At a November virtual product launch for Apple’s Mac reboot, actor John Hodgman appeared in a nerdy, ill-fitting suit against a white background. “Stop it, wait, wait, one more thing, hi, I’m a PC,” he said, repeating the popular Mac vs. PC television commercial from a decade ago that didn’t telegraph the idea that Apple was cool and so subtle Microsoft doesn’t.
The event was held to let Mac fans know that the new machines are getting a processor with more sizzle. The caption, however, was unmistakable: Apple Inc.’s old rivalry with Microsoft Corp. was back.
The two companies had found reasons to work together for several years. Microsoft Office and other apps appeared on the iPad and iPhone. Apple even invited Microsoft to a product launch. Apple recently made it easier to use Xbox game controllers on Apple devices, while Microsoft made its products compatible with new Apple features like Apple Pencil and Magic Keyboard. Last fall, Apple even put its TV app on the Xbox.
Around the time the PC character reappeared, Microsoft started maligning Apple to regulators, saying the company’s app store was anti-competitive. The software giant from Redmond, Washington, had teamed up with Epic Games Inc., which Apple sued for booting its Fornite title from the App Store and accusing the iPhone maker of monopoly behavior. A Microsoft executive has since testified against Apple in the second week, telling the court that Apple’s strict control over its app store has adversely affected Microsoft’s own gaming efforts.
Tensions are unlikely to improve with a verdict as Apple and Microsoft are both looking to dominate the next big tech things – from artificial intelligence and cloud computing to games, tablets, custom processors, and mixed reality -Headsets.
The renewed dislike between Apple and Microsoft began about a year ago. Microsoft had developed a cloud gaming service for iPhones and iPads called xCloud. With an app, users can pay a monthly fee to Microsoft and stream dozens of different game titles from the cloud. The service should do for games what Netflix did for video, putting gamers at ease and turning Apple devices into a more powerful gaming platform backed by Xbox, one of the hottest names in the business.
However, Microsoft never launched the service as it was intended because Apple was not convinced to relax the App Store rules that ban all-in-one gaming services. Originally, Microsoft was prohibited from even starting cloud-based games. A few months after concerns about the streaming app ban became public, Apple tweaked the rules. Microsoft can now launch a cloud gaming service, but each game has to be downloaded separately, defeating the purpose of an all-in-one solution. Now Microsoft is rolling out the service on Apple devices over the internet, a much less than optimal experience than a real app.
Around the same time, Microsoft President Brad Smith called on US and European antitrust authorities to investigate Apple’s practices. “They are making demands that increasingly say that there is only one way to get onto our platform and that is through the gateway we created ourselves,” Smith told a Politico reporter. He added that he believed Apple’s behavior was worse than the actions that landed his company on the antitrust hot seat more than 20 years ago.
What might have remained a dissolvable dust instead escalated as the epic process began. Lori Wright, Microsoft vice president of business development at Xbox, testified that Microsoft is being deterred by Apple’s rules when playing games, and supported Epic’s claim that Apple was an antitrust violator. Apple returned, saying that Microsoft makes $ 600-700 million a year from its relationship with Epic and is simply defending the game maker because it’s good for business.
Lori Wright, vice president of Xbox business development at Microsoft Corp. Photographer: David Paul Morris / Bloomberg
Apple argued that Microsoft’s Xbox download store has rules similar to Apple’s. It cuts 30%, requires its own payment system and prohibits alternative digital marketplaces. Apple also said that Microsoft, as an iOS developer, will benefit if it is forced to revamp the App Store.
“We were clearly not in agreement with Apple’s refusal to allow streaming of games through the App Store,” said Microsoft spokesman Frank X. Shaw in an email. “However, this disagreement does not prevent us from working with Apple on other topics, as is the case with Microsoft 365 on iOS and Mac devices.”
Maybe, but there is potential for other clashes. In the booming PC market, where companies compete against each other, Mac sales doubled in the first quarter more than twice as fast as sales of PCs, most of which run on Microsoft’s Windows operating system, according to International Data Corporation. While Apple only holds 8% of the computer market, its upgrades are popular with the legions of Americans who are expected to continue working from home after the pandemic subsidies.
Apple also plans to release a mixed reality headset next year that will venture into the territory Microsoft staked out years ago with the Hololens. Microsoft has studied the development of chips for its line of devices, adopting an Apple strategy that has helped drive sales. The two companies are also competing for talent in AI and cloud infrastructure, two major future battlefields. Microsoft is even in the process of making its own phones again, and of course they’re using an operating system from another Apple rival: Google’s Android.
How bad could the animus get? If the past is a prologue, quite irritable. Apple co-founder Steve Jobs likened launching iTunes on Windows to handing a glass of ice water to someone in hell while Apple routinely poked fun at Microsoft software and accused the company of copying Apple’s designs.
Microsoft recently started running commercials for its Surface Hybrid tablet and laptops versus the iPad Pro and MacBook Pro. Hodgman, who plays PC in Apple Ads, might hear from his agent.