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A Microsoft-Friendlier Macworld

Remember when the hottest question in computerdom was Mac vs. PC? That great debate has lost its luster in recent years, as Apple's share of the computer market has slipped to a paltry 3%. But don't tell that to the folks at the annual Macworld conference in San Francisco. To the adoring Mac-o-lytes who come to hear Apple CEO Steven Jobs's feel-good keynote speeches each year, the Redmond software giant is still the Evil Empire.

Old hatreds may die hard, but they're certainly diminishing. Unlike past keynotes, there's no longer the knee-jerk booing or catcalls whenever the name of Microsoft (MSFT) is mentioned. One gets the feeling that's partly the reaction to finger-wagging admonishments from Jobs, who has preached co-existence in recent years, when such unruliness broke out.

When Jobs splashed a photo of a gangly Bill Gates from a 1984 brochure for the just-announced Mac during his Jan. 5 keynote, hearty chuckles were heard. The crowd even listened politely as a very nervous Microsoft exec stammered through a demo of Microsoft's latest version of Office for the Mac.

"A REAL WARMTH." And what about Jobs's own feelings for Gates? They've mellowed as well. He talked to the Microsoft honcho last summer, he says, but they're both too busy with kids to stay in touch more often. When Apple (AAPL) unveiled a version of its iTunes music player to work with Windows last fall, Jobs sent Gates a $200 gift certificate to try it out.

"I'd set him up with a monthly allowance, but he doesn't need it," Jobs joked in an interview with BusinessWeek at the time. He never heard back from Gates, but there's no hard feelings. "It's actually really pleasant when we chat. We both spent the majority of our lives in this industry, and we've spent more time in it than we have left on the planet," Jobs told BusinessWeek Online after his Macworld keynote. "We obviously disagree on things sometimes. But I actually feel a real warmth towards him personally."

That's not to say Jobs is above taking digs at his long-time nemesis. In the same interview, he argued that Apple's Macintosh operating system software has reopened a big lead over Windows in terms of innovation. "Apple is once again two to three years ahead. Microsoft is copying us again, and it's fun!" he said. "I often used to tell Bill that we were the cheapest R&D they could get ever get."

INNOVATION EDGE. As for Microsoft's upcoming Windows makeover, called Longhorn, Jobs says it'll only catch up to Mac OS X, which is now four years old. While most analysts figure Longhorn won't hit the market until 2006, Jobs thinks it could be 2007. "Their biggest challenge is just to get it out. Things have been known to slip."

If he's right, then Microsoft will be six or seven years behind Apple. "That's an improvement on the 10 years it took them to copy the original Mac, but it's still a lot," Jobs says. The catcalls may be disappearing, but there's still room for a gentle dig. By Peter Burrows

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