EO and GO To Merge

AT&T officiates at GO/EO marriage. The deal means both good and bad news for GO.

In the June 1993 issue of this newsletter (Vol. 3, No. 3), we noted how AT&T was strengthening its position in the handheld mobile computing market by acquiring equity positions in a number of key companies, among them EO, General Magic, and 3DO. AT&T continues to mine this vein in its recent move of acquiring a majority interest (51 percent) in pencentric pioneer GO Corporation. GO develops the PenPoint operating system.

In the next breath, AT&T then announced it will merge GO operations with EO. Explaining the move, an AT&T spokesperson said, “We’re going to see the hardware and software sides of this product [the EO communicator] more tightly integrated.” A spokesperson for GO added that the merger will speed up development of a more practical — and more importantly — more affordable machine. The EO communicator (which uses the PenPoint operating system running on the AT&T Hobbit processor) is priced between $2000 and $3500, far more than the recently announced $700 Apple Newton. Furthermore, the new company will have access to the might of AT&T’s research labs and marketing savvy.

That’s the good news. The bad news is that perhaps 50 percent of the 200 GO employees will lose their jobs with the merger. EO’s 100-person staff will presumably remain intact. It’s ironic that EO got its start as a sort-of hardware spin-off from GO. GO, if you recall, had a small hardware group which developed prototype pen-based systems to enable developers to get up and running with PenPoint-based systems. Upon the formation of EO, those resources shifted to EO.

A Mixed Blessing for PenPoint

But aside from the loss of jobs, AT&T represents a mixed blessing for PenPoint. While AT&T’s majority interest in GO may assure PenPoint’s survival in the upcoming pen operating system wars with Microsoft, Apple, and others, it may also prevent GO from striking deals with companies perceived as AT&T’s competitors, such as Motorola and MCI. If PenPoint is to succeed, it needs to appear on a lot of hardware platforms, not just the Hobbit and Intel platforms, particularly since Microsoft will dominate Intel-based pen systems with its own operating system. Now AT&T will dictate what platforms will run PenPoint, and that could affect PenPoint’s success in the potentially explosive personal communicator market.