Putting New Shoes on an Old War Horse

Hewlett-Packard is about to introduce a new version of the HP 12C Financial
Calculator. This seemingly mun dane fact is actually remarkable, because the
original version has been on the market, essentially unchanged, since 1981, the
year the IBM PC was first introduced. What accounts for such amazing longevity
in an industry where product lifetimes are typically measured in months? The
answer is that it does one job both inexpensively and exceptionally well. And
that helps explain the persistence of devices whose roles might long ago have
been taken over by the PC.

The pocket-sized HP 12C has been an indispensible tool to a generation of
financial analysts, accountants, investment advisers, and others who run complex
financial calculations. And HP is sticking with what works: The new version, the
HP 12C Platinum, offers only minor changes, including a better battery and
easier data entry. Nearly all 12C users have access to computers with Microsoft
Excel or another spreadsheet program. Many who do complicated math could use
powerhouse computer algebra systems such as Wolfram Research’s Mathematica or
Waterloo Maple. But a calculator is often the tool of choice.

PCs do many things splendidly. If I had to use a financial model or run a
complicated financial calculation repeatedly with only minor variations, I would
fire up a spreadsheet. But spreadsheet models or calculation templates take a
lot of time and effort to create, and they are very inefficient for a one-time
calculation. That’s where calculators shine.

The 12C is not easy to use, though. It has 39 keys, and nearly all have two
or three functions assigned to them. Although such complicated calculations as
the internal rate of return of an investment and sum-of-years-digits
depreciation are built-in functions, you can’t expect to use them without
spending time with the manual. The biggest change in the 12C, expected in stores
around June 1, is a choice between HP’s traditional reverse Polish notation
– you add 3 and 4 by tapping 3, Enter, 4, + instead of 3, +, 4, = , – and
the much more familiar algebraic entry. But that won’t change the need to
study the manual to become proficient. The 216-page Owner’s Handbook and
Problem-Solving Guide, which includes step-by-step instructions for a large
number of computations, betrays its Carter Administration origins by using
eye-popping double-digit interest rates in many examples.

Once you’ve learned the tricks, specialized calculators have large
advantages over computers in a lot of settings. Unlike a laptop, you never have
to decide whether having it along is worth the trouble of carrying it. The 12C,
about the size of an index card and just over a half-inch thick, will travel all
but unnoticed in a briefcase or a purse. You don’t have to worry about power,
because the 12C will run for up to three years on one easily replaceable lithium
battery. The 12C Platinum carries a list price of $105 but should be discounted
to $90 or less. Beyond the ubiquitous four-function units, specialized
calculators continue to play important roles. Graphing calculators, especially
Texas Instruments’ TI-81 and its successors, have probably been more
influential than any other technology, and far more important than PCs, in high
school and college math and science education.

The calculator holds a special place in tech history. TI’s Jack S. Kilby,
who shared a Nobel prize for the invention of the integrated circuit, built the
first pocket calculator to demonstrate a practical use for his creation. Apple
Computer founder Steve Wozniak famously sold his HP 35 to help finance the first
batch of Apple I’s – and he credits his experience in HP’s calculator
division for giving him the skills and engineering discipline he needed for the
job.

With all the software tools at my disposal, I usually turn to a calculator
when there are numbers to be crunched. The handy and deceptively simple tools
are going to be around for a long time to come.

By Stephen H Wildstrom
in BusinessWeek. Copyright 2003 by The McGraw-Hill Companies, Inc