Science: Apple eyes fruits of convergence: Big players in computers, entertainment and information met in Japan to ensure they do not go in different directions. Steve Homer was there

Steve Homer
Sunday 23 August 1992 23:02

AT THE end of last month, in the beautiful Japanese hill resort of Hakone, more than 100 senior executives from some of the most powerful entertainment and technology companies gathered to talk about new media opportunities and technological convergence.

The event, organised by Apple Computer, generated little coverage. The organisers wanted a full and frank exchange of views, so the press was excluded from the discussions. A little frustrating when you have flown thousands of miles to cover the event.

Gather senior representatives of companies such as Microsoft, Apple and IBM, mix them with electronics companies such as Sony, Matsushita, Sharp and Toshiba, add giant information and entertainment companies such as Time Warner, Viacom, MTV, News Corporation, Turner Broadcasting and Paramount Communications, and sprinkle with Kodak, Hasbro (the world's largest games company), National Semiconductor, half a dozen think-tanks and a dozen multimedia producers, and you end up with a fairly heady mix.

The reason for the gathering was straightforward. For decades companies have been talking about convergence but it seems to be a long time coming. Convergence is the theory that various parts of separate electronics-related industries will come together, creating new markets and generating huge profits.

The most talked about in the Eighties was the joining together of the telephone and the computer. The world's largest computer company, IBM, in fact bought a major telephone exchange maker, Rolm, but sold it this year at a loss. Others followed the same path but there was little sign of the expected bonanza.

However, computers and telephony did come together slowly in a few areas. Connecting one computer to another with a modem is now commonplace and nearly all telephone exchanges installed recently in developed countries use digital technology, which is essentially computer technology. But the huge economic benefits the coming together of these two industries was supposed to bring, the synergy of computing and telephony, failed to materialise.

Talk of convergence is once more in the air. Again, the computer companies seem to be at the heart of things, but this time they face an excess of


Television and computing are coming together in domestic multimedia machines such as CD-I, in which images, video, text and sound are read off a compact disc.

At the same time, cable television and computing are coming together in interactive systems. IBM and Time Warner, the world's largest computer company and the world's largest entertainment company, are working behind closed doors on interactive cable television systems that will allow films to be downloaded at a viewer's request. The system will use IBM's expertise in video compression to reduce the amount of data that has to be sent down the cable and Time Warner's knowledge of the cable television industry.

Many believe there will be new opportunities in digital television, likely to go live in the US before the end of the decade.

On a completely different tack, Sony has its Data Discman, which can read text and graphics from tiny CD-type discs. This is doing well in Japan, with encyclopaedias, guide books, language dictionaries and many different titles already available in English. A wave of similar products seems likely.

There is endless potential for these products. Wherever you look you see computers or computing techniques leaving the office and creating new industries - and the computer companies are keen to find a new niche.

Probably the most aggressive mover in this field is Apple. It has ambitious plans to turn itself from a computer company into a company predominantly active in the consumer electronics sector. It does not primarily want to make products itself; rather it wants to write the sophisticated software that controls these devices.

Apple has already announced that next year it will launch a device called Newton, which will be made by Sharp in Japan. Newton will be the size of a paperback book and will combine the functions of a pocket computer, a personal electronic organiser and more. It will also feature sophisticated communications options allowing it to send faxes, dial into other computers and communicate using wireless telephone technology.

Users will be able to add in modules using credit- card-sized computer cards, which can contain massive amounts of data ranging from airline timetables and encyclopaedias to city guides.

Newton, Apple believes, will be the first of a new generation of devices it calls Personal Digital Assistants. The Newton user will write on a screen and the device will interpret the commands intelligently. Where such a device will differ from today's sophisticated electronics product is that as it is used it will 'learn' more about its user, and so become an assistant, rather than simply a tool.

For example, Newton will quickly learn that an appointment for lunch normally means between 1 and 2pm, and will book this time automatically when a lunch appointment is made. More important, it should learn to interpret commands such as 'find a good, fairly cheap Greek restaurant in Soho' when a card carrying a London restaurant guide is inserted. It will look up food ratings, prices and locations and then offer suggestions. If it finds a possible restaurant just outside Soho, it may also suggest this - not something a traditional, rigid computing approach could manage.

While Newton remains very closely related to a computer, Apple is developing its second PDA, called Sweet Pea, with Toshiba. Sweet Pea will - like Philips's already launched domestic multimedia product, CD-I - use CDs to store text, data, sound and video

to be played back under the user's control.

Few details have been released about this product, but it will use multimedia software developed by Kaleida, a joint company set up by Apple and IBM, and may well use intelligence 'tricks' to allow users to obtain more from their discs than they expect.

But while the hardware is one side of the equation, the information - the software - is the other. Companies such as Viacom, Time Warner and News Corp have massive libraries of photographs, moving images, text and sound, which they want to earn them money in this information-rich world.

They have also diversified into related technologies, with everything from satellite and cable television operations through to book publishing and excursions into the multimedia businesses.

There is a third dimension to add to content and retrieval technology - delivery. There are already the avenues of telephone, television, cable, CD, computer disc and satellite, but many others will emerge in the next few years.

This leaves the various industries with a mind-bending array of opportunities and options. But this is likely to mean many companies going in different directions.

Apple and a number of others believe that convergence is once again in danger of being a wasted opportunity as each company goes its own separate way, fragmenting a market that many believe could be worth billions in just a few years' time.

That is why Apple set up the Hakone Forum, which most participants felt was a great success. The hope was that by bringing such a broad, disparate group of senior executives together in an informal setting, everyone involved would get some idea of where the different players were heading and alliances, agreements and eventually standards could be forged to avoid wasted effort.

While few concrete deals came out of the mountain mists, at least the talking has started.

(Photograph omitted)

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