Word: ibm
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Dates: during 1990-1999
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Offering stunning graphics and a stylish design, the Macintosh caught on well in the home and school markets, where Apple's machines now outsell IBM's by a two-to-one margin. Big Blue has always been frustrated in those markets. In the mid-'80s, IBM offered the PCjr, a stripped-down version of its best seller, but the machine flopped because it couldn't operate many of the heavy- duty software programs designed for the PC. Yet IBM has virtually locked Apple out of the office market, mainly because IBM's operating software has been adopted...
Lately, changes in industry taste have reduced the relevance of the IBM- Apple rivalry. Rather than choose sides, customers now insist that computers work together in networks, regardless of the make or model. That has harmed Apple, since its operating software is not the most compatible. But it has been no blessing for IBM either, because its operating system is so common that customers often prefer to buy clone machines that work like IBM's but cost less. Customers have become more concerned about price than brand names or even high performance. That has turned things upside down for IBM...
...neither IBM nor Apple has been able to halt customer defections. IBM's market share in PCs has dropped by half, to 23%, while Apple's has declined to 15%, from 18%. The changing marketplace has forced both companies to make some painful adjustments. In the largest layoff in the company's history, Apple will pare 1,500 jobs from its payroll this summer, a reduction of about 10%. The company is expected to post an earnings decline for the past quarter, largely because of price cutting. IBM, which during the January-March period reported the first quarterly loss...
Another problem that drove IBM and Apple into each other's arms is their growing friction with some powerful partners, most notably Microsoft, the suburban Seattle software giant run by wunderkind billionaire William Gates III. Microsoft was the creator of MS-DOS, the software that runs the IBM PC, but the two companies have had a falling out over the next generation, called OS/2, which runs IBM's line of PS/2 computers. Microsoft developed OS/2 as well, but IBM believes the software company has undermined sales of that software by pushing a highly successful program called Windows 3.0, which enables...
...alliance scorns another powerful company, Intel, which has supplied the microprocessors for IBM's machines and has commanded an almost monopoly position as a maker of IBM-compatible chips. Possibly to foster more competition, the new partnership says it will buy advanced processors from Illinois-based Motorola, whose chip business has been suffering lately because some of its big customers, including Unisys, have been in decline. IBM has been busy lining up other partnerships as well. Only a day after announcing its deal with Apple, IBM said it would join forces with Germany's Siemens A.G. to produce a powerful...