News

Apple, Microsoft rivalry returns with a bang

• By John K. Waters
• January 13, 2003

The bitter rivalry between Microsoft Corp. and Apple Computer Inc. appears to be back in full force after several Apple moves disclosed by CEO Steve Jobs during last week's MacWorld conference in San Francisco. The acrimonious relationship had quieted through the 1990s due to Apple's decline in fortunes and Microsoft's 1997 decision to invest $150 million in the desktop icon to halt a costly court battle. But as a peace accord signed at that time comes to an end, it appears that the competition is returning.

First and foremost, Jobs unveiled Safari, an Apple-developed Web browser that will replace Microsoft Explorer on the Apple desktop and be available ultimately for all platforms as a free download. Jobs claims Apple benchmark tests have determined that Safari can display Web pages more than three times faster than the ever-present Explorer browser that almost single handedly quashed Netscape. Jobs then unwrapped a presentation application called Keynote that takes on Microsoft's ubiquitous PowerPoint software.

During his keynote, Jobs revealed that he has been using pre-release versions of Keynote secretly for a year in his speeches. ''We hired a low-paid beta tester,'' he said. Keynote imports and exports PowerPoint presentations, Acrobat PDF files and QuickTime movie formats, and sells for $99.

The introduction of the Safari browser seemed like a virtual slap in Microsoft's face, particularly because it is based on open-source code. Microsoft has been publicly critical of the open-source movement recently, and has admitted that it sees Linux, the open-source OS, as a threat.

Jobs told his audience that Apple would post all of its code improvements to the new browser on the company Web site, as is required by most open-source software licenses. ''Some people have a problem with open source,'' Jobs said. ''We think it's great.''

Microsoft countered the Apple moves with a $300-off promotion for the Mac version of its Office productivity suite that incorporates PowerPoint.

Still, slick product offerings and tradeshow hype notwithstanding, Apple's share of the PC market continues to dwindle. According to industry watcher IDC, the Cupertino, Calif.-based computer maker held onto just 3.8% of the PC market in the third quarter, down from 4.3% the previous year. According to Jobs, Apple claims an estimated 5 million active users of Mac OS X, which was introduced in the fall of 2001, up from the 1.2 million the company counted a year ago.

Meanwhile, Jobs touted Apple's vision of the ''digital lifestyle'' with new offerings of wireless technology and multimedia devices. ''We are going to do for the digital lifestyle what Microsoft Office did for productivity,'' Jobs said.

He showed his audience how the individual pieces of Apple's multimedia software, dubbed ''iLife applications,'' are now built to work together. iTunes music playlists, for example, may be added to iPhoto slideshows or to iMovie soundtracks. The latest versions of the software are available as free downloads from Apple's Web site, with the exception of the latest version of iDVD, which Apple said is too large for most users to feasibly download. Apple says the entire iLife suite will be available in retail outlets later this month for $49.