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GREAT COMMUNICATOR Hybrid of laptop function and pen-based technology


San Jose, Calif.--The product has scarcely been invented, yet already it is the talk of Silicon Valley insiders and has set off a

race to capture a potentially vast market.

It's called a "communicator," and while difficult to describe, the device is spurring feverish work at two valley companies, each of which has an impressive management team, well-regarded technology and access to some of America's and Japan's deepest corporate pockets.

These future competitors, Eo Computer Inc. of Foster City and General Magic Inc. of Mountain View, also have a penchant for secrecy and are staying tight-lipped about their plans at this point, still a year or more away from product introduction. As a result, communicators have become the kind of much-discussed mystery products that can be one of the great treats of Silicon Valley life.

But people with close ties to the firms have described the products and the role they might play in computing.

The boundaries between these new communicators and more traditional computers are fuzzy -- and may well grow fuzzier as computer companies change their marketing tacks to stress whatever communicator-like functions their products have.

The two communicators being developed are expected to be small, light, easily portable devices that eschew traditional keyboards in favor of a special pen. Some have compared them to Etch-a-Sketch games, in that the screen will fill up most of one side of the product.

Rather than being designed for the kinds of word-processing or spreadsheet functions that are common on desktop -- or even laptop -- computers, these new machines are targeted at the communications needs of their owners and are intended to become indispensable for people on the go.

They will allow them, for example, to send and receive faxes, to pass along E-mail, to fetch digitized voice mail and beeper messages, and to tap remote computer data bases.

The machines will have the kinds of calendar, note pad and address book capabilities of the pocket organizers from Japan that have gained widespread acceptance in recent years.

And they are being designed to communicate easily with the owner's desktop computer, so that work done on one system can be transferred to the other.

First generations of these machines aren't expected to have cellular telephones inside of them because of the phones' relatively high power requirements. But that feature is expected eventually, giving the devices true portability. Until then, owners will have to hunt down a telephone jack.

What's most striking about these new devices is that they are being targeted at a far broader audience than those envisioned by traditional computer makers. In fact, Apple Computer Inc., one of the principal investors in General Magic, considers the company part of its foray into consumer electronics.

"The average real estate agent would never buy a lap-top computer but will want one of these," said one person familiar with the devices.

And to reach millions of owners, the units are being built with an eye to price. At Eo, for example, engineering decisions were described as extremely cost-sensitive, as the eventual goal is to have a machine that costs close to $500.

That's substantially below the $3,000 to $5,000 that a second wave of pen-based computers is expected to cost when it begins shipping in a few months. Unlike the communicators, though, this upcoming batch of machines, from such companies as IBM and NCR, will act much like traditional computers, except with a special stylus as the input device.

Eo is Latin for "go," and the company has close ties to Go Corp. of Foster City, which has developed PenPoint, an operating system for pen computers. Some of the people who founded Eo last year are from Go, and they are taking PenPoint and optimizing it for communications work.

Eo is headed by Bernard J. Lacroute, a veteran of Sun Microsystems Inc. British entrepreneurs with ties to that country's Acorn computer company are also involved, and much of Eo's hardware design is being undertaken in England.

AT&T;, which developed a close relationship with Mr. Lacroute when it invested in Sun, is a major investor in Eo, as is the esteemed venture capital firm of Kleiner Perkins Caufield & Byers, where Mr. Lacroute worked after Sun.

AT&T; is not only giving Eo cash but is also swinging open the doors of its well-regarded research operations. As a result, Eo will be using a microprocessor developed at AT&T; that uses very little power. It also has access to AT&T; chips that will be the basis for a future internal cellular phone.

The team at 18-month-old General Magic includes veterans of the initial Macintosh design project, and its engineering efforts are described as much more ambitious than those at Eo, encompassing such things as a new operating system and new communications software.

Apple's involvement in General Magic stems partly from the close personal relationship between Apple President John Sculley and the company founders, especially Bill Atkinson, a former Apple Fellow. Apple stands to benefit, too, because General Magic is expected to use much of Apple's HyperCard control program, which would extend Apple software to a new group of products.

Besides Apple, General Magic has Motorola Inc. as a partner, allowing to it make use of that firm's microprocessor cellular technology. Sony Corp., with which Apple is working closely on consumer products, is also reported to be a General Magic investor. General Magic officials have also had serious discussions with AT&T;, as the telephone company is apparently interested in the communications work being done there.

While Eo's first product is expected at the end of the year and General Magic's sometime in 1993, a number of important business questions at the companies remain undecided.

At Eo, for example, the company has yet to determine if it will license its technology to other firms, in order to foster broad product acceptance by way of the clone phenomenon that occurred with the IBM Personal Computer. And a number of manufacturing questions at General Magic -- such as who will actually make the device -- are said to be still unresolved.

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