Apple's Real Worry Isn't the Loss of IE


By Alex Salkever Who would have expected the strange six-year marriage between the stylish David of the PC universe and the lumbering, unstoppable Goliath to last so long? That relationship may yet endure, but it has recently become fairly frayed. On June 12, Microsoft's (MSFT) Macintosh Business Unit announced that it would cease development of the Internet Explorer Web browser for the Apple (AAPL) platform.

That seemed to have caught many Mac watchers by surprise. It has even led some pundits to scream that the sky is falling, with the claim that Apple users won't be able to surf the Web with the same unthinking abandon that Windows users do.

So is this the end? No way, Chicken Littles. At least, not yet. Here's the real skinny -- and why the true problem isn't the browser issue at all.

SURFIN' WITH SAFARI. As an Apple user myself, I pretty much abandoned IE for Apple's own Safari browser almost as soon as it came out in January, 2003. I don't miss IE much. And I don't think many other Mac users do, either. Apple's latest figures on Safari downloads puts the number at 2 million. That's about 10% of Apple's total installed user base worldwide.

Sure, some Web pages may not be optimized for Safari or the less popular Apple versions of the Mozilla browsers. But those pages are infrequent and relatively inconsequential. So much so that I can't recall any offending sites right now. More important, Apple's homegrown Safari browser actually outperforms IE in loading the vast majority of Web sites. It's fast, and it's getting new features with each release.

Also, I seriously doubt that Web developers will pay any less attention to Apple now. Or, more accurately, I doubt that they'll build sites that work exclusively for Windows machines running IE. For that, Steve Jobs can thank Linux. Long maligned as a desktop nonstarter, Linux should pass Apple in market share for desktop operating systems on computers sold in the coming year. That means from 7% to 10% of all PCs shipped won't bear the Windows icon.

BRIDGING TWO WORLDS. One out of 10 is enough to force Web developers to build sites that are friendly to multiple browsers. Linux and Apple share between them more than a half-dozen viable browsers. Those include Konqueror, Mozilla, Camino (a Mozilla-based browser), and Opera, among others. Should Linux' desktop growth continue, more and more developers will feel compelled to make their Web pages friendly to a wider variety of browsers.

Still, a much bigger problem looms ahead for Apple. That Redmond pulled the plug on IE for Apple was hardly a surprise. After all, Jobs & Co. must have expected some reaction when it released Safari. But far more daunting is the prospect of Microsoft abandoning the Mac version of its popular Office software. That's because Apple hasn't yet shown it can replace Office for most of its users. And without Office, Apple's whole "switchers" program to convert Windows users will probably run aground.

Microsoft Word, Entourage, Excel, and PowerPoint are key bridges between the two worlds. Remove them, and buying a Mac suddenly looks a lot scarier. Microsoft swears six ways to Sunday that it's going full-speed ahead in developing the next version of Office for Mac. And the Redmond team says it'll ship software this summer that will allow Apples running Microsoft's Entourage e-mail client to hook into the dominant corporate e-mail and scheduling program, Microsoft Exchange. "The relationship is as strong as ever," says Jessica Sommer, product manager at Microsoft's Macintosh Business Unit (Mac BU).

LOOKING LESS VIABLE. Perhaps. But I'm having trouble seeing why Microsoft would continue throwing a significant amount of resources - the Mac BU has 150 coders -- at a computing platform with a market share of only 5% of the installed PC base, according to Apple itself. Software works as a business when it scales to larger numbers of buyers. That's because once a program is developed, the cost of selling an extra unit is virtually nil.

So selling to smaller markets means, necessarily, smaller profits. As Microsoft seeks to squeeze out more income with Linux slowly eating at the edges of the desktop market and overall tech sales stagnant, support for Apple will look less like a viable business and more like foolish charity. As Linux matches Apple's market share and looks increasingly like a real competitor, any antitrust benefit to Microsoft for keeping Apple around has all but disappeared. Of course, the Bush Administration has hardly pursued antitrust with anything resembling vigor. Apple did not answer repeated requests for comment about the chances of Office for Mac being axed.

The solution for Apple isn't simple, either. It has to maintain that vital bridge to the rest of the computing community, which thus far Office for Mac has held open. That could prove expensive and time-consuming. It would suck up an enormous percentage of Apple's development resources. Remember, Microsoft can build Office for Mac with 150 developers, but they also have the keys to the kingdom: access to Redmond's proprietary source code for Office for Windows. That makes it much easier to build Apple software that's fully compatible with the Windows world. Should Apple have to go it alone, making an Office for Mac work that well could prove far more difficult.

KEEPING SECRETS. Yes, open-source Office clones are now available for Mac. But all have some compatibility problems. Worse still, they're open-source. That's anathema to Apple. From Day One, Jobs has made sure that the final software layer between Apple and its users remains proprietary. That layer, the vaunted Mac user interface, is Apple's key selling point. Surely Apple would want to continue that ease of use into the most popular applications for its platform -- the Office-like programs.

So if Apple chooses to replace Microsoft Office with an open-source version, Jobs would have to make a hard choice. Should he let the open-source community peek at his proprietary code to build Office clones that work more effectively on Macs and have the same smooth feel that Mac users expect? While Jobs most likely gives that access to the Mac BU at Microsoft, he would be far less likely to give it to open-source software companies, even under strict provisions to protect intellectual property.

That's because open-source coders would have a hard time keeping Apple's secrets a secret. The very nature of their business is to build on ideas in open collaboration. Even if they made extraordinary efforts to keep Apple's proprietary code under wraps, one can hardly expect them to conveniently forget whatever it was they learned to code for Apple when coding on other open-source platforms.

APPLEFIED BROWSER. Could I be wrong about the Mac BU being in jeopardy and Apple facing a tough choice between open-source Office software and expensive in-house development? Maybe. Many Mac watchers believe Microsoft banks big bucks on its sales to Apple users. Gates & Co. has never confirmed this, but it has stated on several occasions that it views the Mac Business Unit as an entity that must meet its standard criteria for profitability.

Also, Apple may yet decide to more fully embrace open-source. Indeed, Safari is an open-source program. Jobs converted it from a Linux browser into his own Applefied version complete with publicly available source code.

The upshot of all this? Losing IE is no big deal. Safari works even better. Losing Microsoft Office, however, would create far thornier problems for Jobs. That possibility looks increasingly likely if Office for Mac can't clear whatever profitability hurdle Redmond has set for it. And with the Apple-Microsoft marriage having one less thing in common now, a final split may be the only move left. Salkever, Technology editor for BusinessWeek Online, is filling in while regular Byte of the Apple columnist Charles Haddad is on leave


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