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JUNE 18, 2003
By Alex Salkever Apple's Real Worry Isn't the Loss of IE [Page 2 of 2] 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 Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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