Microsoft vs Apple (1988)
Microsoft and Apple have both lead to major technology innovations regarding the personal computer. Microsoft began with software and eventually the complex DOS operating system. Apple began with computers and in time an innovational operating system, the Apple Lisa, with point-and-click functions. After Apple's operating system Microsoft developed Windows which exacted from Apple's point-and-click functions.
Microsoft was very involved in the development of the Macintosh. Microsoft had been the first external developer to receive a Macintosh prototype. The prototype was quickly nicknamed SAND (Steve's Amazing New Device) by Bill Gates and Charles Simonyi. Microsoft produced productivity software that the Macintosh desperately required to make the Macintosh a competitor in corporate markets. After the public introduction of the Macintosh, Bill Gates personally wrote John Sculley, pressing him to license the software and ROMs to external manufacturers so that the Macintosh would become the new standard in personal computing. (This was two years after Microsoft had started development of Interface Manager, renamed Windows soon before release.) The proposal, dated June 25, 1985, was thoroughly rejected by Jean-Louis Gassée, who was given control of the Macintosh and Lisa after Steve Jobs had been divested of management duties. Gassée argued that the Macintosh was so immensely superior to the existing PC graphical environments that Apple would never confront any worthy competition and would be able to rely on profit-rich hardware sales.
When Gassée saw Windows 1.0, he discounted the software as no threat. But when Sculley saw the software, he was furious. Microsoft had been supplied early prototypes of the Macintosh and some source code to help optimize Word and MultiPlan. Now Windows had a menu bar nearly identical to Apple's. Windows even had a 'Special' menu, holding disk operations. Other components were strikingly related. Windows came bundled with Write and Paint, both mimicking Apple's MacPaint and MacWrite. In the end, Sculley agreed to license the Macintosh's "visual displays" to Microsoft to use in software derived from Windows 1.0, and Microsoft agreed to keep developing its Mac products and promised not to release Excel (a feature-rich successor for MultiPlan) for any other platform for two years.
Windows 2.0 was a vast improvement over version 1.0, and Sculley recognized it. The new version provided overlapping windows, multitasking, and a limited object oriented environment. In addition to the new features, Windows 2.0 actually held programs for it. During the press conference, Microsoft disclosed that it had concluded developing Microsoft Word for Windows and Microsoft Excel for Windows, and that external companies including Aldus, Corel, and Microtek were all working on Windows 2.0-compatible programs.
Sculley was outraged at how much Windows 2.0 resembled the Macintosh, and he considered this to be a breach of contract. Sculley, along with most of the Apple legal team, believed that the November 1985 agreement gave Microsoft license to use Macintosh displays in Windows 1.x, but not in any subsequent versions. Without warning, Apple filed suit against Microsoft in federal court on March 17, 1988 for violating Apple's copyrights on the "visual displays" of the Macintosh. Judge W. Schwarzer ruled on July 25, 1989, that 179 of the 189 disputed displays were addressed by the existing license, and most of the other ten were not infringements of Apple's copyright. In the case of Apple vs. Microsoft, a few of the displays Apple contested were ideas and could not be protected by copyright. Apple appealed the ruling and made it all the way to the Supreme Court, which refused to hear the case.
The lawsuit single-handedly clouded Microsoft-Apple relations until 1997, when Microsoft pumped $150 million into Apple.
Macintosh Business Unit (aka MacBU) is an operating unit of Microsoft Corporation that produces software for the Apple Macintosh. Launched on January 7, 1997, it is today among the largest developers of Macintosh software outside of Apple Inc., currently employing more than 180 people and generating an estimated annual revenue of $350 million. It all started with the appearance of a twenty-foot projection of Bill Gates's head conversing with Steve Jobs during that year's Boston Macworld Expo keynote. Bill joined Steve to announce that Microsoft was investing $150 million in Apple, and to promise that Microsoft would continue to develop its Office suite and Internet Explorer for at least the next five years. The Mac fans in the crowd were shocked. Boos were heard, moving Jobs to discourage the discontent masses, "We have to let go of a few things here. We have to let go of the notion that for Apple to win, Microsoft has to lose."
Gates's appearance couldn't have occurred at a more favorable time - Apple was in deep financial and product-line turmoil at that point in its history. Although the $150m investment was a token gesture, the pledge that Microsoft would continue to endorse the then-reeling Mac platform was what truly counted. Microsoft was indicating to the rest of the industry that the Mac was still a feasible platform - and, simultaneously, helping to deflect the roiling anti-trust charges that were endangering its own PC hegemony. And Microsoft did, indeed, continue to develop Mac software. Office 98 for Mac followed in - you got it - 1998. Then IE 4.5 came out in 1999 with Mac-first features like Print Preview and Forms Auto-Fill. IE 5.0 followed in 2000, as did Office 2001 for Mac.
Only the truth is that Apple and Microsoft have seldom been direct competitors. Microsoft’s predominant goal for the past 25 years has been to produce and hold an operating systems monopoly on the IBM-compatible PC platform. Apple has never moved into that market, and thus never threatened any of the markets Microsoft viewed as essential. Apple has, of course, tendered their own rival hardware platform. But that’s indirect competition, not direct. Apple’s sales pitch has always been that you should purchase an Apple computer, not that you should replace Microsoft’s OS with theirs.
The traditional wisdom holds that the difference is that Microsoft went down the course of open licensing, whereas Apple decided to remain proprietary. Both assertions are true, but they’re not the key to understanding the companies’ differences. The key difference is that Microsoft concentrated — intensely and purposefully — on parlaying each of their successes into bigger successes. Microsoft parlayed their DOS command-line-era monopoly into the Windows GUI-era monopoly, then parlayed their Windows monopoly into the Office monopoly. In terms of Microsoft’s revenue and profits, everything other than Windows and Office are minimal.
Apple, on the other hand, seldom even tried (let alone succeeded) to parlay any of their successes into further successes. The Apple II was a phenomenally winning platform. When you hear people say that Apple used to own 15 to 20 percent market share in PCs, they’re not talking about the Mac. The Macintosh was neither established on nor compatible with the Apple II. In the ’90s, under John Sculley, Apple repeated this formula of building a new platform that stood isolated from an existing, popular platform with the Newton — and this time it clearly was an error. The greatest problem with the Newton wasn’t the size, or the price, or the initially horrible handwriting recognition. The biggest problem was that it didn’t really have anything at all to do with the $3000 Mac on your desk. You couldn’t even mount it on your desktop.
The Palm Pilot (and later on, Microsoft’s Pocket PC platform) was planned and marketed as a computer peripheral device, parlaying off the success of the PC.
Now, Microsoft and Apple is cited by Fox Business News as one of “America’s greatest business rivals”. It began as a dual over computers but today the contest is about gaming, music, and a “fight for the hearts and minds of the American consumer”. With technology being so dynamic and there being numerous large companies across the board, Microsoft and Apple have been adapting and embracing the competitive landscape from the beginning. They've each enlarged their markets in order to supply the best comprehensive package to its customers. Despite attaining tremendous success thus far, Microsoft is feeling the pressure because Apple has acquired a competitive advantage. Apple has won the popularity and created a marketing advantage which has heightened the rivalry over the last year with a series of commercials that mock its rival as “outdated and utterly un-cool” according to Alexis Glick of Fox Business.
And the platform squabbling continues, of course, with those in the Mac camp continuing to deride "peecees" that operate on "Windoze" and those in the Windows camp continuing to rail against "Mactards" and "iDiots." But the Microsoft/Apple relationship remains.
What about the other major players in the computer industry in the early 1980's? Three of the largest, Commodore, Atari, and Tandy came into being and failed for different reasons but the roles that Microsoft and Apple played in their very fabric can't be denied.
In 1982, the Commodore 64 took the nation by storm because of its price and the new capabilities that it offered. In addition to its unheard of $400 price tag (which was bargain-priced for a personal computer at the time), it also had 64 Kb of RAM. During the Commodore 64's lifetime, sales totaled 30 million units, making it the best-selling single PC model ever. For a considerable period of time (1983-1986), the Commodore 64 ruled the market with between 30% and 40% share and 2 million units sold per year, outselling the IBM PC clones, Apple computers, and Atari computers. Part of its success flowed from to the fact that it was distributed in retail stores rather than electronics stores, and that Commodore made many of its parts in-house to control supplies and cost. While demand for the C64 flattened in the US by 1990, it remained popular in the UK and other European countries. Ultimately, economics, not obsolescence sealed the C64's fate. In March 1994, at CeBIT in Hanover, Germany, Commodore declared that the C64 would be finally discontinued in 1995. Commodore claimed that the C64's disk drive was costlier to manufacture than the C64 itself. Though Commodore had planned to discontinue the C64 by 1995, the company filed for bankruptcy a month later, in April 1994.
Atari first branched out of the gaming arena into PC's with the Atari 800, and its smaller cousin, the 400. While an assortment of issues made them less appealing than the Apple II for some users, the new machines had some success when they eventually became available in 1980. Under ownership with Warner, Atari Inc. achieved its greatest success with the Atari 2600, selling millions. At its height, Atari accounted for a third of Warner's annual revenue and was the fastest-growing company in the history of the United States at the time. However, Atari Inc. ran into troubles in the early 1980s. Its home computer, video game console, and arcade divisions ran independently of one another and seldom cooperated. Confronted with intense competition and price wars in the game console and home computer markets, Atari was never able to plan for and replicate the success of the 2600.
Tandy entered the PC market when it hired Steve Leininger, a member of the Homebrew Computer Club, to produce what finally became the TRS-80. When the TRS-80 was released in 1977, RadioShack stores were deluged with orders--they were back ordered for months. In the first year, Radio Shack sold almost 55,000 units. By 1983, computers and accessories were the largest single class of income for Tandy (34.5%). In 1983, still too prideful to fully defer to IBM,Tandy brought out the Tandy 2000. The 2000 ran MS-DOS, like the IBM PC, but it wasn't actually IBM compatible. The 2000 sported an Intel 80186 processor which was substantially faster than the PCs 8088. The 2000 also had far superior graphics capability and greater capacity disk drives. By this time though, standardization was the key, and the 2000 failed mainly due to it's advanced features. In 1984, Tandy brought out the 1000, virtually 100% IBM compatible, which became its best selling line of computers ever. Tandy had learned to take its direction from IBM.
Velocity Guide helps educate consumers about advances in High Speed Internet technology, improvements in computer technology, and how to get the most out of your computer and broadband Internet connection.