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The way Microsoft saved Apple from bankruptcy

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Avatar for Jisan203
Written by   9
1 year ago

Apple is one of the most successful companies in the world today. In addition to the ubiquitous demand for their products, there is a loyal consumer segment. So it is no surprise that Apple has emerged as the first trillion dollar company in the American stock market. But 20 years ago today, Apple once reached the brink of bankruptcy. The most interesting thing is that Steve Jobs could not save Apple from this situation then, but their business rival Microsoft saved Apple then!

Images of the nineties

In 1997, Apple was considered the only computer maker, as smartphones had not yet been invented. The name of Apple company was 'Apple Computer' then. The market value of their computers was relatively high, which made Apple less popular with users. In other words, at that time the company was gradually going down.

By the 1990s, most computers were made for commercial use. The main basis of computers was to have the necessary programs for the big companies to run the necessary software. This means that if the computer does not have the necessary programs for the software that you want to run on the computer for business purposes, then your computer will not be of any use to large companies.

In 1997, Microsoft's share market share was much higher, and almost all types of software were designed to be used on Windows operating systems. It is worth mentioning that Steve Jobs was not in charge of Apple at this time. In 1985, Apple's board of directors fired him. Apple's sales have been steadily declining since 1997, as well as Apple's share market share. When the situation did not improve after repeated changes to the company's CEO, Apple took the initiative to bring back Steve Jobs.

Apple Computer in 1998;

In February 1997, Steve Jobs bought a company called Next. After leaving Apple, he started this company himself. But Apple's financial situation was so miserable at the time that he didn't get any cash to buy 'Next', he got 1.5 million worth of Apple shares. Despite all this, Apple's existence crisis became apparent in late July, when there was still less than 90 days of money left in Apple's bank account. Despite being a 3 billion company, the company lost about 1 billion in just one year.

That announcement stunned everyone

Steve Jobs gave the biggest surprise at a conference on August 7th. He also confirmed Microsoft's partnership with Apple at the conference. "How to re-partner with the company that has thrown Apple into an existential crisis?" He told the conference

Today I am going to talk about one of our first and very important partners, which is Microsoft! Apple has included Microsoft's Internet Explorer browser as the default browser for their Macintosh computers. In addition, Microsoft has announced the purchase of 150 million shares of Apple at a market price. These shares are non-voting shares. The second is that Microsoft will allow Apple to use their office freely for five years.

Image Courtesy: YouTube

One thing is for sure - the shares that Microsoft bought were non-voting shares. In other words, Microsoft is not going to partner with Apple, but is only funding them. The lack of usability of the software on Apple's Macintosh computers was essentially keeping Apple out of the competition. And that's when Bill Gates got rid of the Macintosh software problem. But why did he do it? Why did Bill Gates save Apple from the death of his closest rival at the hands of Microsoft?

Why help Apple?

We now know Bill Gates as a generous and generous man. But he was not like that 30 years ago. He was willing to take any kind of way to succeed in business, even if it brought something bad for someone else.

The steps that Gates took to succeed in business brought success to Microsoft. Microsoft was so successful that it caught the eye of high-ranking policymakers in the American Department of Justice. The company has been preparing a lawsuit against Microsoft since 1993. In 1998, the US Department of Justice filed a lawsuit against Microsoft for violating the Sherman Entry-Trust Act. They allege that Microsoft is trying to stifle competition by dominating the market.

In fact, Microsoft really wanted to capture the exclusive market in the web browser business by integrating the Internet Explorer browser with the Windows operating system they created.

Microsoft's exclusive attitude

Web browsers were not free at that time. Web browsers like Netscape Navigator, Opera had to be bought from the store. Now Microsoft wants to integrate their Internet Explorer browser into the Windows operating system so that users don't have to buy a separate web browser. And so Microsoft will have an exclusive influence on the market.

Microsoft wins

.Bill Gates did not want his company to collapse through a long legal battle. By helping Apple, Bill Gates wanted to prove that he did not believe in monopoly business, but that he always supported competition. Let's highlight some parts of the hearing.

Q: Did you have any discussions with any Real Network representative about what kind of products they should or shouldn't be delivering?

Bill Gates: (After a long silence) No.

Q: It is a program that is usually used for accounting or inventory management.

Bill Gates: I think the definition is vague.

Question: Isn't it just as much as it has been defined?

Bill Gates: To be fair, I think it's still unclear.

Bill Gates in court;

That's how Bill Gates tried to be as tactful as possible in his answer during the court hearing so that the jury board wouldn't easily understand anything. He knew that by helping Apple, he had literally saved Microsoft. By helping Apple, Microsoft was trying to make it clear that they were not an exclusive company. Three years later, the court acquitted Microsoft.

Mystery of non-voting shares

As mentioned earlier, Microsoft bought Apple's 150 million non-voting shares at market price. With his release from the lawsuit, Bill Gates converted his non-voting shares into ordinary shares. In all, Bill Gates acquired 18.2 million shares of Apple stock, which he sold in 2003. Even when Bill Gates sold the shares, Apple's share price was much lower.

Apple's share price in 2003;

Since then, Apple's share price has risen 2: 1 in 2005 and 7: 1 in 2014. By 2019, the value of each share of Apple will increase to 227 dollars, as well as the value of the shares sold by Bill Gates will increase to 57 billion dollars!

Although Bill Gates helped Apple achieve its business goals, his initiative is to be applauded. Otherwise, this trillion dollar company called Apple might have gone bankrupt.

Thanks to everyone for reading this article


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