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banner Thursday, 10 February, 2000, 17:00 GMT
Apple Computers: A brief history

Apple Stylish iMacs helped Apple regain some ground

Microsoft efforts to stop Apple threatening its core markets was one of the issues picked up by the judge to back up his view that Bill Gates' firm had behaved in a monopolistic way.

The two companies' histories have long been intertwined, although it was Microsoft which has come out as the undeniable winner.

Founded: 1976
Apple was threatened by Microsoft to give its Internet Explorer prominence over Netscape's Navigator. It was also encouraged to bow to Microsoft's wishes on its multimedia software
The key moment in their early years was when Microsoft handed out licences cheaply and widely for the operating system it had developed for IBM's first personal computer.

This move by Microsoft led to a series of IBM "clone PCs" being developed using the Microsoft operating system, something which helped establish it as the market leader and later the industry standard.

This was all despite the fact that Apple had what was generally felt to be the better system, but one which, disastrously, it jealously guarded.

Skirmishes between the two companies escalated, with Apple accusing Microsoft of improperly using some of its technology, in a legal action eventually finished in the early 1990s.

Large losses

By then Apple's co-founder Steve Jobs had long left the firm started in 1976.

One of his first steps when brought back to rescue the ailing firm in 1997 was to acknowledge that Apple had a better future as a friend of Microsoft than as an enemy.

By then, Apple's sales had collapsed, its products were not cutting edge anymore, Microsoft and Intel ruled the personal computer market.

Apple made a loss of $1bn, and its share price had dropped to $21.

The past three years have seen a revival of fortunes for the computer and software company.

Part of the impetus for this return to form was an alliance with Microsoft, which included the software giant investing $150m in it and pledging to developing Mac OS versions of its software.

iMac has rejuvenated

In the court case it was alleged that Apple had been coerced into these closer links by Microsoft.

Apple Computer's Avadis Tevanian alleged that Microsoft threatened to stop developing software for the Mac unless Apple dropped its support for Netscape's internet browser.

There were also allegations about threats to Apple to drop some of its other software developments.

But Bill Gates denied putting pressure on Apple to make Microsoft's Internet Explorer the default browser on the Mac.

The judge took the view that Microsoft's dominance had the effect of dissuading many other parties from developing software for Mac OS, in turn harming Apple's ability to build up sales.

There has been a surge in Apple sales in the past 18 months thanks to its colourful iMac computers.

During the last three months of 1999, Apple sold 1,350,000 Macs, or - in Steve Jobs' words - "one Mac every six seconds".

The company ended 1999 with a profit of $601m and its shares are now trading at just above $100.

And yet ... this level of sales would have to continue for some time to come, if Apple is to threaten the overwhelming dominance Microsoft's operating system has in the market place.

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