The infamous rivalry between Apple and Microsoft in the tech industry and business world. Today, we're going to explore how this relationship developed.

To understand the history of the Apple-Microsoft rivalry, let's go back to 1976 when Apple was founded. The Apple I was released in early April that year, and Steve Wozniak built it around the idea that it would run a custom version of Microsoft's BASIC operating system. When the Apple I system was phased out in September, development on the Apple II began.

Microsoft caught wind of the Apple II project and asked Apple if they wanted to license a more full-featured version of BASIC. Steve Jobs declined, as they were happy with their version of the operating system Wozniak wrote. However, when they showed off the Apple II at the West Coast Computer Faire in April 1977, they were overwhelmed with complaints about the lack of floating-point capabilities.

Floating-point numbers are essential for processing large amounts of data, but it became a significant problem for businesses using computers for accounting purposes. The issue was so critical that Apple ultimately licensed Microsoft's BASIC software for a flat rate of $31,000, or around $130,000 in today's money.

This license saved Microsoft from near bankruptcy and played a crucial role in the company's survival. The agreement also led to the creation of an operating system called AppleSoft BASIC. Meanwhile, the Apple II was a huge success, with over six million units sold during its 16-year run on the market.

When Steve Jobs approached Microsoft and asked them to write apps for the 1984 Macintosh, they jumped at the opportunity. Some of the first Microsoft productivity apps known as Office today were made with the Macintosh in mind. Word, Excel, and PowerPoint were all published in 1985 exclusively for Macintosh.

At the time, Apple and Microsoft were great partners, but their relationship took a turn when Bill Gates and Steve Jobs had a disagreement about the management of Apple. Bill Gates thought that licensing Apple's operating system to other hardware companies didn't make sense, while Steve Jobs believed it was unthinkable. The idea sparked a competition between the two companies.

Bill Gates went back to Washington and began developing Microsoft's own operating system with a graphical user interface called Windows. When Windows 1.0 hit the market in November 1985, it was met with mixed reviews. One of the most striking things about the Windows operating system was its curiously close resemblance to Apple's Macintosh System 1.

The similarities between Windows and the Macintosh were not just minor details; they went beyond recognition. The user interface, mouse and cursor interface, multiple windows for multitasking - all these features were identical or very similar. Journalists had high hopes that Windows would be a high-performance operating system, but it fell short of expectations.

One of the most criticized aspects of Windows 1.0 was its high system requirements, which meant users needed an expensive and powerful computer to run Windows properly. Despite this, Windows 1.0 served an important purpose in the long run, as it became the core building block for modern-day Windows.

Two years after Windows 1.0, Microsoft brought out Windows 2 in the winter of 1987. This was an incremental release that introduced advanced VGA graphics with 16 individual colors, keyboard shortcuts for professional users, and desktop icons for quick access to different parts of the operating system. Resizable and overlapping windows were also added.

When Steve Jobs saw Microsoft's Windows 2, he wasn't thrilled. He accused Gates of stealing Apple's user interface and style. However, Apple was in no position to take legal action against Microsoft, and Jobs advised his successor, John Scully, not to sue the company.

Scully went ahead with the lawsuit anyway, but it was thrown out in September 1994. The court ruled that the case had no merit, as the concept of "look and feel" wasn't something a company could copyright or patent.

"WEBVTTKind: captionsLanguage: enHey guys, it’s Greg with Apple Explainedand today we’re looking at one of the mostinfamous company rivalries in tech industry,and maybe even in all of business.And that is the rivalry between Apple andMicrosoft.Now this topic was the second place winnerof last weeks voting poll and if you didn’tget to vote, make sure you’re subscribed,that way the voting polls will show up rightin your activity feed and you can let me knowwhich video you’d like to see next.So in order to understand how the relationshipbetween Apple and Microsoft developed, wehave to travel back to 1976, the year Applewas founded.The Apple I was released in early April ofthat year and Steve Wozniak built it aroundthe idea that it would run a custom versionof Microsoft’s BASIC operating system.When the Apple I system was phased out inSeptember of that year and development onthe Apple II began, Microsoft caught windof it and asked Apple if they wanted to licensea more full featured version of BASIC.Steve Jobs declined, as they were happy withtheir version of the operating system Wozniakwrote.But when they showed off the Apple II at theWest Coast Computer Faire in April 1977, theywere overwhelmed with complaints since theiroperating system didn’t have floating-point,which basically means the machine didn’tunderstand numbers below −32,768 or anynumbers above 32,767.As trivial as this might sound for consumer-levelapps, it became a big problem as businessesbegan using computers for accounting and couldn’tuse the machines to process any sizable numbers.After Apple heard all these complaints, theyultimately licensed Microsoft’s BASIC softwarefor a flat rate of $31,000, or around $130,000in today’s money.This license, which ultimately created anoperating system called AppleSoft BASIC, actuallysaved Microsoft from near bankruptcy.Microsoft had previously licensed BASIC toCommodore for their PET system and ended uploosing a ton of money on the agreement.But the Apple II was a run away hit, withover six million units sold over its 16 yearrun on the market.Now when Steve Jobs approached Microsoft andasked them to write apps for the 1984 Macintosh,they jumped at the opportunity.Some of the first Microsoft productivity apps,known as Office today, were made with theMacintosh in mind.In fact, Word, Excel, and PowerPoint wereall published in 1985 exclusively for Macintosh.At the time, the two companies were greatpartners and actually helped support eachothers businesses, until Bill Gates and SteveJobs had a disagreement about the managementof Apple.Bill Gates was reviewing Apple’s businessplan and thought it didn’t make much sense,they weren’t planning on licensing theirsoftware to anyone.He brought it up to Steve, but the idea oflicensing Apple’s operating system to otherhardware companies was unthinkable for Jobs.So Bill, being the clever businessman he was,went back to Washington and began developmentof Microsoft’s own operating system witha graphical user interface, called Windows.Now when Windows 1.0 hit the market in November1985, it was met with mixed reviews.The most striking thing about the Windowsoperating system was its curiously close resemblanceto Apple’s Macintosh System 1.With clickable icons, mouse and cursor interface,and multiple windows for multitasking.Now Apple had licensed some bit and piecesof their own operating system for Microsoftto use, but the similarities went beyond minordetails.Some journalists had high hopes that Windowswould be a high performing operating system,but it fell short of expectations, which tendsto be the case with initial versions of software.And one of the most criticized aspects ofWindows was its high system requirements,which meant users needed an expensive, powerfulcomputer to run Windows properly.But despite all that, Windows 1.0 served animportant purpose in the long run, since itbecame the core building block on which modernday Windows is run.So two years after Windows 1.0, Microsoftbrought Windows 2 to market in the winterof 1987.This was an incremental release and introducedmore advanced VGA graphics with 16 individualcolors, keyboard shortcuts for pro users,and desktop icons for quick access to differentparts of the operating system, and resizableand overlapping windows, all of which werevery similar to the Macintosh operating system.So when Steve Jobs saw Microsoft’s Windows2, he wasn’t thrilled.He accused Gates of stealing Apple’s userinterface and style.But as much as he hated this, he knew Applewas in no position to take legal action againstMicrosoft.And shortly after the Macintosh was released,Jobs was replaced as CEO by then board memberJohn Scully.Now Jobs advised Scully not to sue Microsoft,or else they wouldn’t be as willing to developapps for the Mac anymore.And keep in mind that a huge selling pointof the Macintosh was its massive library ofsoftware.So Microsoft abandoning their hugely popularsuite of Mac apps would be platform suicide.Which was part of the reason why Jobs didn’twant Scully to go through with the lawsuit.But another reason was that the case wouldbe very difficult to win.The grounds of the suit were basically theftof the “look and feel” of the interface,which wasn’t really something a companycould copyright or patent.In spite of this, Scully went ahead and broughtMicrosoft to court in July 1994 and the casewas thrown out in September of the same year.The court ruled that \"Apple cannot get patent-likeprotection for the idea of a graphical userinterface, or the idea of a desktop metaphorunder copyright law.”Now I should also mention that in the middleof this whole ordeal, Xerox sued Apple forstealing the interface they were suing Microsoftfor from their Xerox Parc system, but thatcase was thrown out as well.Anyway, Bill Gates appeared to be right aboutlicensing an advanced operating system todifferent manufacturers.Because their licensing of Windows ended upgenerating a whole lot of profit for Microsoftand essentially established their operatingsystem as the standard, leading to a virtualmonopoly on the computer OS market.Because by 1990, Windows ran on 84% of computersworldwide, and increased to 90% in 1994.As Microsoft’s market dominance grew asthey released newer and more advanced versionsof Windows, the bitterness between Apple andMicrosoft grew even more palpable.It became so tense that during an interviewin 1995, Steve said Microsoft “ notaste” and that “they just make reallythird rate products”.But that attitude didn’t last long, becausewhen Steve Jobs returned to Apple in 1996he enlisted the help of Microsoft to returnthe company to profitability.Microsoft invested $150M in stock and paidanother $100M in compensation to Apple forvarious copyright infringements.When the deal was announced at Apple’s WorldwideDevelopers Conference in 1997, Steve was metwith a less than favorable reaction from theaudience when a video stream of Bill Gateswas projected on a 70 foot screen above thestage.Nowmany years later when Jobs looked back onthis event, he regretted allowing Bill’shead to loom over him on stage since it appearedMicrosoft was in a more dominate position.Now this substantial investment from Microsofthelped Apple produce some of the productsthat made them the company we know today.A year after Steve was boo’d, he went backon stage and announced the first iMac whichwas met with resounding approval by the mediaand customers alike.Three years later, Apple shipped the iPod,securing Apple’s reputation as a lifestylebrand as well as a tech company.Now around 2006 what we now know as WindowsVista was in public beta under the codename‘Longhorn’.And the similarities between Longhorn andMac OS X weren’t immediately obvious tocustomers until Apple began pointing themout during their keynotes.For example, OS 10 Tiger introduced a systemwide file search called Spotlight.Months later, a Windows beta included a searchbar in the start menu.And Internet Explorer 7 was a total redesignfrom the ground up in an attempt to competewith Safari but that never really worked.The same year, Microsoft released the ultimateiPod killer called the Zune, the only problemwas it never reached the same level of successas the iPod.And to give you an idea of why Microsoft evendecided to make the Zune, you have to rememberthat at the time, Apple had essentially totalmarket dominance in the portable music industry.Their steps in releasing iTunes for Windows,creating different versions of the iPod fordifferent markets, and changing the port fromFirewire to a USB powered 30 pin connectorall helped Apple cement their position asthe dominate music player brand.Now Microsoft recognized this and initiallytried to compete with iTunes by creating theMSN Music store in 2004.Within a year, the library of songs on MSNMusic actually decreased from 1.5M songs downto 1.1M due to awful sales numbers and Microsoftnot investing many resources into the service.Finally in 2006, Microsoft discontinued MSNMusic to release the new Zune music servicealong with the Zune 30 music player.To help create hype around their product,Microsoft ran some interesting TV ads andalso some pretty desperate marketing campaigns.For example, Microsoft hired 200 college studentsto be “Zune-masters” on their campuses.They would promote the music player and hostwhat were called Zune events.But unsurprisingly those efforts failed togenerate any meaningful level of excitementfor the device.Now the Zune 30 had a few features to makeit stand out from the iPod, including a largerdisplay, a built in FM radio, a navigationtouch pad some critics found easier to navigatewith, and the ability to share music filesbetween other Zune users within a 30 footradius over wifi.Over the course of six years, Microsoft wouldcontinue to upgrade the Zune and refiningits design, introducing a smaller versionwhich ran off flash storage to compete withthe Nano, and a fully touch screen versionto compete with the iPod touch but resembledmore of a 7th gen iPod nano in size.At its peak, the Zune only accounted for 9%of the music player market, coming in behindthe iPod’s 63%.And at the time the Zune was being phasedout, it was barely at 2% total marketshare.But Microsoft didn’t let the Zune dampentheir spirits.Because weeks after the release of Windows7 in October 2009, Microsoft opened theirfirst retail store in Scottsdale, Arizona.The design of the store was, as Cult of Macput it, “a carbon-copy remake of an AppleStore” down to the light stained hard woodfloors.The cash-wraps were designed down to a T toresemble the genius bar in Apple Stores.And the employees were even recruited fromApple Stores in the area.But it’s wasn’t a total copy, though.Since Microsoft invested $60,000 in touchscreen tables and likely thousands more inwide screen video displays for customers todemo certain products.Now in recent years, the blatant copying fromMicrosoft has subsided quite a bit.Sure, they released the Surface tablet whichwas compared to the iPad in Microsoft’sown ads, but there are quite a few iconicfeatures that separates it from any iPad releasedto date.Even more recently, Microsoft has begun shippingMicrosoft branded computers like the SurfaceBook and Surface Studio with a unique designlanguage of their own.So looking back, it’s easy to see why Microsoftand Apple had such a tumultuous relationship.Both have felt wronged by the other at somepoint, although most of their bitter feelingshave slowly faded away in recent years.So that is how Microsoft and Apple becamerivals, and if you want to vote for the nextvideo topic, don’t forget to subscribe.Thanks for watching, and I’ll see you nexttime.\n"