How the Newton saved Apple
I came across this fascinating interview with John Sculley, where he spoke candidly about Apple and Steve Jobs.
When asked about the well publicised failure of the Apple Newton, Sculley responded with something completely unexpected - it actually saved Apple.
The Newton was a terrific idea, but it was too far ahead of its time. The Newton actually saved Apple from going bankrupt. Most people dont realize in order to build Newton, we had to build a new generation microprocessor. We joined together with Olivetti and a man named Herman Hauser, who had started Acorn computer over in the U.K. out of Cambridge university. And Herman designed the ARM processor, and Apple and Olivetti funded it. Apple and Olivetti owned 47 percent of the company and Herman owned the rest. It was designed around Newton, around a world where small miniaturized devices with lots of graphics, intensive subroutines and all of that sort of stuff when Apple got into desperate financial situation, it sold its interest in ARM for $800 million. If it had kept it, the company went on to become an $8 or $10 billion company. Its worth a lot more today. Thats what gave Apple the cash to stay alive.
So while Newton failed as a product, and probably burnt through \$100 million, it more than made it up with the ARM processor Its in all the products today, including Apples products like the iPod and iPhone. Its the Intel of its day.