Apple Reference & Presen…rary 8 (Internal Edition)/Apple R&P Lib Internal v8.0.iso/3-Presentations/Apple Computer Inc./Industry Competition/ROMs/Software/IBM licenses from Go

Text File | 1990-06-24 | 7KB | 149 lines

Confidential / Need to Know

Apple Competitive Analysis


GO CORP. LICENSES TECHNOLOGY TO IBM


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SUMMARY

This week, IBM will announce that it has licensed technology for a pen-based
computer, developed by Go Corp.  The computer probably won't ship for some
time, and we don't know enough details about it to evaluate its market impact.
However, in the meantime, IBM will use the announcement to boost its image as a
PC leader.  Go hopes to establish itself as a major system software developer,
and will use IBM's endorsement to collect other licensees.  The implication to
Apple is a near-term image boost for IBM (which we can probably counter with
the right messages; more on that below).  In the long run, Go could become an
important new competitor if it can make its product successful, but it's too
early to judge that.


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THE ANNOUNCEMENT

Go will license its proprietary handwriting-recognition software, operating
system, and associated software tools to IBM for use in one or more future
computers, according to a preannouncement briefing given to industry analysts.
This is NOT news -- rumors about IBM and Go have been circulating for months.
What changed is that Go seems to have shifted its emphasis away from developing
hardware, and intends to be primarily a system software company.  Although the
company may still make its own computer, its main goal is apparently to
establish and control a new software standard for pen-based computers without
keyboards.

IBM and Go told the analysts that the market for these machines is 15 million
to 20 million "mobile people" who work away from desks.  Insurance adjustors
and people who take inventory were two examples.  IBM's Go-based machines will
be "compact," diskless, have instant-on capability, and some sort of remote
communications function.  Users will be able to read files from desktop PCs,
but they won't be able to run standard PC applications.

Go will supply the operating system, object-oriented development environment,
and a proprietary graphical interface that can recognize "gestures" and
hand-printed letters (but not cursive handwriting).  The Go software is still
in development.

The companies said prototypes are now being tested by customers, but gave no
release date for the machine(s).  Products for languages other than English
will apparently come later, but Go and IBM gave no timeline.  The focus for now
is the US market.


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MARKETING ANALYSIS:  More confusion

The press loves to play up whizzy new technology, so IBM and Go can attract a
fair amount of attention if they want to.  If this happens, Apple should remind
the world that these technology circuses often have little long-term impact.
The rollouts of NeXT, OS/2, and even OfficeVision all failed to live up to
their hype.

Apple can also construct a compelling story about the confusion in the
IBM-standard world.  Through its agreement with Go, IBM has now endorsed a
total of nine different interfaces for single-user computers.  They include:
    • OS/2 Presentation Manager.
    • OfficeVision.
    • Windows 3.0.
    • DOS 4.0.
    • The proprietary interface built into the PS/1.
    • Motif.
    • NextStep.
    • Metaphor.
    • And, now, the Go interface.

Apple should argue that IBM doesn't really have a technology strategy, but is
just buying everything it can and throwing it at customers.  This creates a lot
of uncertainty -- IBM can't support nine different interfaces in the long run.
Customers who buy the wrong one now might have to make a painful transition
later.  By comparison, the single-environment approach of Macintosh helps
protect customers' investments.

Finally, Apple should point out that the Go/IBM deal is just vaporware.  They
don't even have a planned shipping date yet, let alone a finished product.  And
after that, Go will face a very difficult task in establishing a new computing
software standard.  Only one company, Adobe, has managed to do that recently --
and they came in through the back door.


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TECHNICAL ANALYSIS:  Too soon to tell

We don't yet have answers to several critical questions:
    • How expensive will the machine be?
    • How accurate is the handwriting recognition?
    • What is the performance?
    • Will software developers support the environment?  (So far we know of
        only one or two Go developers.)

Without this information, we can't estimate Go's chances.  There are already a
few handwriting-recognition machines on the market (most notably the GridPad
and the Canon AI Note), and they haven't set any sales records.  The key
question is whether Go can make a computer do something fundamentally new and
different.


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IMPLICATIONS

• Watch Microsoft.  Microsoft will not sit still for the creation of a new
operating system vendor.  The company is already working on its own
handwriting-recognition technology, and you can expect to eventually see a
version of Windows or OS/2 that works with a pen.  If Microsoft does a good job
with that product, the company's size and applications base will probably be
enough to confine Go to a niche.

On the other hand, if the Microsoft response is as technically inept as Windows
1.0, then Go will have an opportunity to entrench itself.


• The implications to Apple are more difficult to assess.  If Go and IBM are
correct that character-recognition PCs will be a separate market segment, then
the potential downside for Apple is only the loss of a growth opportunity
(something like what happened in laptop computing).

On the other hand, if Go really has a breakthrough in interface technology,
then it is very likely to spill over into other computing segments.  The
downside to Apple then could be the erosion of its technical leadership in
personal computing, if it doesn't match Go's technology.

We've never seen a handwriting-recognition system that really worked well, so
we're not about to panic about Go.  However, someday, somebody will eventually
get it right.  It's important not to just think of handwriting-recognition as a
technology for portable computers.  It's really a new input and interface
technology that could have broad applications throughout computing.


• Apple should also watch the public reactions to Go, to see how the world
accepts the idea of a non-standard software environment for mobile computers.
This should help indicate the level of Macintosh compatibility needed for any
mobile computing products Apple might decide to make in the future.


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