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Price was it's downfall, today's manufacturer has to deal with even more of that popularist spending stinginess. 'Me want all for nothin' The Newton was 700bucks at the time, I'd say approximately 1500today. That's only natural if you're a precursor assuming all that R&D. The handwriting recog software was Russian if I remember. Maybe Apple did not own it but licensed it.
But it's still curious that with every forgotten cent behind them they will not pursue a successor. The iPod has the computing capacity to do it, all it needs are a couple of 'ports' (If possible) Might to be that simple after all.
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