Would MS breakup harm Apple?

News analysis: MacWEEK contributor Tony Smith says that splitting up Microsoft wouldn't mean an automatic win for the Mac maker.

LONDON -- Monday's proclamation that Microsoft is guilty of a series of antitrust violations presumably sent whoops of joy through the Mac faithful, particularly if the volume of "Apple will rule" postings on the financial bulletin boards is anything to go by.

For now, "Apple will rule" is a very unlikely outcome. To be honest, it's an unlikely outcome no matter what happens next. The real test will come when Judge Jackson passes sentence on the software giant, and this won't happen for at least a couple of months. Much also depends on whether Microsoft gets anywhere with its already announced appeal.

The current uncertainty no doubt explains why Apple (aapl) is, officially at least, keeping its mouth shut with a strict "no comment," even though the judge specifically mentioned the threats Microsoft made to Apple (to promote Internet Explorer as the main Mac Web browser or have development of the Mac version of Office canceled) in his Conclusions of Law.

Apple is right to be cautious. Any penalties forced on Microsoft are not necessarily going to benefit Apple, and could even harm it. You might not think that would be the case, given the desire in all this to protect the consumer, but it could well happen that way.

Take the proposed breakup of Microsoft, in particular the much-discussed separation of its productivity applications business from the rest. The motivation here would be to break the hidden ties between Windows and Office. Fine, but Office Inc. would by necessity operate a different business model than Microsoft as a whole would. That could easily force the newly independent company to consider its support for the Mac carefully indeed. Perhaps it would be better off devoting its development efforts to a Linux release?

For all the pressure Microsoft applied to Apple, its very need to appear to be supporting platforms other than its own ensured the survival of the Mac versions of Word, Excel, PowerPoint and company. True, there was a financial case to be made too, but with the collapse in the price of office suites, falling from around $500 to around $100, that case has weakened over the last five years or so. That was the nature of its threat: Microsoft could afford to cancel Mac Office development, but Apple couldn't.

God knows there's plenty of Microsoft software that the company hasn't released for the Mac, and it does make you wonder whether the software was maintained solely as a club to beat Apple with if it got too uppity.

Of course, a full-scale Microsoft breakup remains an unlikely trial outcome. Microsoft may be forced to spin off some of its non-core operations, in particular its online business. That's not only less central to Microsoft's operation as a software company, but it's a little too close for comfort to the company's schemes to dominate access to the Net. Spinning off the online business, perhaps along with other non-core operations such as games publishing and the hardware business, might well be in the cards, even though a complete breakup may not be. All these areas lie within Microsoft's Consumer Division, the others being Windows and Business Productivity.

The one aspect of a breakup that might help Apple would be the spinning off of Windows itself, or rather leaving Microsoft offering just the operating system and little else. The advantage here lies in PC vendors choosing alternatives to Windows, such as Linux or Solaris, Sun's version of Unix. Over time, with a wider variety of operating systems to offer up front, the coupling in buyers' minds between the PC and Windows would be broken. That would leave the Mac as one hardware/OS combination among many and therefore less likely to be dismissed as "incompatible with the industry standard."

Unless, of course, Linux became the de facto industry standard, though an Intel version of Mac OS X might work wonders in such a situation. Or Windows' dominance is maintained simply because so many people have gotten so used to it. Just because investors appear to be dumping Microsoft stock in droves doesn't mean users will.

There's also a very real downside for Apple in the breakup of Microsoft. As market research company IDC reported last December, splitting up Microsoft might actually do it some good. When you're in a dominant position, it's easy to rest on your laurels, and your products suffer accordingly. Just look at SyQuest and now Iomega. IDC's argument posits a pared-down Microsoft being forced, thanks to increased competition, to address the "bloatware" and performance issues of Windows more keenly. The report describes a more compartmentalized Windows -- you can't now develop everything, so focus on the parts you're best at -- that allows users to select the features they want rather than the features Microsoft believes they should have.

The upshot would be a tighter, more responsive operating system, and that's the last thing any of Microsoft's OS competitors want. And Apple -- for all of Steve Jobs' "we lost the OS war" comments -- is an OS competitor, doubly so when Mac OS X ships.

Then again, a more componentized (horrible word, that) Windows would be one, in IDC's view, more open to third-party components, and that would provide Apple with some interesting opportunities. Aqua for Windows, anyone? Apple could certainly grow support for QuickTime by offering a version more tightly integrated with Windows -- it could even become the de facto standard Windows multimedia engine. And of course, Mac OS X would be the only OS that offered all of these choice items.

The point here is that no matter what the final outcome of the Microsoft trial, Apple will continue to operate within a highly competitive environment. The playing field may be more level and not so easily tilted by a single, strong party, but a playing field it remains. Hopefully, Apple appreciates this and its silence is a sign it's more interested in winning the game rather than reveling in one player's tribulations.

Tony Smith is managing editor at The Register, the IT industry newswire with attitude. He welcomes comments, leaks, tip-offs and industry gossip at tony.smith@theregister.co.uk.