Newspaper article The Christian Science Monitor

Bitten by Reality, Apple Saves Its Skin A Link between Apple and Microsoft Helps One Survive, the Other Thrive

Newspaper article The Christian Science Monitor

Bitten by Reality, Apple Saves Its Skin A Link between Apple and Microsoft Helps One Survive, the Other Thrive

Article excerpt

Apple zealots," critics call them.

They believe in Apple computers with near religious fervor. And thousands of the faithful jammed into tiny seats here in Boston to witness the gospel according to Jobs - Steve Jobs, the co-founder of Apple Computer. He would, they hoped, deliver an inspirational strategy.

He did, but not what they expected. The future, Mr. Jobs explained, is with Microsoft, the zealots' arch enemy.

To many analysts, that means Apple can survive.

But to many of the faithful, it sounded like betrayal. Not only had Apple succumbed to "the dark side," as one put it, it was actually helping Microsoft in its battle for cyperspace.

Microsoft makes the software - the operating system called Windows - that competes with Apple's Macintosh system.

Some 90 percent of personal computers run on Windows, which has made Microsoft a towering monolith in the industry.

Boos erupted throughout the 40-minute speech, Wednesday, by the charismatic Jobs, who helped both invent the personal computer and make it friendly.

After 18 months of dramatic losses and dwindling market share for Apple, Jobs said Microsoft will invest $150 million in Apple and continue writing software for its Macintosh computer.

Industry analysts greeted the news with cautious optimism.

It's "a very powerful endorsement that will undoubtedly be comforting to consumers contemplating buying a Macintosh," says analyst Rick Sherlund of Goldman Sachs.

Microsoft may emerge the big winner. In return for a modest, $150 million investment, Microsoft founder Bill Gates now has a powerful weapon in the Internet wars.

All new Apple computers will include Microsoft's Internet Explorer software, which means Explorer becomes the easiest route to the Internet for anyone using a Macintosh.

Not only is that a blow to Netscape Communications and its Navigator Web browser, Mr. Sherlund says, it strengthens Microsoft against other challengers.

Microsoft, he says, wants "to preserve Apple, perhaps because Apple is not a serious risk. But there are others coming up who are."

With the rise of the Internet and computer networks, other companies such as Sun Microsystems, Netscape, and Oracle are trying to unseat Microsoft.

It's an important concession because while Microsoft dominates desktop computer technology, Apple reigns in cyberspace.

Today, Apple's Macintosh computers create some 64 percent of all World Wide Web (Internet) pages, Jobs says. And Apple and Microsoft combined control 100 percent of the desktop computer market.

So converting those Web page developers to Explorer could give Microsoft a big boost.

"Whatever Apple and Microsoft decide to do, it will be a standard," Jobs told Wednesday's gathering at the Macworld Expo convention.

It was an argument that rang true, even to the faithful.

"It's probably overdue," says Christine Naugle, who owns a small graphics design firm in Boston. …

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