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Apple and Compaq were threatened, insists Tevanian

Threat to Office was "strongest bargaining point"

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Yet more evidence came to light yesterday that Microsoft had blackmailed Apple into a deal against its will. Ben Waldman, a head of Microsoft's Mac development, emailed Bill Gates on 27 June 1997, because he was unhappy at the speed of negotiations, saying that "the threat to cancel Mac Office 97 is certainly the strongest bargaining point we have . . . I also believe Apple is taking the threat very seriously." Microsoft still denies it threatened Apple, of course. Waldman also told Gates that "pulling out [Mac Office] at this point would be a blight on our integrity" since Microsoft had promised the product to users. The consequence was that Gates called Gil Amelio, former Apple CEO, four days later on 1 July, and it is clear from Amelio's letter to "Mr William Gates" dated 3 July that Amelio was grovelling about Gates' desire to have IE as the default browser on the Mac. "I know [not having IE as the only/preferred browser] is a source of great irritation to you," Amelio wrote. In an attempt at pacification, he attached to his letter an "image of CD files - Netscape is not even visible". What he was trying to say was that Netscape was not in first level of the CD-ROM directory. Amelio was unlikely "to put behind us once an for all the animosity that has existed for so long between our companies" with this effort. Amelio does refer to the desirability of patent cross-licensing, and it looks as though the problem of the stolen QuickTime code was cleared up earlier. If so, the terms have still not been disclosed. Then guess what happened two days later? Board member Edgar Woolard called Amelio and suggested he resign. Could there perhaps be some connection? Just a month later, IE was the default browser. The rebuttal examination was by Philip Malone, the DoJ attorney effectively in charge of the case, and based in San Francisco. Steven Decker of Compaq, who had claimed in a videotaped deposition shown on Friday that Compaq would be using QuickTime if Apple were not charging for it, was not telling the truth, Avadis Tevanian, Apple's VP for software, told the court yesterday, saying Decker's account was "not accurate. We offered it for free. The DoJ showed a video of Apple exec Phil Schiller telling the real story: that Compaq decided not to use QuickTime because it feared there would be repercussions from Microsoft. David Obelcz, a Compaq engineer, emailed Schiller: "You have to understand what's going on here. They are very afraid of doing anything to upset Microsoft. We are very wary of bundling anything that would upset Microsoft because they touch us in so many places". Decker didn't tell the whole story: there were two versions of QuickTime on offer: a free basic version, and a professional version for which there would be royalty payments. Of course, it might had been wiser of Apple to have offered Compaq just the free version, and charged for professional upgrades later. Tevanian was asked by Malone if Apple would have used IE as its default browser if it weren't for Microsoft's threat to discontinue the Microsoft Office for Mac development. "No," said Tevanian. Microsoft's claim that Apple's programming errors caused the problems are not sustainable (Microsoft fixes QuickTime), and introduce another area of Microsoft's anticompetitive business practices: undocumented areas that are essential for linking applications. Microsoft can choose to whom it divulges this information. There was some feeling amongst financial analysts that Apple was taking a bit of a chance sticking its head so far above the parapet, but perhaps it has some new confidence because of those iMac sales, and a feeling that Microsoft cannot win this case. Maybe there's life beyond Microsoft's Mac Office. Perhaps new users will be won over to Apple if Microsoft's image suffers sufficiently to convince consumers to look at alternatives. ® Complete Register trial coverage Click for more stories

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