Apple offers a Windows core for Macs

After decades of treating Microsoft like the closest thing to Satan while at the same time relying on it to develop products for his computers, Apple chief executive Steve Jobs had a rather surprising gift for his die-hard fans on the 30th anniversary of the company's birth: the ability to run Windows on Apple hardware.

The product is called Boot Camp, and it not only allows Mac owners to run Microsoft's operating system on newer Macs that use Intel chips, it helps them install and configure it.

The move sent shockwaves through Apple's online fan-base, with some bemoaning the fact that the company was playing nice with Windows, and others saying it was an important first step in converting more Microsoft users to Apple buyers.

Investors seemed to be looking primarily on the bright side, pushing the company's share price up by almost 15 per cent after the news came out.

Several Wall Street analysts who follow the company boosted their outlooks, saying the move could make Apple's computers more attractive both to corporate customers and to high-end users of Windows, who may now decide to buy Macs.

Analyst Shaw Wu of American Technology Research said that Boot Camp was a "significant game changer" for the PC market. "A lot of people buy an extra machine just to have Windows, not because they want to run it, but because they don't have any choice," he said. "They say, 'I use Windows at home, and Windows at school - why should I go buy a Mac?' This gives them a reason."

Mac owners have been able to run Windows before, but only by using special software that tricked the Mac into working with the Microsoft software. There were suffered from compatibility problems and a lag in speed because of software emulation.

The release of Boot Camp was made possible by Apple's move last year to using Intel processors, which power most Windows machines. Apple did so because its Motorola-made processors were substantially slower than Intel chips. The company said the features in Boot Camp - which require users to buy a new copy of Windows XP - would be built into the next version of its operating system, code-named Leopard and expected to be released sometime later this year.

Deutsche Bank said in a research report that the move could increase the company's market share even faster than the so-called "halo effect" related to Apple's popular iPod music and video players, which have grown to the point where they now produce more than half of Apple's revenue. "We view this as positive for Apple, as it opens a new market to the company and greatly expands the addressable market," Deutsche Bank said. "This will be a particular benefit for business applications."

Piper Jaffray said that based on its expectations for Boot Camp, Apple would gain share in the PC market this year and - the gains could accelerate in future.

JP Morgan analyst Chris Shope estimated that each additional percentage point of PC market share would give Apple another US$2 billion ($3.3 billion) in revenue and US30c a share in profit.

Citigroup analyst Richard Gardner said the announcement was one of two steps the company could take to increase its market share, with the other being to introduce Macintosh systems at lower prices. "Boot Camp increases our confidence in Apple's ability to grow PC shipments 15 per cent to 16 per cent per year," he said.

Not everyone is enthused by the idea, however.

Several analysts said that rebooting a computer to switch to Windows or Apple's OS X would be a pain for regular users, and therefore would be something only high-end users or geeks would get much use from.

In addition, some analysts said they did not see that Boot Camp would make it that much more attractive for companies to buy Macs, especially since they would still have to buy copies of Windows XP at full price.

Crawford Del Prete, an analyst with industry research firm IDC, said he did not see the move as producing "a huge pop to [Apple's] market share. For a lot of corporate environments [the cost difference] is hard to justify, if it hasn't been justified already."

Roger Kay, president of market researcher Endpoint Technologies Associates, said "in the grand scheme of things, Boot Camp is like a speck of dust". When it gets right down to it, he said, "this will appeal to PC enthusiasts and hackers. I think it's really just 2000 or so people [who] will use this feature".

At least one Apple watcher, however, believes Boot Camp is only the first step in a move to interact even further with Microsoft's Windows operating system. Andrew Neff of Piper Jaffray says that - despite Apple's protests to the contrary - the company will eventually sell Macs with Windows installed. Boot Camp was yet another lowering of the barriers between Apple and Microsoft, and that had to be good for users.