, but it was too far ahead of its time. The Newton actually saved Apple from going bankrupt. Most people don’t realize in order to build Newton, we had to build a new generation microprocessor. We joined together with Olivetti and a man named Herman Hauser, who had started Acorn computer over in the U.K. out of Cambridge university. And Herman designed the ARM processor, and Apple and Olivetti funded it. Apple and Olivetti owned 47 percent of the company and Herman owned the rest. It was designed around Newton, around a world where small miniaturized devices with lots of graphics, intensive subroutines and all of that sort of stuff… when Apple got into desperate financial situation, it sold its interest in ARM for $800 million. If it had kept it, the company went on to become an $8 or $10 billion company. It’s worth a lot more today. That’s what gave Apple the cash to stay alive.
So while Newton failed as a product, and probably burnt through $100 million, it more than made it up with the ARM processor… It’s in all the products today, including Apple’s products like the iPod and iPhone. It’s the Intel of its day.
Apple is not really a technology company. Apple is really a design company. If you look at the iPod, you will see that many of the technologies that are in the iPod are ones that Apple bought from other people and put together. Even when Apple created Macintosh, all the ideas came out of Xerox and Apple recruited some of the key people out of Xerox.
Everything Apple does fails the first time because it is out on the bleeding edge. Lisa failed before the Mac. The Macintosh laptop failed before the PowerBook. It was not unusual for products to fail. The mistake we made with the Newton was we over-hyped the advertising. We hyped the expectation of what the product could actually, so it became a celebrated failure.