PENPOINTING Go to introduce software for pen computers

April 06, 1992|By Ken Siegmann | Ken Siegmann,San Francisco Chronicle

For more than a year, the idea of using a pen, instead of a keyboard, to operate a computer has generated dozens of conferences, hundreds of news stories and millions of dollars in venture-capital investment.

But so far there have been few products and little revenue because key companies designing the software to run so-called pen-based computers haven't finished their work.

That should change on April 16, when Go Corp. ships its PenPoint software. The first product from the closely watched start-up company that pioneered pen computing will come on the heels of Microsoft Corp.'s release today of a new version of its popular Windows software that also will run such computers.

These new machines let people use a special pen to start programs or manipulate data directly on the computer screen. The manufacturers expect they will be bought up by insurance adjusters, housing inspectors, or almost anyone who processes data standing up.

Despite all the hype, the market has yet to take off. Only a handful of manufacturers -- notably Grid Systems Corp., Momenta Corp., and NCR Corp. -- have introduced pen computers. But almost every major personal computer maker, including International Business Machines Corp., Compaq Computer Corp. and Apple Computer Inc., is working on one.

The new products seem trapped in a chicken-and-egg dilemma.

"There was no point in shipping the software before the hardware was available," said Go Chairman Jerry Kaplan.

On the other hand, Grid President Bruce Walter said hardware manufacturers have delayed introducing their products while waiting for Go and Microsoft -- both behind schedule -- to finish the software.

Go introduced PenPoint with much fanfare in January 1991 after three years of development. It was one of the most publicized developments in the PC industry since Apple came up with its easy-to-use Macintosh computer eight years ago.

Founders Mr. Kaplan and Robert Carr, along with then newly recruited president and former Apple executive William Campbell, promised to finish PenPoint by last December. Then they said it would be ready in the first quarter of 1992.

Despite the delays, hardware and software makers agree that the pen computing market will flourish once the software arrives.

William Lempesis, editor of PenVision News, a Pleasanton-based computer industry newsletter, expects the domestic pen computing market to mushroom to $1.3 billion this year from $225 million last year. By 1995, he expects it to hit $12.7 billion.

Even with $50 million in venture-capital financing, Go faces a significant challenge from Microsoft, the world's largest independent software maker, with sales of $1.8 billion last year.

"The key is the quality of the product," Mr. Kaplan said.

He admits that Go lacks Microsoft's considerable marketing muscle. Instead it is counting on users and hardware manufacturers to compare PenPoint and Windows and decide that Go has a superior product.

Go also hopes that customers will think that Microsoft isn't really committed to pen computing because Windows is principally designed for desktop computers that use keyboards. The pen capabilities are added.

"Pen Computing is not a priority for Microsoft. It's just a way to help them sell Windows in the desktop," Mr. Kaplan said. "Pen computing is the lifeblood of Go."

Pradeep Singh, Microsoft's manager of pen computing, bristled at that statement and accused Go of rushing PenPoint to market this month because Microsoft is shipping the new Windows.

Although the competition is expected to be heated, executives and analysts believe the market will be big enough to accommodate both companies, and other rivals.

Initially, however, the producers of applications software for pen computers are almost exclusively designing products that work with PenPoint or Windows.

Vern Rayburn, chairman of Slate Corp. of Scottsdale, Ariz., which makes such software, expects Go and Microsoft to split the market about 50-50 in the next year.

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