Feature Article
Microsoft Bails Out Apple

September 15, 1997
By Scott Lewis

(Note: At a time this article was originally published I thought about having a bi-weekly column. This was the second September 97 article. It is the only one like this.)

Have you heard... Microsoft has bailed out Apple with $150 Million. This is incredible. You will here Steve Jobs say the for Apple to succeed, Microsoft does not have to fail. Well it is about time. Apple has a good chance now. Not a great one, but a good one. Assuming they do the right thing.

I believe that Apple made a couple of major mistakes. 1) They didn't license the system for clone makers. 2) they didn't focus enough on the OS and software. Apple is in a great position to do this now.

First a couple of detail for those of you that missed them. Microsoft bought $150 M in Apple stock with the following conditions:

  • Microsoft cannot sell the stock for three years.

  • Microsoft must continue application development for the Mac OS.

  • Apple drops any lawsuits against Microsoft.

  • Apple include Internet Explorer as the default browser in the Mac OS.

  • Microsoft and Apple share licensing until 2002.

There are more details, but this gives you the point. I don't know the exact details of the last item, so I won't comment on it. As far as the first four... Microsoft has nothing to loose. Microsoft has billions on cash laying around, so $150 mil is petty cash for them. Apple could use a good infusion of cash.

Now the big question is will Apple be able to make a turn around. I think they have a good chance, if they correct the mistakes they made (noted above). What Apple needs to do is leave the hardware to other. This will help get the price of hardware down, and will allow more machine to penetrate the market. Next, Apple need to concentrate on the OS. They need a good multithreaded OS. Then they need to help drive applications. I think Apple needs to bite the bullet in this area and pay developers to build the apps. This may cost a bit, but Apple need to make sure there are apps available. he developers get the advantage of getting a good deal of their R&D paid for, and then they can sit back and collect the royalties. It would also be a big plus for developers to continue working on those apps.

Is it too late for Apple? I don't think so. Steve Jobs did a great job in the past. If he takes the same bold approach, and they get a CEO/Chairman that also is will to be bold, they should be able to make a good turn around. But time is of the essence. Apple can't afford to take its time. So get to work Apple, and let us all be glad you did.

What do you think? Let me know, and I will post your opinions here. Please indicate in you message whether you want me to include your e-mail address or not with your comments.