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Opinion: Apple owes Microsoft $30bn

Yes, that's right. Apple owes Microsoft for its success -- big time. Join us as we run you through the argument

Without Microsoft, Apple would be worth a fraction of what it is today. We aren't suggesting Steve Jobs should hand over the keys to a dumper truck full of cash -- we're merely stating that without Microsoft, Apple wouldn't be the enormously cash-rich, debt-free company it's become. Before you have us committed to a brightly lit institution with industrial-strength upholstery, consider this argument...

We think it's reasonable to say that Apple can chalk the majority of its recent success to two products, namely the iPod, and more recently the iPhone. Its computer business has become more successful in recent years, but it's been massively boosted by the newfound recognition it has receiving as a result of its portable devices -- the so-called 'halo effect' -- since the launch of the iPod. You're almost certainly still in agreement with us at this point.

But the iPod didn't take off straight away. One event was crucial to the success of that device: Apple opening it up to Windows. Steve Jobs is often rumoured to have outright refused to make iTunes and the iPod available for Microsoft-based systems. This is evidenced by the use of FireWire, which was on every Mac at the time, but on very few Windows PCs. Jobs also initially refused to create a Windows version of iTunes.

Then in 2002, Apple added support for Windows via some third-party software -- MusicMatch Jukebox -- and in 2003, ported iTunes to Windows. iPod sales really started to take off in 2004 and exploded in 2005.

The iPod is such a big a success only because of its compatibility with Windows. Up until September 2009, Apple had sold 220 million iPods. If we generously say that Macintosh use is 7 per cent globally -- it's something like 10 per cent in the US, and 5 per cent or less in the rest of the world -- then of those iPods, around 15 million of them would have run on a Mac. Fifteen million iPods is not enough to fill Apple's coffers to their current level.

And what's true for the iPod is also true of the iPhone. Can you imagine it being so popular with people if they also had to purchase a Mac to go with it? 

Then there's Internet Explorer and Office for the Mac. Now just where would Apple be without those little objects of joy?