Chapter 40 Chapter Six

On August 6, 1997, when the Apple Macworld exhibition was held in Boston, Jobs had not yet been named as Apple's interim CEO.It was at this exhibition that the audience and media reporters first learned about the change of Apple's board of directors and Jobs' entry into the board of directors.At that moment, everyone understood that Jobs became the de facto leader of Apple. Immediately afterwards, Jobs stood on the podium and announced another news that was as explosive as a nuclear bomb: Apple and Microsoft reached an agreement on cross-licensing the use of patents and technologies, and Microsoft agreed to invest in Apple and pay patent royalties. A protracted patent lawsuit between two companies.

In the eyes of outsiders, this news is like two bloody enemies who are fighting fiercely on the street, suddenly stop their fists, embrace tightly, extend the most cordial condolences to each other and start calling each other brothers. What is even more jaw-dropping is that the image of Bill Gates appeared on the big screen at the scene before Jobs finished speaking.Gates said hello to all the "fruit fans" present.There was an uproar in the venue.People can't help but wonder, has Apple surrendered to Microsoft? "Apple has got to think outside the box," Jobs told a skeptical audience. "It has to put behind it the idea that Apple wins and Microsoft loses."

It's just unbelievable. In fact, the decision was reached just hours before the show.The ins and outs of this matter have to start with the lawsuit between Apple and Microsoft. Apple is a company that loves to litigate.A large number of companies such as Microsoft, Hewlett-Packard, HTC, and the Beatles' Apple Records have all been Apple's defendants. In 2008, Apple even brought New York City to the dock, suing that the logo designed by New York City violated Apple's trademark rights.But when it comes to protracted and weird, it's the lawsuit between Apple and Microsoft.

Fundamentally, Apple and Microsoft are a love-hate relationship. The root of "hate" comes from market competition. Since Microsoft is on the side of the PC camp, the two companies are of course rivals.A long time ago, the two companies fought a lawsuit over the BASIC language interpreter used on the Apple II and Macintosh. In 1988, Apple took the GUI again and sued Microsoft for stealing Apple's GUI technology. Anyone who knows the business understands that this kind of prosecution is tantamount to a thief calling for a thief.Originally, Apple's graphical interface technology was "borrowed" from Xerox, and Apple had previously authorized Microsoft to use related patented technologies for the development of Windows 1.0.However, when Microsoft began to develop Windows 2.0, Apple felt the direct threat from the software giant, so it filed a complaint in the court.When Microsoft began to develop Windows 3.0, Apple added several additional prosecution requirements.

There is a widely circulated joke that during the prosecution process, Sculley and Gates discussed the settlement plan in private.Gates said to Sculley: "Windows didn't copy the Mac. You know, both of us actually learned GUI technology from Xerox. Since you broke into Xerox's house and stole the TV, why not Allow me to break in and steal the stereo?" Indeed, if both the plaintiff and the defendant are suspected of stealing, the court will not easily support the plaintiff.Among the 189 patent technologies related to GUI listed by Apple, the court held that 179 of them had been authorized by Apple for Windows 1.0, and the remaining 10 were not among the patentable technologies that could be protected.

The lawsuit went back and forth between the District Court, the Court of Appeals, and the Circuit Court. There were many appeals and judgments, but there was still no clear result.Apple and Microsoft tossed for four or five years, and each spent tens of millions of dollars in litigation costs. At the same time, the "love" element between the two companies has emerged from time to time.Of course, even if they are "in love", it is also a stumbling love. In 1984, Apple shocked Microsoft with the release of the Macintosh.At that time, Microsoft was developing the spreadsheet software Excel.Seeing that the Macintosh is so leading, Gates began to drum in his heart. If he put all his treasures on the IBM PC, would he regret it in the future?Therefore, Microsoft took Excel as an opportunity to officially start developing software for the Macintosh.Gates even promised Apple that he could devote one-third of Microsoft's development resources to the Mac version of Excel.But Jobs at the time was wary of Gates' courtship.

Apple’s marketing director at the time, Mike Murray (Mike Murray), who later joined Microsoft, recalled: “Jobs believed that Gates would steal good ideas from the Mac and use them in the Windows that Microsoft was developing. During the project cooperation, Jobs would call Gates, and Gates would draw on a whiteboard everything Microsoft was doing and say, 'I shouldn't have told you this, but I'm going to tell you everything we've done. ’ Gates drew a roadmap for Windows and flew back to Seattle.” Because Murray was a friend of another giant at Microsoft, Steve Ballmer, Gates would call Murray and say, "Mike, what the hell are we going to do? Yelling. I don't know if we should keep making Mac software."

Murray would comfort Gates and say: "Bill, please just drive full speed, we need you." In early 1985, Mac sales were in decline.Microsoft's side began to waver again. Gates worried: "Apple may not be able to do this well." Ballmer said: "Well, we can help them. But we have to assume that they themselves clearly understand all the situations and are also anxious about the same problems." In this way, there are both protracted and stalking lawsuits and intermittent and faltering software cooperation.On the one hand, the two companies are fighting to the death in the market; on the other hand, Microsoft needs Apple's patented technology, and Apple needs Microsoft's IE browser and Office office suite.

No one could untie the knot until Jobs returned. After Jobs returned, the leader keenly saw that untying this knot might be the winner of saving Apple. The most important point here is the office software and IE browser developed by Microsoft for Apple.Office software has been the biggest reason people use personal computers since the Apple II era.When Microsoft Office has already monopolized the office software market, once Apple breaks with Microsoft, people will have no reason to buy Apple computers.The browser represents the future of network applications. Without a good browser, Apple computers cannot truly integrate into the Internet.Therefore, in terms of software cooperation, it is more beneficial for Microsoft to be Apple's friend than to be Apple's enemy.

In addition, whether Apple authorizes Microsoft to use patents or sues Microsoft for infringement, neither party will benefit from the tangled lawsuit.Conversely, if the two companies abandon their previous feuds, especially if they can attract Microsoft to inject capital into Apple, it will be a blessing in disguise for Apple, which has tight cash flow. On the other hand, this kind of cooperation is also beneficial to Microsoft. Not only will it allow Microsoft to obtain approximately US$300 million in annual profits from the Mac software market, but it will also dilute Microsoft’s increasingly negative monopoly image in the market. The monopoly investigation played a positive role.

After understanding the stakes, Jobs would not care whether this cooperation is a surrender.With the charisma of a rock star, he took only a few weeks to get his old rival Gates and signed a mutually beneficial cooperation agreement with Microsoft. Microsoft agreed to continue developing the Mac version of the Office suite and Internet Explorer for the next five years.Apple is committed to using IE as the default browser.Microsoft paid Apple an undisclosed fee for the patented technology, and at the same time subscribed for 150 million US dollars of non-voting Apple shares in exchange for the settlement of the patent lawsuit between the two parties. As soon as the news was announced, Apple's stock price rose by 33% on the same day, which shows that this cooperation has brought Apple back to life. It should be said that the cooperation between Apple and Microsoft is emotionally unacceptable for "fruit fans" and even Apple employees.But Microsoft's capital investment has indeed become an important factor for Apple to get out of trouble.In a sense, under extremely difficult circumstances, Apple’s compromise and seeking help from Microsoft is a sign of recklessness.Temporarily making compromises, and even being called a "surrenderer" by fans, all these are for the later comeback.A few years later, when Apple's own wings were growing, it began to independently develop the Safari browser to replace Microsoft's IE browser.In contrast to Microsoft, the $150 million Apple shares they subscribed for were later sold prematurely, and only returned about double the return, but missed the growth space of dozens of times thereafter. Jobs, who likes to think strategically, will not be limited by the "surrender" in front of him. What he sees is that the future Apple computer cannot do without the support of browsers and office software.If Apple wants to make a comeback, it must have the heroic spirit to smile away all grievances and enmities.