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No word on whether or not the deal was taken at this time

Sources: Bloomberg, Wall Street Journal, Microsoft

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RE: Meh
By retrospooty on 2/5/2013 12:29:08 PM , Rating: 5
LOL... To be clear he wasn't far off. If not for the cash bailout from MS, Apple would have had to close the doors in the 90's. And if it were just the Mac platform, it wouldn't have gone far anyhow. Apple's fortunes are iPod, iPhone and iPad related. The Mac line didn't make its "meteoric" rise from 4% to 7% marketshare until the "i" devices became popular.

RE: Meh
By TakinYourPoints on 2/6/2013 4:48:27 AM , Rating: 2
History time!

The cash bailout wasn't the important part of their deal, application support, cross-licensing technologies, and settling charges out of court was.

Even in their beleaguered state in 1997, Apple was worth about $3BN in market cap and had about $1.5BN in cash. They were losing money but they'd gotten back in the black the same year by axing most of their products (printers, PDAs, etc) and reducing their computer line from dozens of product lines to only four (desktop/laptop consumer/pro).

The cash investment of $150 million dollars, which is nothing compared to their market cap and liquid assets, were restricted non-voting shares created by diluting existing stock (slightly reducing stock value for existing shareholders in the process).

It was basically funny money created out of thin air.

The deal was important but not in terms of the "investment".

Apple dropped charges against MS (important as MS was under heavy fire from the DOJ at the time) regarding the UI and stealing code from Quicktime. They did this in exchange for continued development of Internet Explorer and Office, which is actually the most important thing Microsoft did for Apple as it instilled confidence in a platform that was on thin ice.

Also important was a cross-licensing relationship that continues to this day. Microsoft licensing Apple's technologies for Windows Phone is the latest example, while Apple is one of the biggest, if not the biggest, licensees of ActiveSync.

So why do the investment in the first place if it was meaningless funny money? Simple: It was done for marketing and saving face.

Jobs is a showman, everyone knows that, and saying that Microsoft was bailing out Apple was a very flashy way to make Apple look like they were being saved, even though they were already well on the way to profitability, and it made Microsoft look like the heroes (continued Office and IE support sounds WAY boring in comparison even though it did way more to help the platform).

So yeah, it was marketing, and apparently it is so effective that people who don't know their history still refer to it. :)

RE: Meh
By TakinYourPoints on 2/6/2013 8:24:14 PM , Rating: 2
And to be perfectly clear, if you believe that a .035% stake created out of thin air constitutes a "bailout", then you have some serious reevaluation to do.

Microsoft has a full 8% investment in Dell, and the last thing anybody would call it is a bailout.

RE: Meh
By TakinYourPoints on 2/6/2013 4:51:39 AM , Rating: 1
As for the iPod, it did make mainstream consumers more aware of Macs; up until the mid-2000s it was primarily the platform of professionals.

If we're talking about income the iPod never came anywhere close to what the Mac generated. The Mac didn't even get surpassed by the iPhone for revenue until 2010, but everything else got superseded by it in the following years. The iPhone by itself makes more money than the higher margin Windows and Office products combined, so its obviously an extreme (and insane) outlier.

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