Commentary

Mac (Or IPhone) Eclipses PC As Usual

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Mac tops PC, again. True to their human avatars in the long-running Apple campaign, Apple this week casually bested Microsoft to become the world's most valuable tech company, at least judged by the size of its market cap.

You can almost hear Mac humbly downplaying the achievement, telling PC it really doesn't mean anything at all, and flummoxed PC vowing to regain its title as the world's tech heavyweight champion. That's not far from the reaction the real-life PC -- Microsoft CEO Steve Ballmer -- had to the usurping of its Wall Street throne by Apple, saying at a press conference Thursday, "We are executing very well, that's going to lead to great products and great success."

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His assurances were belied by the management shake-up in Microsoft's entertainment and devices division Wednesday, with Ballmer taking over leadership of the unit and two of the division's longtime executives retiring. Clearly, the CEO wants to take a more hands-on role in shaping Microsoft's push into the consumer entertainment market where it's been so thoroughly overshadowed by Apple.

The company is counting on the launch of its new Windows Phone 7 operating system later this year, new products like its Kin phones aimed at teens, along with its xBox game system, Zune music player and presumably as-yet-unseen products to collectively recast its corporate image as an enterprise software behemoth clueless about consumer technology.

Microsoft investors have to hope the company's entertainment-driven makeover turns out better than one of PC's desperate, ill-conceived schemes to outshine Mac.

But Mac can't simply enjoy its moment of triumph with smug satisfaction. The same week Microsoft lost its stock market perch and reorganized its entertainment group, The New York Times reported that the Justice Department was investigating Apple's practices in the digital music business, where iTunes has a dominant role. The probe is said to be focused on whether Apple tried to leverage its position to convince record labels not to give rival Amazon exclusive access to pre-release music.

Separately, the Justice Department and the Federal Trade Commission are reportedly looking into new rules Apple imposed on developers that bar them from using non-company-approved software tools, like Flash, in building applications for the iPhone platform.

With its powerful ecosystem built around iTunes and the iPhone/iPod, and now the iPad, Apple is starting to come under the same kind of regulatory and antitrust scrutiny Microsoft attracted in the 1990s.

The government, of course, hasn't sued Apple yet, as it did Microsoft for monopolistic practices in relation to its Windows OS -- but the company's growing role as a power broker in digital entertainment has certainly caught the attention of federal regulators. Now maybe PC can enjoy a small measure of smug satisfaction at Apple's expense, for once.

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