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Microsoft and Apple find synergy

Microsoft is more aggressively supporting the Apple platform, and, ironically, some Apple developers are more aggressively supporting Windows.

Microsoft (MSFT) is more aggressively supporting the Apple (AAPL) platform, and, ironically, some Apple developers are more aggressively supporting Windows.

Following a survival instinct, developers of Apple products have been expanding their product lines to encompass the Windows platform and offset any deterioration of Macintosh sales. Analysts say that those developers have been shifting resources to Windows because it is the most widely used computer platform. The recent collaboration between the two longtime rivals may alleviate the need to take sides, and may provide an opening for the companies to develop and promote "the other team."

Analysts say, however, that the seemingly cooperative efforts of the two companies are based solely on self-preservation, pointing out that, in the business of selling software, they have no time to be loyal to one side or the other.

Companies that are making products for the Mac need to consider where their future revenue is going to come from, said Lou Gutentag, an analyst at JP Morgan. "Companies see Apple's sagging results," and that is enough to look around to see what is selling--Windows."

Gutentag added that the functionality of Windows is on its way to being on a par with that of the Macintosh.

"Instead of being superior, it is equal. The decision to have one or the other is more a matter of taste," he said, noting that consumer realization of this fact has caused companies to shift more resources to Windows development.

Avid Technology (AVID) is one company that once developed products solely for Apple, but has expanded its offerings to incorporate SGI (SGI), Windows, and NT. The company said the expansion resulted from stepped-up customer demand.

"The Mac is a great general-purpose environment for media editing, [but we see a lot of opportunities] with Intel and Windows because of their big market shares," said Cliff Jenks, Avid's executive vice president for editing and effects-development. "We have pursued development there to expand our reach into the corporate and consumer environments."

In its most recent quarterly filing with the Securities and Exchange Commission, Avid said it will be necessary to develop additional products that operate using Intel Architecture (IA)-based computers and the Windows NT operating system.

"The company's products operate primarily on Apple computers?. There can be no assurance that customers will not defer purchases of existing Apple-based products in anticipation of the release of IA-based, NT-based products," the filing stated. It also acknowledged that Apple recently has been suffering business and financial difficulties, which may impact consumer and business purchasing and, in turn, impact Avid's business.

Jenks downplayed the filing, however, saying that it simply laid out any possible shareholder concerns that might emerge.

"It is not a secret that Apple was going through transitions," he said, "but we never had a particular concern over its viability as a manufacturer."

He said also that the expansion into other platforms is geared more toward broadening Avid's offerings to its customers, rather than responding to a potential slowdown in business.

"Our Apple business has never been stronger," he said, declining to comment on how much revenue the company developed from Apple products and how that revenue stream has changed during the past year.

Avid produced a 100-percent Apple product line up until 1995, when it acquired a special effects business that supported the SGI platform. In a move driven by acquisitions, the company last year introduced NT and Windows products as well.

Macromedia (MACR) has delivered both Mac and Windows versions of its products since the late 80s, but is has seen its revenue shift to lean more heavily on sales of Windows products.

For the nine-month period ending in December 1997, Macromedia's Mac revenue dropped 30 percent. During the same time period, its sales of Window products grew 10 percent. In the December quarter, 58 percent of the company's revenue came from Microsoft-related products, compared with just a year ago, when 60 percent of its revenue came from Apple-related products.

"We will probably continue to see a shift," but it doesn't matter how much of the revenue comes from the Mac and how much comes from Windows, said Norm Meyrowitz, chief technical officer at Macromedia.

He said it doesn't take much effort for the company to offer versions on both platforms because, "All of our programmers are ambidextrous, and it doesn't take much more time to develop the products for both platforms."

He said the company is poised to benefit from Apple's areas of focus, because most of Macromedia's products are targeted to creative professionals, Web development, and multimedia.