"The only reason Apple exists today is a bailout from Microsoft". True?

Discussion in 'Apple, Inc and Tech Industry' started by thermal, Mar 15, 2012.

  1. thermal, Mar 15, 2012
    Last edited: Mar 15, 2012

    thermal macrumors regular

    Aug 3, 2009
    Vancouver, Canada
    There's a discussion on the Android forum about whether the launch of the new iPad was a fail.


    Lots of comments thrown back and forth, and among them was this:

    The one and *only* Reason Apple even exists today is a bailout from Microsoft about a decade(or so) back to avoid anti-trust lawsuits.[/B

    Is this true?
  2. SHIFTLife macrumors 6502

    Jul 24, 2008

    I don't think it's fair to say it's the ONLY reason, but yes, Microsoft made a large investment in Apple (to the tune of $150M if I recall correctly), back in the 90's.

    Edit: Looks like I was wrong on the figure...just checked and it appears it was $150M
  3. jclardy macrumors 68040


    Oct 6, 2008
    Yes, but at the same time Microsoft got started writing software for Apple computers.
  4. wodeh macrumors regular

    Nov 18, 2007
    Yes, and it's widely accepted that the one single investment from Microsoft has been the direct result of every successful Apple produce since. Microsoft's money is blessed with an ancient and powerful magic, dontchaknow!
  5. rdowns macrumors Penryn


    Jul 11, 2003
    That folklore refuses to die.

    The agreement between Apple and Microsoft provided for a cross licensing agreement between the companies, a commitment by Microsoft to continue producing Office for Mac for at least 5 years, the inclusion of IE as the default browser on new Macs and a symbolic $150 million investment. At the time, Apple had $1.2 billion in cash.
  6. impulse462 macrumors 68000


    Jun 3, 2009
    I wouldn't go so far to say it's the *only* reason Apple is successful now. Microsoft just gave them the opportunity to keep working (and not go out of business) with that $150 million investment.

    Microsoft had nothing to do with the iPod, iPhone, and iPad.
  7. SuperRob macrumors 6502

    Mar 14, 2011
    That is correct. And the $1.2 billion in cash was only about 90 days worth of operating expenses. The money Microsoft gave them was maybe good for a day or two. It's all of the other operational changes Apple made both before and after that deal that saved the company.
  8. Menel macrumors 603


    Aug 4, 2011
    Fanboys of any product have fact denial issues

    With a touch of jealousy their android devices don't get the same first and third party support.
  9. NameUndecided macrumors 6502a

    Mar 28, 2011
    What a bizarre thread that you linked to. It's a crazy-ass situation when people start getting emotional and judgmental about other people's taste in technology.

    And yes, I realize that that happens at this site too. It's just as uncomfortable when it gets to that same degree. Like watching a grown-man cry over something stupid.
  10. 0dev macrumors 68040


    Dec 22, 2009
  11. applesith macrumors 68030


    Jun 11, 2007
    Thank you for mentioning this!


    Most people hear $150M and freak out. It really isn't that much when you look at it in context.
  12. ratsg macrumors 6502

    Dec 6, 2010
    false, on the time line.

    m$ had been writing code for Apple systems since the 1980's.

  13. LorenK macrumors 6502

    Dec 26, 2007
    Focusing solely on the dollar investment ignores the reality of capital markets, which operate on rumor and hearsay. What Microsoft did by making the small investment and, more importantly, the commitment to Office for Mac was to give legitimacy to the continued existence of the Mac as a computing platform. Just as people look to the Mac Pro updates as Apple's commitment to the professional user community, Microsoft gave its "blessing" to the Mac, which legitimized Apple as a continuing going concern. (It also didn't hurt that by supporting Mac and Apple, Microsoft had a defense to any antitrust claims arising from its dominance of the operating system market. That Apple's resurgence has bit Microsoft in the butt big time is probably bittersweet to those who made the decision for what were at the time sound business tactical reasons).
  14. Mousse macrumors 68000


    Apr 7, 2008
    Flea Bottom, King's Landing
    I'd say the biggest decision that "saved" :apple: was killing off the clone licensing. Power Computing was eating :apple:'s lunch in the lucrative high end.
  15. rdowns macrumors Penryn


    Jul 11, 2003
    Certainly an important one but there were others like trimming the product line which had a ****ing ridiculous amount of models, scrapping a ton of projects and Gil Amelio building a cash hoard before Jobs returned.
  16. Stuntman06 macrumors 6502a


    Sep 19, 2011
    Metro Vancouver, B.C, Canada
    I've been trying to find some article that talks about this without claiming that MS bailed out Apple. I recall looking it up a couple of years ago, but I tried looking for it today, but was unsuccessful finding such an article. I recall seeing some article that talked about the IP lawsuit that Apple was in pretty good position to win. If you happen to know of such an article, can you please provide the link?
  17. ixodes macrumors 601


    Jan 11, 2012
    Pacific Coast, USA
    The only thing that matters is what's happening in the present.

    Unless, you prefer living in the past.
  18. MonkeySee.... macrumors 68040


    Sep 24, 2010
    Wow that link is....ummm....wow.

    People just don't get it when it comes to spec. Its as if they think the iPad will now be slow?
  19. Stuntman06 macrumors 6502a


    Sep 19, 2011
    Metro Vancouver, B.C, Canada
  20. vrDrew macrumors 65816

    Jan 31, 2010
    Midlife, Midwest
    I think you could make the argument that Microsoft would never have grown to the size it was without Apple showing them how to put windows and icons on a computer screen. Do you think they'd have sold billions of copies of MS-DOS v22.5? Would every teenager in the world check their Facebook walls and send instant messages if you had to do all that via a C:\ prompt?

    I looked at the Android thread. And, to be honest, there seemed like a lot less Applehate there than you see in some of the threads here.

    I think by now its becoming clear to all but the most rabidly anti-Apple people that a) the iPad isn't just a flash in the pan (no pun) and that b) the swarm of "magical Android tablets" is just never going to happen. People might dream of the possibilities of Windows 8 for Tablets® , but even thats looking less likely day by day.

    Microsoft's investment in Apple in the late 1990s was more of a "vote of confidence" than anything else. It sent a not-so-subtle message to both the developer and the investment community that Apple still had a lot to offer the computer industry.
  21. KnightWRX macrumors Pentium


    Jan 28, 2009
    Quebec, Canada
    What makes you think that its Apple that brought all of this to the forefront ? The fact is, there were already many vendors working on suitable GUIs when Apple came in with the Xerox stuff. To think that a world without Apple would have resulted in a command-line only computer OS for consumers in 2012 is ludicrous.

    Now, I'm not denying Apple's influence on the computer industry, I'm just saying that someone else would've come along.
  22. snberk103 macrumors 603

    Oct 22, 2007
    An Island in the Salish Sea
    I agree with the rest of your comments, but I don't agree with this one. Well I didn't agree until last year.

    The thinking goes that if someone buys a Mac it's a lost MS Windows sale. But many people (some think it's more than half) end up buying a Windows license for bootcamp or a VM. However, the Windows license bought for a Mac is probably going to be a retail license, not an OEM license.

    The retail license presumably has a much larger profit margin than the OEM licenses that MS sells to people like Dell and HP. I would argue that while MS may be selling fewer Windows licenses to Mac owners, they are making more money overall because a retail license costs much more than the OEMs are paying.

    Same thing for Office. Whether a Mac owner is buying a Windows version for their Windows VM, or buying the Office for Mac version... they are still buying a license from MS....and again, probably retail and not the OEM license.

    I think that is why MS has been happy to keep developing Office for Mac - it helps to drive sales of Macs in general, who then buy the full-price versions of Windows and Office.

    It's the PC makers themselves who get stung by Mac sales.

    Of course that was only true until the last year or so..... because iPads don't do anything for MS - and therefore MS is now in the same boat as PC makers. I think we will see a huge push from MS to get their tablets into market because to not do so will actually see Apple eating MS's lunch.

    imho, of course
  23. CalBoy macrumors 604


    May 21, 2007

    It also ignores the fact that Jobs' idea to create a simple 2x2 grid of products (portable vs. desktop; pro vs. consumer) was really what saved Apple's messy product line and allowed it to focus on doing a few things really, really well.

    I'll grant that $150 million might have been a symbolic gesture for the capital markets, but that was never a risk. Ellison was in the shadows ready to leverage his fortune to help Jobs put Apple back on track.
  24. Designer Dale macrumors 68040

    Designer Dale

    Mar 25, 2009
    Folding space
    Microsoft may have had a part in keeping Apple above water, but it also held off major trouble for MS. If Apple had closed it's doors, Microsoft would have become a monopoly and could have been broken up by the Federal government.


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