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DON’T WRITE OFF THE MESSAGEPAD

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A year after it launched its long-awaited and much-maligned Newton MessagePad, Apple Computer Inc. thinks it now has it right.

The hand-held, pen-based computer lampooned for fussy handwriting recognition and other flaws has been improved. The company also has changed its marketing strategy, going after businesses as well as individuals."The level of awareness is going up, and people's understanding of the use of this product is going up. We're really encouraged by that," said Shane Robison, vice president of engineering of Apple's Personal Interactive Electronics division, which is responsible for Newton.

Some of the problems facing Newton have also affected competitors trying to sort out the evolving technology for go-anywhere computing and communications devices.

Last month, for instance, AT&T Corp. closed EO Inc., a subsidiary that created and sold a clipboard-sized computer and telephone. Less than 10,000 were sold since its introduction last summer.

Compaq Computer Corp. has shelved plans for a similar pad-sized device. Motorola Inc. has postponed sales of its Envoy portable communicator until later this year. And Apple reportedly postponed plans for versions of Newton in different shapes than the current palm-sized product.

Analysts had forecast Apple would sell 150,000 Newtons in the first year. The company will say only that it sold 80,000 through December. Sales are believed to have stalled after that.

Some analysts say Newton costs too much, is short on ability to connect with other computers and suffers from a stubbornly bad reputation.

"It was a crippled product when it was first introduced. It was overpriced and underdeveloped," said Bruce Lupatkin, an analyst with Hambrecht & Quist in San Francisco.

"It's hard for any new product to overcome what feel like serious if not critical flaws in its first introduction," he said. "I don't think Newton has been able to overcome these."

Still, he and others believe Newton can be a success if Apple continues to improve it and focuses on businesses needing small machines for such specialized tasks as consulting medical records, checking inventories and tracking deliveries.

"I was originally quite skeptical about the product," said Mark Hall, editor-in-chief of MacWeek. "But it will be, I think . . . successful in certain corporate environments."

After more than a year of fanfare, Apple started selling Newton exactly a year ago this week. It was the company's first major new product line since the introduction of the Macintosh personal computer in 1984.

The product's bad reputation stemmed from the big gulf between hype and performance, particularly in handwriting recognition.

Newton often got names wrong, mistook numerals for letters and required time to get used to a person's writing. The comic strip "Doonesbury" made fun of the machine's dyslexia.

In addition, it was initially priced at $699 and could not talk to other computers. Analysts also fault Apple for initially emphasizing individuals rather than the business market.

While the technological vision may have been fine, the product itself was "wholly mispositioned," Lupatkin said.

"The Newton is new technology, and new technology is not immediately sucked up by the mass market," Hall said.

But earlier this year, Apple introduced a new model. The revised Newton is better at reading handwriting, has more memory and improved communications ability with optional software letting it exchange information with a personal computer, a fax modem and a messaging card. It lists for $599.

"I think ... consumers are learning, and we learned and addressed some of the issues," said Steve Capps, the chief software engineer for the Newton and a key figure in the development of Apple's Macintosh.

The company says there are more than 40 programs for individual users and scores more in existence or under development for specific corporate use, a market Apple is courting more aggressively.

Asked whether Apple should have skipped the first Newton and instead begun sales with the current version, Capps said it was more important to get Newton on the market and respond to feedback.

"You learn much more from a real customer than you do just thinking about it," Capps said. "There's never a final product."