Microsoft May Slice Into Apple With Windows Software
Twice before, Microsoft Corp. unveiled computer software designed to give IBM computers and their clones the easy-to-use features of Apple Computer Inc.’s popular Macintosh. Both efforts fell short.
In its third try, to be unveiled today, Microsoft seems to have a hit.
Experts say the newest version of Microsoft’s Windows successfully replaces the technical commands of most IBM computers with friendly on-screen graphics.
The development is being hailed by many computer experts as a watershed event for the Redmond, Wash.-based software company led by multibillionaire Bill Gates.
Microsoft will present Windows at news conferences today in New York and several other cities in the United States and around the world.
In addition to lots of publicity, the introduction of the software has grabbed the attention of Microsoft’s competitors and pushed the price of Microsoft shares to a new 52-week high.
Windows could spell trouble for Apple by ending the dilemma of many computer buyers: whether to buy a user-friendly Macintosh or an IBM or IBM clone, which are harder to use but generally cheaper and compatible with many office systems.
For Apple, “it means they have seen their innovation lead in the market diminished,” said Rick Sherlund, a computer analyst at Goldman, Sachs & Co.
Paine Webber Inc. analyst Stephen K. Smith last week downgraded his rating of Apple stock from “neutral” to “unattractive” due to Windows. Smith hailed the new version of Windows as the biggest software development since the advent of 1-2-3, the spreadsheet program from Lotus Development Corp. that is among the most popular computer applications.
Those opinions helped send Apple stock down by $1.75 a share Friday in national over-the-counter trading to close at $39.75, while Microsoft shares, also traded over the counter, rose $3.50 to close at $68.25. On Monday, Microsoft shares rose $2 more to close at $70.25; Apple fell further, closing at $39.50, down a quarter.
Apple, meanwhile, isn’t standing still. The Cupertino, Calif.-based company is expected to fight back later this year by introducing a low-priced version of the Macintosh. Apple also filed a lawsuit against Microsoft in 1988 contending that earlier versions of Windows--and, by implication, the new version--infringe on Macintosh patents. The case is pending.
Many experts say the Macintosh still is tops for graphics-intensive uses, such as desktop publishing.
“Any user that really needs high-end graphics processing is still going to go with a Macintosh right now,” said Nancy McSharry, an analyst with International Data Corp., a high-technology research firm.
Microsoft denies that it is trying to edge out the Macintosh. Russ Warner, a Microsoft executive who headed the Windows development unit, says it would be crazy for the company to target the 7% of the computer market that uses the Macintosh, instead of the estimated 85% that uses IBM computers and their clones.
“We’re talking about getting those 85% to understand the benefits of graphics,” Warner said.
Most IBM machines and compatibles use an operating system call MS-DOS, which was developed by Microsoft. Operating systems allow a computer to perform such basic functions as opening files and responding to keyboard commands.
But MS-DOS is notorious for its complexity. It requires computer users to learn complex typed commands.
Windows, a type of program called a graphical user interface, shields users from these arcane commands by replacing them with on-screen pictures called icons.
For example, instead of having to type a command telling the computer to print a file, Windows provides a representation of a printer. The user moves the cursor on the screen to the printer icon and pushes a button on a hand-held device called a mouse to print the file.
Windows software was introduced in 1985, later followed by a second version. But computer experts said neither provided a true competitor to the Macintosh.
The new version of Windows, which will sell for $149, is vastly better than its predecessors, they say. In addition to providing a graphics-based way to operate computer functions, it can run several applications programs at once in different sections of the computer screen, called “windows.” It also greatly expands the amount of computer memory available to users.
Microsoft is expected to get a major boost from Windows. The company says the potential market for the software is about 30 million of the personal computers already in use, in addition to new computers.
Shearson Lehman Hutton Inc. projects Windows and related products will reap nearly $500 million in revenue for Microsoft in the fiscal year that starts July 1.
Windows also is expected to help companies that make applications programs, such as word processing and spreadsheets, since computer users must buy specially tailored versions of these programs to gain the advantages of Windows. Among major makers of these programs is Microsoft itself.
Windows also is expected to have an impact on an alternative operating system for personal computers developed by Microsoft and International Business Machines Corp., called Operating System 2, or OS-2.
OS-2 was promoted as a graphics-based system for IBM personal computers when it was introduced in 1987. But it has failed to catch on, in part because it requires many computer users to upgrade the memory capacity of their machines.
