Roman Pixell Why Apple's Newton failed in the market place, a retrospective

Background

As many years after the Newton's demise as the Newton actually was in production, there is still a strong user community that promotes the use of the green PDAs. Even though the members of the community still are developing their devices and are finding new use for the old technology, Apple Computer seems to have lost interest in the knowledge generated over the years. From a marketing perspective, this is noteworthy for a couple of reasons. First, there is likely something to be learned in how the manufacturer and innovator failed to market the product, while the community of users was able to keep it alive.

Second, it seems odd not to use the feedback from the users in order to develop new products.

Research aim

This paper is a précis for research that will be performed during the autumn by Professor Albert Muniz (De Paul University, Chicago, Il., USA) and Roman Pixell (Stockholm School of Economics, Stockholm, Sweden). The writers aim to present an article interesting and informative enough to be used as a reference case study for marketing courses at DePaul, SSE and other business schools. Also, the writers intend to submit the final paper to the Journal of Interactive Marketing by the end of the year.

Purpose of the study

The purpose of a case study is to explore the strategic and tactical issues facing a firm in marketing their product. The aim is to learn from this exploration in order to apply the knowledge to future marketing and business decisions. Thus, it is desired to explore the case history of the Apple Newton Project with an eye toward developing insights from which we can generalize to situations facing other companies as they introduce a new technology good. Also, the writers will try to explain how this particular case differs from other market failures and identify insights that are non-applicable for a wider generalization. The final product, or case study, is thought to be suitable for marketing classes studying technology design innovation, the marketing of disruptive technologies, as well as consumer behaviour.

Focus of the case study

The writers will explore the process by which the Newton was launched, marketed and developed, in order to look for places were Apple missed opportunities or chose a suboptimal strategy. User value aspects will be studied in order to understand what value proposition the Newton MessagePad product line had, how the users changed the value proposition and what variables would have needed to be altered in order to have achieved a larger impact on the market.

Hindsight is 20/20, so it can be easy to dismiss the insight of a historical case study. There is, however, an additional interesting variable in this particular case: the Newton community has succeeded in keeping the Newton going for a longer period of time than Apple did (1997-2004, vs. 1993-1997). Not only has the community supported the brand for several years in the absence of support from Apple, it has innovated and extended the brand. The user community has developed into an open-source community and picked up where Apple left off and has done a very successful job in extending the usefulness of the product by adding new software, hardware and services.

Next Steps

In order to write an effective and compelling case study, the writers will need to gather both first-hand information on consumer aspects, as well as documented conclusions about the marketing failure. Some of this information can be obtained from historical documents and some will require interviews with various members of the Newton community. In particular, the community will be invaluable in helping identifying the "mistakes" Apple made as they developed, launched and marketed the Newton, but also after the products demise.

The research process will be complex as there are likely to be conflicting views on many issues. It is hoped that the WWNC can be a good starting point for gathering some of the ideas that the community deems to be the most important for explaining the market failure.

Slides

While still being a student (in Marketing), Roman Pixell also is a freelance reporter specialized in the Mac and in Wireless and Handheld technologies.