Microsoft Saved Apple - The Biggest Myth in Tech History

Summary

This video debunks the popular myth that Microsoft saved Apple from bankruptcy in 1997. The $150 million investment by Microsoft was a result of a patent settlement, not a philanthropic act. Despite financial losses, Apple had significant assets and was not in immediate danger of collapse. The company’s recovery was driven by new leadership under Steve Jobs, a revamped product strategy, and successful products like the iMac and iBook. The video clarifies that Microsoft’s investment did not save Apple, and the narrative of Microsoft’s rescue is misleading.

Takeaways

• 😀 Microsoft’s $150 million investment in Apple was not a heroic rescue, but a settlement over patent disputes regarding QuickTime.
• 😀 Apple was not on the brink of bankruptcy in 1997. They had billions in assets and could have survived longer without Microsoft’s involvement.
• 😀 The narrative that Microsoft saved Apple from bankruptcy is a common misconception, popularized by public commentary and media, but lacks factual backing.
• 😀 The investment from Microsoft was more about public relations than financial salvation, as it was a result of a legal settlement rather than a voluntary investment.
• 😀 In 1997, Apple was losing money, but its worth was still in the billions, and it was not as financially desperate as many believed.
• 😀 Apple’s recovery came from new leadership and innovative products like the iMac and iBook, not from Microsoft’s financial intervention.
• 😀 Even if Microsoft had made the investment voluntarily, it would not absolve them of their monopolistic practices or reduce the validity of the antitrust case against them.
• 😀 Historical articles from that time, such as from Wired and CNET, support the argument that Microsoft’s financial move was a PR gesture, not a true bailout.
• 😀 The $150 million from Microsoft was a drop in the ocean compared to their other expenditures, like the $450 million spent on WebTV.
• 😀 Apple’s path to profitability and success was not directly tied to Microsoft's settlement but to strategic changes within the company, including new products and management.

Q & A

What was the common belief about Microsoft’s 1997 investment in Apple?

The common belief was that Microsoft's $150 million investment in Apple 'saved' the company from bankruptcy.

What is the truth behind Microsoft's $150 million investment in Apple?

The investment was actually a legal settlement in response to a lawsuit filed by Apple against Microsoft for software piracy related to QuickTime. It wasn't a goodwill gesture to save Apple.

How did Apple's financial situation look before the Microsoft investment?

Despite losing money in 1996, Apple had substantial assets, including over $5 billion in value and $1.5 billion in cash, meaning it was not on the verge of bankruptcy.

Why did Microsoft agree to invest in Apple in 1997?

Microsoft's $150 million investment was part of a legal settlement over a lawsuit in which Apple accused Microsoft of using their QuickTime code in Microsoft's competing software, Video for Windows.

How significant was the $150 million investment to Apple's survival?

While the investment helped Apple financially, it was symbolic rather than a lifeline. Apple had the financial resources to survive without it.

What really turned Apple around in the late 1990s?

Apple's recovery was driven by the return of Steve Jobs, new leadership, innovative product strategies, and the success of products like the iMac and iBook.

Was Microsoft's investment aimed at showing they weren’t a monopoly?

No, Microsoft’s investment in Apple was not an effort to prove they weren’t a monopoly. It was related to resolving a legal dispute over software piracy, not addressing antitrust concerns.

Did the $150 million investment absolve Microsoft of antitrust issues?

No, the investment did not absolve Microsoft of their antitrust issues. The antitrust case against Microsoft was focused on their monopolistic practices with Windows and Internet Explorer, not their involvement with Apple.

How did Microsoft's business practices affect the tech industry in the late 1990s?

Microsoft's dominance and anti-competitive business practices, such as bundling Internet Explorer with Windows, were at the core of the Department of Justice's case against the company, reinforcing their monopoly status.

Why do some people still believe Microsoft saved Apple?

This misconception persists largely due to how the investment was portrayed in the media and the public's simplified view of the event. The idea of a big tech company rescuing a struggling one is an appealing narrative, but it doesn't reflect the true circumstances.