English Lesson
Apple Partners with Microsoft
[The start of Apple's 1997 turnaround]
Getting Started
Name two business competitors you think would never collaborate. Think of a situation where collaboration in such a situation might be a good thing.

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When Steve Jobs returned to Apple in 1997, the company was in serious financial trouble, with declining sales and increasing competition. One of his first major moves was forming a strategic partnership with Microsoft, which played a crucial role in stabilizing Apple and rebuilding its credibility.

The Apple-Microsoft Partnership (1997)

At the Macworld Expo in August 1997, Jobs shocked the tech world by announcing a partnership with Microsoft. The two companies had been fierce rivals for years, with Apple accusing Microsoft of copying its graphical user interface (GUI) for Windows. However, Jobs saw this partnership as necessary for Apple’s survival.

The key elements of the deal included:

  1. A $150 Million Investment – Microsoft purchased $150 million in non-voting Apple stock, giving Apple much-needed financial stability. 

  2. Microsoft Office for Mac – Microsoft agreed to continue developing Microsoft Office for Mac, ensuring that business users and students could keep using Apple computers.
  3. Internet Explorer as the Default Browser – Apple agreed to make Internet Explorer the default web browser on Macintosh computers, helping Microsoft expand its browser market share.
  4. Patent Cross-Licensing – Both companies agreed to drop lawsuits against each other and share certain technologies, reducing legal disputes.
Why Did This Partnership Matter?

At the time, Apple was seen as struggling, while Microsoft dominated the tech industry. By partnering with its biggest competitor, Apple regained credibility and stability. The deal reassured customers, developers, and investors that Apple had a future.

While some Apple fans disliked the idea of working with Microsoft, Jobs framed it as a practical business decision rather than a defeat. He famously said:

"We have to let go of this notion that for Apple to win, Microsoft has to lose."

The Outcome

The partnership helped Apple survive and paved the way for its future success. The funds gave Apple time to refocus on innovation, leading to the development of the iMac, iPod, iPhone, and iPad.

Microsoft, in return, benefited by keeping its Office suite on the Mac platform and avoiding a prolonged legal battle.

Ultimately, the deal was a short-term lifeline for Apple, but Jobs’ leadership and future innovations made Apple an industry leader once again.

Comprehension Questions
1. What was the financial situation of Apple when Steve Jobs returned in 1997? When Steve Jobs returned to Apple in 1997, the company was in serious financial trouble, with declining sales and increasing competition.
2. What was one of Steve Jobs’ first major moves upon returning to Apple? One of his first major moves was forming a strategic partnership with Microsoft, which played a crucial role in stabilizing Apple and rebuilding its credibility.
3. What was a key financial component of the Apple-Microsoft partnership announced in 1997? A $150 Million Investment – Microsoft purchased $150 million in non-voting Apple stock, giving Apple much-needed financial stability.
4. How did the partnership ensure that business users and students could continue using Apple computers? Microsoft Office for Mac – Microsoft agreed to continue developing Microsoft Office for Mac, ensuring that business users and students could keep using Apple computers.
5. What was one of the concessions Apple made in the partnership regarding its web browser? Internet Explorer as the Default Browser – Apple agreed to make Internet Explorer the default web browser on Macintosh computers, helping Microsoft expand its browser market share.
6. How did Steve Jobs justify the partnership with Microsoft to Apple’s supporters? We have to let go of this notion that for Apple to win, Microsoft has to lose.
7. What was the long-term impact of the partnership on Apple’s product development? The partnership helped Apple survive and paved the way for its future success. The funds gave Apple time to refocus on innovation, leading to the development of the iMac, iPod, iPhone, and iPad.
Discussion

Why do you think Steve Jobs decided to work with Microsoft, even though they were rivals? Use examples from the article to support your answer.