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Technology Stocks : Apple Inc.
AAPL 259.48+0.5%Jan 30 3:59 PM EST

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To: soup who wrote (4045)8/12/1997 8:49:00 PM
From: Scott Crumley   of 213183
 
soup, David, JR, Linda etc., i.e., everyone that has a clue,

Get a load of this horse pucky from IBD. Can't provide a link as it was taken from email.

Scott

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There's no question the operatingsystem ball is firmly in
Microsoft Corp.'s hands now. What everyone wants to know is whether
the software titan will run with it.
Depending on who you talk to, Microsoft took the technological
mantle from Apple Computer Inc. of Cupertino, Calif., anywhere from
last month to three years ago. Its Windows operating systems now are
on par or surpassing Apple's operating systems, analysts say.
At the very least, Microsoft's lead became apparent when Apple
unveiled its new Mac OS8 software last month. Apple offered no
technological breakthroughs, while Microsoft shortly afterward
discussed a number of new innovations it would be inserting into
Windows 98.
"I didn't see a lot of improvements (with OS8), to be honest with
you," said Bob Tasker, an analyst with The Yankee Group in Boston.
"(Mac users) are telling me, 'Don't bother buying it.' "
And it looks as if the Microsoft advantage is here to stay. The
company is spending $2.6 billion this year on research and
development, nearly one-third of Apple's revenue.
The debate over operating-system superiority has raged since the
computer industry's infancy in the early '80s. Apple was deemed the
winner most of the time, getting high marks for ease of use and its
graphic interface.
At times the dispute also erupted into legal entanglements, with
Apple accusing Microsoft of stealing its idea for a graphical user
interface.
Last week, Redmond, Wash.-based Microsoft and Apple said they
would drop their long-running patent disputes and they signed a
cross-licensing deal. That seemed to some industry watchers a
symbolic acknowledgement on Apple's part that Microsoft has taken
charge.
For a $150 million investment in Apple stock, Microsoft bought the
right to have its Internet Explorer be the default browser on future
Apple machines. It also agreed to develop new versions of its Mac
application software for Apple's new operating system.
Martin Reynolds, an analyst with Dataquest Inc. in San Jose,
Calif., says there may be other implications of the deal down the
road. The cross-licensing agreement could give Apple a crutch to
rely upon.
An example of that could show up in Apple's upcoming Rhapsody
operating system, due out in mid-'98, Reynolds says. Rhapsody
essentially is Apple's answer to Microsoft's Windows NT, a system
designed mostly for commercial users that is considered more robust
and secure than current Apple systems.
Should Rhapsody fall flat, Apple can simply use an NT base and
insert its own graphic interface into a business operating system,
Reynolds says.
"Apple needs an operating system that is equal to NT," Reynolds
commented.
Apple, however, is struggling with plummeting market share,
management turmoil and mounting losses. Chairman and Chief Executive
Gilbert Amelio was forced out of the company by the board in July and
a replacement has yet to be found.
Among the new Mac OS8 features are faster shortcuts and the
ability to copy files while simultaneously performing another
function. It also enables users to create folders containing certain
documents. These can be minimized at the bottom of the screen for
easy access with a single click.
Does that last feature sound familiar? It should. It's something
that Windows 95 has been doing for two years.
But Apple officials remain positive about OS8's release.
"I think Mac OS8 stacks up really well with what Microsoft is
shipping today," said Peter Lowe, the Mac OS8 product manager. "We
feel they're doing some interesting things, but we're trying to
appeal to a broader range."
Analysts say take another look. It is Microsoft that is appealing
to the broader range, as evidenced by its 80%-plus market share. And
now it seems to be moving operating-system technology forward,
although it may be at a more conservative pace than Apple has moved
in years past.
Among the new technologies that Microsoft is including in Windows
98, due out early next year, is full integration of the Internet
browser into the operating system. Links to Web addresses would be
maintained on the operating system and called up with a single click.
Jonathan Roberts, Microsoft's director of Windows product
management, says the company plans to integrate some Web browser
features into operating systems. They include single clicks to
applications - to be included in Windows 98 - and the ability to move
back and forward from application to application.
Roberts says Microsoft no longer worries about Apple as a
competitor and hasn't for two years. Instead, it's focused on
"Internet opportunities," he says.
Future technologies include personalized user interfaces, which
highlight favorite applications and Web links for any number of users
on a computer.
Beyond that, Microsoft is working on getting a computer to do some
thinking for itself. One new feature in Microsoft's Office '97 is
its ability to perform grammar checks.
Microsoft wants to expand that function to get computers to
understand word meanings -a tool that may be useful in Web searches.
Now that Microsoft appears to be comfortably in front, will it
make the strides in technological innovation that Apple has?
Analysts say if Microsoft can't make a technology themselves, they'll
buy it.
"If they see an opportunity, a company with a technology they
think is important, they have aggressively sought to partner with
that company or they've bought it," said Jim Balderson, an analyst
with Zona Research Inc. in Redwood City, Calif.
Other analysts say Microsoft will stay measured in its approach.
The Yankee Group's Tasker says Microsoft tends to stick with no-
nonsense products that appeal more to corporate chief financial
officers than to technical experts.
"Microsoft is the absolute major force in operating-system
markets," he noted. "No one is talking about getting off Intel and
going to a Mac."
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