REDMOND, Washington (Reuters) - Apple Computer Corp.'s
(AAPL.O) new OS X operating system is now in stores, with
company loyalists praising its beefy multimedia features and
gee-whiz graphical effects.
But success of OS X (pronounced "OS Ten ") largely hinges on
one-time Apple rival Microsoft Corp. (MSFT.O), which makes the
Office software suite that is crucial to Apple's survival.
Following Apple's mass-market launch of the system last
weekend, Microsoft is building steam behind a new version of
Office tailored to tap the platform's power.
Office v.X won't go on sale until November, but Microsoft
has now fired up a $6 million marketing campaign that was put
on hold after the Sept. 11 hijack attacks.
OS X represents a massive overhaul for Apple's Macintosh
computers, and the company is banking on fresh styling, crisp
graphics and rich audio and video features to win hearts.
However, analysts say it is up to Office to transform the
new platform from a toy for graphics professionals to a tool
for mainstream users like small businesses and students.
"It's always been a cart and horse issue because
applications make the OS (operating system). Without this,
Apple would have heck of a time moving OS X at all, " said Rob
Enderle, an analyst with Giga Information Group.
Office consists of the Word word processor, Outlook e-mail
and calendar program, Excel spreadsheet and PowerPoint
presentation software. The Mac version also contains a Mac-only
application called Entourage that combines contacts, calendar
Office dominates the market for business productivity
software and is Microsoft's biggest money maker, even ahead of
its Windows operating system.
A famous 1997 deal saw Microsoft invest $150 million in its
ailing rival, ensuring that the company would continue to make
versions of Office for Apple.
The previous Mac edition of Office released last year
marked a new strategy by Microsoft to get Apple users to buy
the product not because they had to, but because they actually
liked it. Everything from the software's interface to packaging
to advertising was geared to appeal to Mac users.
Aqua, Genie and Quartz
The same strategy has guided Office v.X development.
At front and center is a new look based on OS X's
blue-themed Aqua interface, which creates a water-like
"Everything inside Office X has been completely redesigned.
The interface has been ripped off and replaced with an Aqua
interface. No expense has been spared, " said Mike Connolly,
group program manager for Office in Microsoft's Macintosh
Office v.X also uses OS X features like Genie, which causes
menus and windows to vanish as if sucked into a bottle when
closed or minimized.
Another OS X technology called Quartz can draw lines and
circles sharper than ever, resulting in crisp charts, graphs
The result is a product that is very different from -- some
say even superior to -- Office XP, the Windows version that is
Microsoft's biggest money spinner.
"It's actually pretty impressive, the fact that they are
able to use Aqua as well as they do, " Enderle said. "It doesn't
feel like a Microsoft product on top of the Mac. "
Said Office v.X product manager Erik Ryan: "We wanted to
prove to people once again that we are indeed Mac-like. We're
not Office XP for Mac, we're Office X for OS X. "
High demand already
Office v.X will sell for $499 for the full version, $299
for an upgrade, and $399 for the standalone applications of
Word, Excel and PowerPoint.
In an indication of demand for the new software, Microsoft
said a test version of Word for OS X had been downloaded more
than 50,000 times in its first week of availability.
There are an estimated 15 million Mac users worldwide and
executives have been quoted as saying they expect to sell
750,000 copies of the new Office by next June.
"What the community is waiting for is to get it (Office)
out there and give people a product suite to run on this OS. It
will give people a reason to go to the platform, " Ryan said.
It remains to be seen how Office for Mac will fit in with
Microsoft's long-term .NET strategy to put the Internet at the
heart of its products and turn software into Web-based
"We'll definitely be looking at what the Mac platform needs
in the product space over the next few years. We're going to be
continually investing in the Mac, " Connolly said.