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Technology Stocks : General Magic -- Ignore unavailable to you. Want to Upgrade?

To: Lhn5 who wrote (7323)	11/22/1999 2:39:00 PM
From: dgurgel	Respond to of 10081

Someone emailed me and asked about Magic Cap, General Magic's main product from its founding in 1990 until 1996. All of the following are just my opinions. Magic Cap OS (operating system) was the reason for GMGC's founding. In 1990, John Scully, CEO of Apple, had two skunk works doing small handheld things. One, Magic Cap, was very communications centric; the other was the Apple Newton. Scully gave the nod to Newton but liked both. He kicked the Magic guys out the door but provided major support. General Magic came out with Magic Cap on a Sony handheld and on a similar, but wireless, Motorola handheld in 1994. These were consumer machines (Newton size) with built-in modems and a connection to an AT&T service that provided email and shopping (never implemented) to the Magic Cap platform. AOL was also a partner, and its mail service was an alternate to the AT&T service. Magic Cap was highly regarded for its technology which was very object oriented and very user friendly. A Magic Cap discussion group continues on the web to this day. By 1996 Magic Cap had failed (and so had Newton). The Data Rover division of General Magic kept Magic Cap going for vertical markets. GMGC just got rid of Data Rover; see the 10K. General Magic had several 100 million in funding from Sony, Motorola and other big names. As Magic Cap failed, Markman came in during 1997 and lead a reorganization around voice technology. General Magic is like a small PARC (Xerox's Palo Alto Research Center). Great technology but too far ahead of the market or in any case unable to execute a marketing plan. Portico and myTalk are excellent and GMGC has some agent technology with origins in the Magic Cap days that is very promising too. The GM deal certainly confirms the quality of the GMGC technology, since certainly GM did due diligence. However, the auto market, in my opinion, is only a niche. GMGC's fortunes are best to be found as a partner with the telcos and with the Internet portals. A successful launch with Bell South and then other telcos is the most likely bet. A grand slam by linking with AOL (who was a partner on Magic Cap) is a nice long shot bet. (I see a parallel to AOL's acquisition of ICQ.) Look at the General Magic web site. Review the profiles of the executive and board. It looks like Lucent and the telcos. Read the 10-Q filing, available in the investor section of generalmagic.com. In summary it says to me that they are just about out of gas, but, oh my God, they just might make it. Good luck! Dave Gurgel