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Will Microsoft Abandon The Mac Platform? No Way!

Will Microsoft Abandon The Mac Platform? No Way!

by , 9:30 AM EDT, April 12th, 2002

There has been much fretting and gnashing of teeth over whether or not Microsoft was going to kill the Mac Business Unit after its 5 year agreement was up. That agreement is due to expire in August of this year, and despite comments from Microsoft's Kevin Browne, the general manager of the company's Mac Business Unit (MBU), that his company would continue to support the Mac platform, there is still some doubt about how strong that commitment really is. In my opinion, the MBU is here to stay.

For one thing, the MBU makes money for Microsoft. It makes a lot of money for the company. Microsoft likes to make money, and Microsoft is perpetually on a quest to increase its revenues. The company's shareholders like for Microsoft to make money, too. Those shareholders might well question a move from the company that would kill a healthy portion of those profits, and analysts would also frown upon the idea. That would, in turn, hurt Microsoft's own stock. Sure, it could have far worse implications for Apple, but Microsoft takes care of its own stock first and foremost. Because of Office, Microsoft makes money on a significant percentage of each Mac sold from sales of the product to Mac owners. That's the sort of (effectively) guaranteed revenue stream that companies just don't kill. Even for its free market share grabbing apps like Internet Explorer and MSN Messenger, the company needs and wants as many Mac users as it can get. Those people represent market share, and Microsoft is all about leveraging its market share for new and useful things. Microsoft has a significant investment in the Mac Business Unit, and the company has shown repeatedly that it likes to get a good return on its investments. The MBU stays.

So what if the company went ahead and killed the Mac Business Unit, and stopped developing for the Mac for the sole purpose of destroying Apple's credibility? That can't happen either. The antitrust trials are still an ongoing affair, and any attempt by Microsoft to hurt Apple will be seen as such and seized upon by Microsoft's foes in that landmark battle. Even though the Bush administration's DoJ has completely abrogated its responsibility to the American people by forfeiting all of the victories won by the previous administration's DoJ, the litigation is still being carried out quite successfully by the nine dissenting states. There are also the private anti-trust damage trials going on, and those two could leverage any move by Microsoft to hurt Apple in their pursuit of private damages. Mac support has to be maintained or Microsoft will find its footing in the antitrust proceedings a tad bit more slippery. The MBU must stay.

Let's jump to a case where Apple is gaining market share. While that might threaten Microsoft in some ways, the reality is that it would be Microsoft who might lose credibility by ceasing to support the Mac platform in that scenario. If you want your products to be dominant, as Microsoft does, you need to be where the action is. If the action is on the Mac platform, Microsoft must be there too. The same thing holds true for the antitrust proceedings in that the bigger Apple's market share is, the more that cancelling support for the Mac will be used by Microsoft's foes. At this point, the bigger the Mac gets, the more important it is for Microsoft to support it. The MBU must stay.

Let's look at anecdotal evidence too. Kudos go to an As The Apple Turns reader who sheened through the Microsoft/Apple agreement and noticed that there was a clause in the 5 year contract that allowed Microsoft to cancel the agreement if Apple's unit sales fell below 3.5 million units in the four quarters before August of 2001. As The Apple Turns did their own math and found that Apple sold less than 3.5 million units during those four quarters (read the original piece for more details), and yet Microsoft didn't cancel that contract. That's a nice piece of anecdotal evidence to support the idea that the MBU is here to stay. In fact, there have also been recent developments by the MBU that the company would not have made if it was going to give the MBU the axe, Outlook and Entourage being the two biggest examples of this. Microsoft would not have allowed the development of either of those products if it intended to kill the MBU. That would just be a waste of resources, and Microsoft seldom does that. The MBU will stay.

Our last bit of thought on this concerns Bill Gates himself. We have commented on this before, but it is our opinion that Bill Gates openly admires Steve Jobs and the Mac platform. "Imitation is the sincerest form of flattery," is how the old saying goes, and Windows XP, MovieMaker, and many other Microsoft products have had at least a small touch of Apple-inspired imitation in them for many years. Bill Gates wants his company to make things as cool as Apple's products, and Bill Gates wants to be as cool as Steve Jobs is. You might personally disagree on the notion that Steve Jobs is cool, but we are talking about Bill Gates' opinion. He admires Steve, and he wants Steve to like him. It was Bill Gates that called the Mac "Steve's Amazing New Device," and it was Bill Gates that tried to get Apple to license the Mac OS in the Microsoft model in the mid-80s so that his company could profit off of making cool Mac software. It was Bill Gates that agreed to bury the hatchet and invest US$150 million in Apple for the sole reason of giving Steve's once again new company the support it needed in 1997. This may be ancient history, but it really hints at Mr. Gates' admiration of Steve Jobs. He is not going to let the MBU go away. Steve Ballmer, the titular head of Microsoft, eats, sleeps, breathes and sweats Microsoft, and has likely not used a Mac more than twice since George Bush, Sr. was president, but he does what Bill Gates wants him to do. The MBU stays.

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