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Apple Reduces Its Microsoft Dependency

As is becoming increasingly common at Macworld Expo, Apple dominated attendees’ attention by introducing a wide-ranging set of new hardware and software products. The new 12-inch and 17-inch PowerBooks, the speedy 802.11g-based AirPort Extreme, significant updates to three of the four iApps, three new major applications in Safari, Keynote, and Final Cut Express… the rapid-fire of announcements had journalists scribbling madly through Steve Jobs’s two-hour keynote presentation.

But, as interesting and important as most of the announcements were, the release of the Safari Web browser and the Keynote presentation program offer the first major public look at what has been one of Apple’s main goals of late: to reduce the company’s dependence on Microsoft for essential productivity software. The task is by no means done, so look for future moves to complete the task of making Microsoft’s software excellent alternatives, rather than the sole choices in any given field.

Past Efforts — When Steve Jobs returned to Apple in 1997, a five-year agreement was made between the companies, requiring Microsoft to continue producing Macintosh software, in exchange for which Apple would bundle Microsoft software – Outlook Express and Internet Explorer – with the Mac OS. That agreement is over now and won’t be renewed, but Apple has been working for some time to wean itself from Microsoft, a move that’s not only in Apple’s best interests, but which may also benefit Microsoft by giving the company’s Macintosh Business Unit (MacBU) some much-needed competition.


Though Apple didn’t make much of it at the time, the inclusion of Mail with Mac OS X was the first step in this strategy, enabling Apple to drop Microsoft’s Outlook Express, which had been bundled previously. More recent public hints came with Apple’s unveiling of iChat in May of 2002, since iChat specifically offered compatibility with AOL Instant Messenger, rather than Microsoft’s MSN Messenger. Then, although it wasn’t blatant, Apple’s system-wide Address Book and the release of iCal meant that Apple had duplicated most of the basic features of Entourage X. The public problems became more obvious after Microsoft complained about how Office X wasn’t selling well enough because Apple wasn’t helping to market it.



Big Game with Safari — Once the cracks began to show, it became clear that Internet Explorer would be Apple’s first target. Internet Explorer’s favored position on the Dock made it the only non-Apple program to receive such treatment, and given the undeniable importance of a Web browser in today’s computing world, Apple simply had to reclaim that spot.

Conceivably, Apple could have purchased one of the smaller browsers, such as OmniWeb or iCab, but the company has avoided that approach with the iApps after turning Casady & Greene’s SoundJam into iTunes. In particular, Apple chose to develop iPhoto and iCal in house, even though there were plenty of decent programs that Apple could have bought to kick start the development effort. Part of that is undoubtedly Apple’s desire to show how quickly Cocoa applications can be developed from scratch; there’s probably some of the old "Not Invented Here" syndrome in play as well, although there are good reasons to write software yourself, as you can read in the "Joel on Software" article linked below.

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So Apple set out to create their own browser, hiring a Netscape developer who was also working on the open source browser Chimera. That led to assumptions that Apple would use the open source Gecko HTML rendering engine that’s behind all of the Netscape-derived browsers (Netscape, Mozilla, and Chimera), but those assumptions proved false when Steve Jobs announced that Apple had instead chosen the open source KHTML engine, reportedly because KHTML is significantly faster than Gecko and has about seven times fewer lines of code. Whatever the under-the-hood details, Safari looks to be a good, if not yet great, Web browser, and we hope Apple will continue to use it to push the browser paradigm forward.


Does the release of Safari change the Web browser landscape? Yes, since it will overnight become one of the primary Web browsers on the Internet, and anyone writing HTML must test against Safari along with all the other heavily used browsers. But overall, I don’t think Mac users will find the change all that unsettling. Until Safari, Internet Explorer was the dominant browser, and all the rest (Netscape, Mozilla, Chimera, iCab, OmniWeb, and Opera) were used by people for whom Internet Explorer wasn’t quite right. I suspect Safari will replace Internet Explorer, not just on the Dock, but also as the dominant Macintosh Web browser, and Internet Explorer will join the others as a browser of choice for those who eschew the status quo.

Selling the Keynote — If the release of Safari was not unexpected, the appearance of Keynote was an almost complete surprise. Perhaps PowerPoint experts had been wondering about some of the effects in Steve Jobs’s Macworld Expo keynotes in 2002, all of which relied on pre-release versions of Keynote, but if there was any such speculation, I never heard it. I had been thinking privately that Apple might be working to beef up AppleWorks so it could give Microsoft Office X some competition, but since AppleWorks doesn’t include presentation software, I wasn’t thinking in those terms.

In retrospect, though, a cutting-out expedition to separate the weakest member of the Office suite from the herd makes total sense. Excel occupies an extremely solid position, since it’s incredibly mature and Excel spreadsheets are required for the day-to-day functioning of innumerable businesses. Word’s position is also rather secure, thanks to the need for people to exchange Word documents among Macintosh and Windows users and to import them into layout programs. Word is more vulnerable than Excel, though, because many people find the program’s features – even essential ones such as version tracking and comments – ungainly and awkward. As much as Word is currently an essential application for vast numbers of people, a competitor that read and wrote Word format files perfectly would have a chance of supplanting it.

With Mail, Address Book, and iCal already offering an alternative to Entourage, PowerPoint made sense as the next target for Apple. With the exception of a few programs like ConceptDraw Presenter from small companies, PowerPoint hasn’t had any real competition since the demise of Aldus Persuasion in the mid-1990s. Although PowerPoint isn’t a bad program, it had become the dominant presentation program more through its inclusion in the Office suite than its incomparable feature set or overwhelming ease of use. PowerPoint’s file compatibility is important, but not nearly as much as with Word, and it doesn’t fill the day-to-day role of Excel in running a business.

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Hence Keynote. Although I’m not qualified to compare it to PowerPoint on a feature-by-feature basis, it looks as though it will be highly credible competition. Not surprisingly, Apple focused on helping users make visually arresting presentations with Keynote, but in a forward-thinking move, Keynote’s file format uses XML (eXtensible Markup Language). Since XML files are merely structured text files, other programs will be able to write out Keynote files, thus making it possible to create automatic presentations based, for instance, on daily sales data. Plus, Apple enabled Keynote to import and export PowerPoint files, a capability that should address many file compatibility concerns (reportedly, QuickTime movies in PowerPoint presentations must be moved over manually).


Unlike the free Safari and iApps, Keynote costs $100, and thus will not automatically take over as the Macintosh presentation software of choice. But the buzz about it at Macworld Expo was positive, and if nothing else, it should serve as a wakeup call to the PowerPoint team that they need to innovate or risk losing the Macintosh platform.

How Should Microsoft Respond? While not declaring war, Apple has certainly thrown down the gauntlet, and it remains to be seen how Microsoft will respond. Microsoft’s MacBU has been flailing since the release of Office X in October of 2001. The more recent departure of MacBU general manager Kevin Browne emphasized the group’s confusion and underscored the importance of Apple reducing its dependency on Microsoft for essential software.

Apple must extricate itself from this too-close relationship with Microsoft carefully. Were Microsoft to become too angry about how Apple was portraying the company and its products, it’s not inconceivable that Microsoft would dissolve the MacBU (which probably doesn’t contribute that much to Microsoft’s bottom line) and stop producing Macintosh software entirely. Such a move could still be disastrous for Apple, given the essential roles that Word and Excel play in business, government, and academia. However, I expect better from Microsoft, particularly since the company has long utilized the same strategy in the Windows market that Apple is following in the Macintosh market. What’s good for the goose…

Aside from the problem of being beholden to a company that is essentially your primary competition, the other reason it makes sense for Apple to lessen its dependency on Microsoft is that Microsoft hasn’t been delivering of late. It’s been 14 months since the release of Office X, and although carbonization of the four programs in the Office suite was an admittedly huge undertaking, Office X has few new features over Office 2001, released 13 months earlier. And Internet Explorer hasn’t seen a major update since March of 2000, thanks in part to being left without a development team for long periods of time.

Sadly, a renewed sense of purpose at Microsoft, if it’s indeed happening internally, hasn’t yet bubbled to the surface. In our briefing with Microsoft, the only new thing they showed was MSN for Mac OS X, a novice-level Internet service that, short of some moderately interesting parental controls, was basically a yawn. But even MSN for Mac OS X was exciting compared to the rest of Microsoft’s limp announcements – the extension of a discount on Office X for new Mac buyers, the release of Entourage X on its own for $100, and the bundling of the Office X Test Drive with all new Macs (in which you can see Apple trying to let Microsoft down gently). My questions about whether we’d see a new version of Office X in 2003 were ducked, and no one would venture a comment on Safari or Keynote.

Call me an optimist, but I hope that Apple reducing its dependency on Microsoft will motivate Microsoft to take renewed interest in moving Office X and Internet Explorer forward in interesting and innovative ways. Competition is a good thing, and Microsoft hasn’t had nearly enough of it lately.

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