Microsoft and Apple’s “Battle of Kings”: Over 40 Years of Love and Fight, Meeting at the Peak of $3 Trillion

"You lied to us. I trusted you so much, but you stole our Apple stuff!" One day in November 1983, two young people confronted each other in a conference room. One young man roared, and the other young man responded calmly: "Well, Steve, I think the situation is closer to this - we both have a rich neighbor named Xerox. One day, I broke into his house to steal the TV, but found that you had already stolen it."

If you already know this history, you should know that the young man who said these words is Microsoft founder Bill Gates, and the angry young man opposite is Apple founder Steve Jobs.

(Leaving Apple) Jobs and Gates, photo/David Graham

In Jobs' view, the Windows that Microsoft is developing is the product of "stealing" Apple's (Classic) MacOS graphical user interface (GUI). But in Gates' view, both (Classic) MacOS and Windows "stole" the graphical user interface from Xerox Research Center (PARC).

However, including the two "thieves" - Jobs and Gates, probably no one could have imagined at the time that 40 years later, Apple and Microsoft would continue to lead the technological revolution and both break through the record of a market value of US$3 trillion.

At the end of this month, just after Apple, Microsoft's market value exceeded US$3 trillion for the first time, becoming the second technology company in the world to join the "US$3 trillion club". Subsequently, the two companies conducted multiple rounds of competition around "US$3 trillion."

As of the close of trading on January 26, Apple has fallen below US$3 trillion, while Microsoft continues to remain at US$3 trillion.

Apple loses “$3 trillion”, picture/Google search

In fact, since the beginning of 2024, Microsoft's market value has been rising all the way by virtue of its leadership in the field of artificial intelligence, and has surpassed Apple many times. Before that, Apple had been firmly ranked first in the world's highest market value.

This also reminds people of the nearly 50-year "grievance and hatred" between Microsoft and Apple that spans multiple technological revolutions in personal computers, smartphones, and generative AI.

Booting Up: The Personal Computer Era

AppleI, photo/EdUthman

In April 1976, Steve Jobs and Steve Wozniak founded Apple and demonstrated a game-changing product, the Apple I, at the Homebrew Computer Club, marking a major shift in computers from laboratories and professional fields to ordinary consumer homes, and thus ushered in the era of personal computers.

Just one year before Apple was founded, Bill Gates and Paul Allen also founded Microsoft. It started by selling BASIC interpreters and gradually turned to operating system development. In 1980, it developed the MS-DOS system for the IBM PC, thus establishing its dominant position in the operating system market.

Around 1984, although the cooperative relationship between Apple and Microsoft had "broken", it once again "accelerated" the trend of the personal computer era from different angles.

In 1984, Apple released its first Macintosh personal computer, the Macintosh 128K, which was equipped with a graphical user interface, screen, mouse and keyboard for the first time, establishing the product paradigm of personal computers in one fell swoop. Coincidentally, it happened to be the 40th birthday of the Mac computer a few days ago. Lei Technology announced in "Mac, 40!" "The article reviews the development history of Mac. Microsoft officially launched the retail version of the Windows operating system a year later, truly leading countless people into the era of personal computing.

These two events not only defined the early development trajectories of Apple and Microsoft - the former focused on hardware innovation and user experience, and the latter focused on the popularization of software and standardization of operating systems, but also foreshadowed the competition and cooperation between the two companies in the personal computer era.

Divide: Software eats hardware

Initially, software was considered an appendage of hardware, but soon, people began to realize that software was closer to consumers than hardware.

Entering the 1990s, the computer industry ushered in another key change. Windows 3.0, released in 1990, greatly improved the appearance design, and combined with a series of technical improvements, it became Microsoft's first operating system to achieve widespread commercial success, with more than two million copies sold within six months of its first release.

Immediately afterwards, Microsoft officially launched a major version update after Windows in 1995, which may also be the most critical update in the history of computer operating systems-Windows95. Perhaps the best evaluation of Windows 95 was what CNET said later:

"When Windows 95 finally hit the market in 2001, it was firmly entrenched on computers around the world."

While Microsoft is accelerating the global popularity of personal computers and then dominating the computer market, Apple is still going through a difficult period, and its founder Steve Jobs has been "kicked out." At that time, Apple was facing a financial crisis, its market share was declining, and its innovation capabilities were questioned.

Apple's Mac computers, while maintaining some market share in graphic design and education, have been unable to compete with Windows-based PCs in the broader PC market. The high prices of Apple products and the relatively closed ecosystem have led to limited appeal in the market. Apple has had to reorganize and adjust its strategy in order to survive and develop.

So, after various attempts failed, Apple chose to invite one person, a person who had created Apple's glorious history-Jobs.

Turning Point: Antitrust and Return

In 1997, through the acquisition of NeXT Computer Company, Apple once again returned to the leadership of founder Steve Jobs. After Jobs returned, he quickly ended the patent litigation with his "old enemy" Microsoft, and even chose to pre-install the IE browser on the Mac in exchange for Gates' financial support.

At that time, Microsoft had grown into a "fearful" company, monopolizing more than 90% of the computer operating system market. Yahoo founder Jerry Yang publicly said, "You never, ever want to compete with Microsoft. If they want to compete with you, you have to run away and do something else."

But just one year after Jobs returned to Apple, in May 1998, the U.S. Department of Justice and 20 states jointly launched an antitrust lawsuit against Microsoft. One of the core issues was that Microsoft had monopolized the browser market by bundling and installing the IE browser. After more than two years of tug-of-war, the court once ruled to break up Microsoft, but the result was eventually overturned by the appeals court.

It was not until later that Google proved that the search engine is the first entrance to the Internet and that the browser is not so crucial. Then there was Paul Graham's article "Microsoft is Dead".