Jobs's New Computer Off to a Sluggish Start
By Andrew Pollack
The New York Times
SAN FRANCISCO, Jan. 19, 1990 -- Some people are beginning to wonder whether Steven P. Jobs, the boy wonder of the computer industry, has lost his touch. The new computer offered by Next Inc., the company founded by Mr. Jobs after he left Apple in 1985, is off to a sluggish start in sales, according to industry executives, analysts and computer users.
Still, almost everyone interviewed said it was too early to determine how the machine, which has such innovations as a high-capacity optical disk and the ability to play high-quality music, would ultimately do in the market, and whether Mr. Jobs, 34 years old, would lose his status as the computer industry's young visionary.
Many potential customers who have bought only a handful of the machines, introduced 15 months ago, are still evaluating them and could place big orders later. Also, new software for the work station and hardware improvements are not expected until later this year. Moreover, analysts say, even the Macintosh, the trend-setting machine that Mr. Jobs developed at Apple Computer Inc., took two years to become a really big success.
Nevertheless, executives and analysts say sales of the sleek, black Next computer have been disappointing. That became most clear a week ago when Businessland, the exclusive retailer of Next machines, said it had sold only hundreds of the machines by the end of 1989.
Next is ''not doing as well as I might have hoped or as they might have hoped,'' said Stephen Wolfram, president of Wolfram Research Inc., a company whose Mathematica software is included with every Next machine.
Mr. Jobs, who co-founded Apple when he was 21, remains unruffled, attributing any disappointments to the fact that basic software for the computer was not finished until September, three months behind the timetable announced when the machine was introduced in October 1988.
''Given the fact that we were 90 days late, I'd say we're doing even a little bit better than we expected,'' Mr. Jobs said in an interview at his company's new headquarters, near the port in Redwood City, Calif., south of San Francisco.
Like the computer, which is a black cube, the headquarters show Mr. Jobs's obsession with stylish details. Everything in the building is gray and black, staircases seem to float and tinted-glass doors lead to the bathrooms.
Mr. Jobs said the company had sold 5,000 to 10,000 machines. Given Businessland's statements, most of those sales would have had to be to universities, to software developers, and to Canon, the Japanese distributor.
One industry source said that he believed the company sold about 6,000 machines in 1989 and that its sales rate of a few hundred machines a month appeared to be rising slightly. Such a sales figure would actually be quite respectable for the first year for a manufacturer of expensive computer work stations, but it was less than half of the ambitious goal Next set for itself, he said.
Mr. Jobs said Next was negotiating a handful of deals for purchases of several hundred machines and a few others involving 50 to 75 units each. But he was unable to mention any large sales.
A Versatile Machine
The computer, which sells for $10,000 to businesses and for $6,500 to universities, is often described as a sexy machine with many innovations. It has easy-to-use features like the Macintosh but uses a version of the Unix operating system, which is powerful but considered hard to use on other machines. It has a high-capacity optical disk that can even store the complete works of Shakespeare and other references and make them available at the touch of a few keys. It can easily record and play back speech and music.
The machine also has tools that make it easier for people, even those with little computer training, to write and customize programs for it.
But the weaknesses of the machine have also become evident. It cannot display color images. There is no disk drive to accept the floppy disks on which software is normally distributed. And it is too expensive if all one needs is a basic personal computer.
Finally, the machine is extremely slow, partly because of the optical disk and partly because the machine's Motorola microprocessor is too weak to handle all the jobs asked of it. ''It's too much software pushed into too little hardware,'' said William Y. Arms, vice president of academic services at Carnegie-Mellon University, which has bought about 50 Next computers.
Style vs. Speed
An emphasis on style over speed also characterized the Macintosh and could determine to whom the machine will appeal. Jeff Faust, a programmer at the Ohio Supercomputer Center, said he and some colleagues had bought Next machines to use at home because they were relatively compact and easy to set up. But in the office, he said, they use Sun Microsystems work stations, which are faster.
At universities, Next's initial market target, opinion has been mixed.
Allegheny College, in Meadville, Pa., has bought 42 machines and is buying more, in hopes that the software tools will allow professors who are not computer programmers to develop software for their courses. ''The technology has exceeded what I thought it could do in the service of our curriculum,'' said Edward J. Barboni, vice president of planning and information at the small liberal arts college.
But on other campuses the Next machine seems to have caught on only in the music department, where its audio capabilities give it an edge over other computers in the playing and editing of music.
'Just Hasn't Hit Home'
The University of California at Berkeley has about 20 machines, most purchased more than a year ago, said Richard J. Fateman, chairman of the computer science division. ''A year is enough time to evaluate the system,'' he said. ''It looks like it just hasn't hit home.''
Another university, Case Western Reserve in Cleveland, has not bought the machines at all, partly because software is not available yet. ''Given the price, it's undervalued'' compared with other work stations, said Raymond Neff, vice president of information services.
Even Carnegie-Mellon, which owns a small stake in Next, is not fully committed to the computer. Until more software becomes available, ''We don't feel confident in recommending it to our campus in a wholehearted way,'' Mr. Arms said. But he said he was becoming more encouraged about the machine's prospects.
It is not clear that the Next computer has all the ingredients that made the Macintosh successful. The Macintosh represented a big leap over the other computers of its day in one important area - its mouse controller and the graphical symbols on the screen display, which made it easier to use. It is not clear yet that any of the innovations in the Next machine are as significant.
Even with the Macintosh's major selling point, three things had to happen before the machine caught on. First, a lot of software had to be developed for the computer. Second, the machine's speed and power had to be increased and the ability to display color images added. Third, a popular use for the Macintosh emerged that was not possible on other computers at the time - desktop publishing.
Next needs the same three ingredients, analysts say. The company should be able to take care of the hardware problems. It has already added a magnetic hard disk to supplement or replace the slow optical disk. Later this year it is expected to introduce circuit boards that will allow color images. And it is expected to introduce a model that will use the Motorola 68040 microprocessor, the more powerful successor to the 68030 chip in the existing machine.
Software on the Way
Mr. Jobs said many software programs would also be available this year. Indeed, many software companies, with the notable exception of the industry leader, Microsoft, have said they would work on Next programs.
Next month, the International Business Machines Corporation is expected to introduce work stations that will offer Next's screen display as an option. That could add a stamp of legitimacy to Next's machines. But it is still unclear how strong I.B.M.'s support for Next's screen display will be.
It is also not clear whether any application will propel Next's sales as desktop publishing did for the Macintosh or the Lotus 1-2-3 spreadsheet program did for the original I.B.M. personal computer.
Right now, Next is advertising the machine as useful for desktop publishing of documents that are longer than those generally produced with personal computers. Another possible application discussed by Mr. Jobs is electronic mail through which people can send not only text but also voice messages from one computer to another.
New Distribution Plans
Analysts say Next is also likely to try to expand its distribution to Europe and beyond Businessland in the United States.
Next, which is privately held and received a $100 million cash infusion from Canon and a sizable advance from I.B.M., has enough financial stability to wait the year or two years it will take to really tell.
There are a few signs of progress. ''Sales have been gaining steam,'' said Steve Kirsch, vice president and founder of Frame Technology.
Mr. Jobs speaks confidently. ''Give us another six months and then come back and ask us,'' he said. ''I think you'll be impressed.''
GRAPHIC: Photo: Steven P. Jobs, founder and president of Next Inc., with the prototype of his Next computer, whose sales are said to be off to a sluggish start. (AP)
Copyright 1990 The New York Times Company