Business

Technology

Chaos and Costly Solutions at Seybold Show

Don Clark
The San Francisco Chronicle

September 15, 1988

Steve Jobs yesterday proposed two solutions to help straighten out the chaos that intensified in the computer industry this week. But he also raised questions about the price tag on the computer he will unveil October 12.

The 33-year-old entrepreneur devoted a brief public appearance at the Seybold Desktop Publishing Conference in Santa Clara to extolling the operating software Unix and Adobe Systems' Display Postscript software for managing video screens. Both are key elements of the long-awaited system from Jobs' Next Inc.

But the former Apple Computer chairman also noted that the two elements each require an additional one megabyte of memory and more processing power, each adding about $1,000 to the price of a personal computer.

"It's about a $2,000 price increase to get aboard the 1990s," Jobs said. The penalty for those who don't pony up the money, he said, is the likelihood that technical advances involving Unix and Display Postscript will lead customers to junk all their software in the next two years.

Jobs-watchers see a subtle message about how cheaply he can sell his new machines. Early estimates suggested a $3,000 to $5,000 discounted price on the systems; a source yesterday put the current base price closer to $6,000.

"Basically he's saying you will be paying for the right to get all these goodies," said Stewart Alsop, editor of PC Letter.

Jobs, though more than a year late for his machine, has gained credibility in the past few weeks with rumors of a deal to license Next's computer interface technology to giant IBM for its PC RT. A source at the Seybold conference estimated Next was paid a fee of $1 million to $2 million to create a version of its interface for IBM, and the company will receive a percentage of IBM's royalties on future sales of the product.

Apple, meanwhile, yesterday retracted statements that it could still raise a legal challenge to Next's machine under a 1985 settlement over Jobs' departure from the company. "In January 1988 we reviewed a working prototype of the Next machine and concluded it did not infringe upon any of Apple's trade secrets," Apple spokeswoman Carleen LeVasseur said yesterday.

MCNEALY'S VIEW

Unix, which controls a computer's basic functions, has been gaining popularity because it promises to allow the same applications software to run on many different vendors' machines. Its most influential backer has been Sun Microsystems, which is working with Unix inventor American Telephone & Telegraph Co. to create a standard new version.

Their effort was deemed so potent that nearly every other major computer vendor started a rival gang called the Open Software Foundation to create its own software standard.

Sun chief executive Scott McNealy used the Seybold forum partly to take potshots at OSF, and at Apple for bucking the trend toward standards. The latter's recent price increase, he said, demonstrated the power over customers of a company like Apple that uses proprietary technology.

"That can't last over the long term," McNealy argued. "If we can get DRAM (memory chips) at reasonable prices I think we will be even more aggressive in pricing over the next 12 months."

On other issues, McNealy:

-- Signaled that an end to the feud with OSF is likely soon, and AT&T and Sun may even join the OSF consortium once the group's members agree. "I'd love to see it happen," he said in an interview. "OSF has to decide if they really want to be different or the same."

-- Hinted that his company soon would begin selling through retail channels for the first time.

-- Subtly suggested that Sun may become greater competition for firms like Adobe by supplying type font products. In early September, Sun bought a privately held company called Folio Inc. that makes technology for creating fonts of different sizes, using a variety of formats.

ADOBE'S APPEAL

John Warnock, Adobe's chief executive, issued a passionate appeal for companies to cease the increasing splintering over hardware and software standards. The net effect of this trend - demonstrated this week when IBM Corp.'s competitors advocated a competing personal computer architecture - is customer confusion.

"The current state of affairs is just awful," Warnock said. "It is pathetic."

Warnock's goal is the ability to use the same application software on an IBM, Macintosh or Unix-based machine. But the situation today, he suggested, is like being able to play a Beethoven symphony on one set of stereo speakers but not another.

Adobe struck a blow toward Warnock's goal by announcing an IBM version of its popular Illustrator software, which has been available on the Macintosh. The product is expected to ship by the end of the year and will retail for $695.

Adobe also offered for the first time a major collection of all 300 of its typefaces on a single rigid disk drive. The set, called Adobe Font Folio, will sell for $9,600 and will begin shipping in November.

BHANDARI'S REPLY

A note separate from Seybold: A target of a recent suit by National Semiconductor Corp. yesterday issued a strong denial of any wrongdoing.

Narpat Bhandari denied National's charge that he stole proprietary documents from Fairchild Semiconductor, which was purchased by National, to use at a subsidiary of Cypress Semiconductor called Aspen Semiconductor. Fairchild reviewed and approved all documents Bhandari took, he said.

"I intend to fight until I am vindicated," he said.

National also sued Cypress and Aspen, which also deny wrongdoing. Bhandari said he leff Aspen because of unrelated disagreements with Cypress chief executive T.J. Rodgers.

PHOTO (2); Caption: (1)Steve Jobs, (2) Scott McNealy