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Date: Sun 01-Feb-1991 22:15:08 From: jclee@cory.berkeley.edu (James C. Lee) Subject: NeXT on Wall Street Journal 2/1/91 The following article was on today's wall street journal: ---------- NeXT Scores Big With Campuses On Second Try By G. PASCAL ZACHARY Staff Reporter of THE WALL STREET JOURNAL Don't count Steven Jobs out just yet. His closely held personal computer company, NeXT Inc., was written off by most competitors after its first product flopped two years ago. But now, his la- test computers are selling briskly on college campuses, seeming to fulfill a goal he set five years ago when he stepped down as head of Apple Computer Inc. Mr. Jobs, who helped to pioneer personal computing when he ran Apple, started NeXT with the idea of supplying college educators and students with an advanced computer capable of mixing huge amounts of audio, video and text. Mr. Jobs, himself a college dropout. vowed to deliver the electronic equivalent of an entire library of English literature or a sophisticated chemistry lab. But his original machine bombed because it lacked power and software application and, at $6,500, was too expensive. Mr. Jobs. who oversaw the creation of Apple's novel Macintosh computer, seems to be showing signs of his old spark. NeXT's newest models, which began rolling off the assembly line late last year, contain state-of-the-art hardware and sophisticated software. They are selling to students and faculty for as little as $3,000, less than half the price of the original machine and much less Steven Jobs than comparable computers sold by rivals. NeXT's latest models haven't sparked as much enthusiasm in the corporate market, which is crucial to long-term success. "We haven't felt the impact of those new products yet," said a spokesman for Businessland Inc., which is NeXT's main distributor to corporations. Still, Mr. Jobs said that half of 4,000 new models he's shipped in the past two months have gone to business. While those unit volumes are just a fraction of Apple's monthly sales, Mr. Jobs said NeXT is posting monthly sales equivalent to an annual rate of more than $100 million. Vicki Brown, an analyst at International Data Corp., thinks NeXT is on target to sell from 36,000 to 44,000 units this year. University customers are the most eager buyers. Mr. Jobs has deep ties with academics from his days running Apple, the longtime leader in the education market. Some, who have stuck with Mr. Jobs through his recent ups and downs, say he is making good on his vow to set a new standard for academic computing. "I think he has met many of his original goals, '' said Brian Hawkins, vice president for computer ser- vices at Brown University. He said purchases of NeXT machines by Brown staff and students "have picked up considerably" in recent months. "NeXT finally has the machine it promised; that's fan- tastic," added Edward Barboni, vice president of information at Allegheny College. He thinks NeXT has staying power. "We've had opportunities to peek at NeXT's future products," he said, ad- ding, "What's coming down the, pipe is more good stuff." Such praise is good news for Mr. Jobs, but he acknowledges that. parts shortages have prevented NeXT from taking full advantage of the situation. Shipments of the latest models were first held up by Motorola Inc. which makes the 68040 central processor for the machines. Then, output was slowed when the hard-disk drives used in the flagship model proved defective, forcing NeXT to switch suppliers. The limited availability of product has cost NeXT. "People have been holding off buyings because delivery times are so far out," said Chester Rice, who manages the computer store at Stanford University. Mr. Jobs acknowledged that NeXT hasn't been able to meet demand, but said the company has solved its supply problems and now is reducing its backlog. NeXT is facing bigger obstacles selling to corporations. Mr. Jobs had bet that Businessland Inc., one of the largest computer dealers, could carry most of the sales load, but the move hasn't panned out and last September NeXT said it would be- gin looking for additional sales help. He declined to discuss plans, but he confirmed that he recently signed pp Computer Attic, a retail chain in Northern California. Nevertheless, NeXT may continue to find big business a hard sell. NeXT computers run software that isn't compatible with programs written for any other leading brand of computer; while the number of NeXT applications is growing, only a few of the most popular programs run on the machine. As a result, the new models aren't "an instant hit with business," said Walter Feigenson, manager of special products at Ashton-Tate Inc., which sells a spreadsheet for NeXT's computer. That's tough. because Mr. Jobs needs his machines to win wide ac- ceptance quickly to keep pace with stalwarts such as Internation- al Business Machines Corp., the largest supplier of desktop com- puters, and younger, friskier rivals such as Apple and Sun Mi- crosystems Inc., both of whom are gaining market share by the month on the strength of new models. 'A lot of people are still taking a wait- and-see attitude," said Jerome Smith, director of workstations at the University of California, Berkeley, adding, "People want to see what happens to the company." Mr. Jobs still might receive a boost from IBM, which several years ago licensed NeXT's basic software with a notion of offer- ing it with IBM-made computers. At the time, some people specu- lated that IBM might "anoint" NeXT's software as a standard for a certain class of personal computers called workstations, but so far IBM hasn't released its own version of NeXT's software. James Cannavino, who heads IBM's desktop computer business, says IBM is still studying NeXT's software and has yet to poll customers on whether they would buy an IBM version. All this adds up to a promising, but still inconclusive year for Mr. Jobs, who has plenty of cash on hand-Canon Inc. invested' $100 million in NeXT 18 months ago-but not as much patience. After Christmas, he issued a stern message to his staff, urging them to redouble their efforts and postponed the company's annual "retreat" to a seaside resort. Mr. Jobs says he hasn't tired of the computer industry, and isn't daunted by intensifying competition. "I've spent my entire adult life making computers," he said. "I love it. It's in my blood." ---------- NeXT is making it! James
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