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Last Updated: Thursday, 28 December 2006, 00:33 GMT
Changes for Microsoft and Apple
Both Microsoft and Apples' years have been dominated by major changes. In Microsoft's case it was the release of its new operating system and for Apple the big change in 2006 was integrating Intel chips in its machines.


Microsoft launching Vista for business users in Japan
Microsoft launched its new operating system this year

One of the most talked about topics around Microsoft this year has been the anticipation of a product that it doesn't launch to consumers until next year - its brand new operating system Vista.

Vista has been five years in the making and has involved 10,000 people with an estimated price tag of 10bn.

Business users got first glimpse of the new system in November but home users will have to wait until the end of January.

Microsoft promised the operating system would be its most secure yet although there have been complaints from anti-virus vendors that their products do not work properly with the new system.

Forrester analyst Ray Wang believes it will prove a hit with consumers.

"There is pent-up demand for its useablity," he said.

Rival to YouTube

Microsoft may have beaten Sony and Nintendo in the race to bring out next-generation consoles but in the sphere of music it is lagging well behind Apple.

To redress this, Microsoft offered its Zune music player to the world - or, at least the US - in the autumn.

The player was met with mixed reviews. Critics admired its hard-wearing rubberised shell, large screen and ability to swap music wirelessly with other Zunes. They were less impressed by its overall functionality and the limitations on sharing songs.

Most saw potential but did not think it was going to seriously impact iPod sales in the near future.

Like its rivals Microsoft was keen to grab a slice of the video-sharing pie. In September it launched a rival to YouTube.

Soapbox will form part of MSN video. It is hoped it will revitalise its home-grown user-generated content - while YouTube has 34m visitors each month, and MySpace attracts 17.9m, MSN Video is getting just 12m.

MSN Video was once the most popular video site until fans of user-generated content propelled YouTube, MySpace and Google past Microsoft.

2006 saw the bedding down of Windows and Office Live. Announced at the tail-end of last year it was the software giant's push into online software services, in what was seen as a move to counter rivals like Google and Yahoo.

'Morale boost'

Microsoft founder Bill Gates called it a "revolution" and described it as the firm's biggest strategic shift in five years.

Vista, the launch of its Live Services and the success of the Xbox 360 have all been highlights for Microsoft thinks Mr Wang.

The subtle shift in Microsoft's strategy cannot be underestimated he believes.

"Vista is out of the door, the EU anti-trust litigation is almost over, staff at Redmond feel they are going in a better direction and Microsoft is investing more in its employees. Morale is a lot better," he said.


Steve Jobs at the announcement of new iPods
There were fewer product launches from Apple than some expected
In terms of products 2006 has been a relatively quiet year for Apple. Instead it has concentrated its efforts on the big shift to Intel chips, announced at the beginning of the year.

The launch of the MacBook range of laptops brought a redesign to the shelves of Apple stores, but the MacBook Pro kept the design intact while adding significantly more processor grunt and options.

But Mac fans are gearing up for some exciting announcements at January's MacWorld, the traditional platform used by Apple boss Steve Jobs to reveal new products.

Although Apple has given no indication that it is even working on a phone, most experts are expecting the "iPhone" to be one of the things announced at January's MacWorld Expo.

"The rumours point to it being very small, possibly with a fold out keyboard for chat facilities, probably with a camera built in and, of course, an iPod," predicts MacWorld editor Mark Hattersley.

Codename iTV

Mr Hattersley is also expecting a widescreen iPod, which would sit nicely with deals Apple has done with TV companies and Disney subsidiaries Pixar, Touchstone and Miramax, to offer films and TV shows to iPod owners.

Unusually Apple took the step this year of pre-announcing the release of a device - codenamed iTV - which will allow people to move their movies and other media from their iPod to other devices such as the TV.

iTunes remains the most popular legal download music store and in December Apple denied figures from Forrester research which suggested that sales for iTunes had fallen by 65% in the first half of 2006.

Sales seemed healthy enough when in February a teenager in the US bought Coldplay's Speed of Sound , which became the billionth tune to be downloaded from iTunes.

Apple has also faced two high profile court cases. The first pitted it against Apple Corps, the record company behind Steve Jobs favourite band. The court ruled that Apple Computer could continue to use the Apple logo on its iTunes store, although there is likely to be an appeal.

The second, with rival Creative, proved more expensive. Apple paid 52m to Creative in an out of court settlement following a row over patents. Creative was also granted the right to make accessories for the iPod.

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