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Apple needed to graft in the look and feel of System 7 and add Mac software compatibility. Apple began working out a strategy for merging its own technologies with those acquired from NeXT in 1997. The first draft at using NeXT, called Rhapsody, expected Mac developers to quickly embrace and migrate to using NeXT's rapid development environment (referred to as "Yellow Box," and now called Cocoa). Applications that didn't get ported would run within a special environment (the "Blue Box") that ran the Classic Mac OS. But it turned out there was far more resistance from Mac developers to begin using the new OS' development system than Apple initially expected.
Mac developers, primarily larger companies with extensive and established code bases, refused to commit the resources necessary to rewrite their software for Rhapsody. First of all, it was a huge commitment. Second, Apple had been hovering on the brink of irrelevance for the last year or two. And third, Apple had just recently canned existing plans for the promised System 8. Prior to that, Apple had asked developers to embrace development strategies that either failed in the marketplace, like OpenDoc, or were collapsing under their own proprietary weight, like PowerTalk and QuickDraw GX. In fact Apple had a series of failed software development roadmaps that stretched through most of the last decade. While Apple had pulled off a remarkable transition from 68k to PowerPC, Apple had never pulled off any smooth, major migrations to a new operating system.
To pacify doubtful Mac developers, Rhapsody was sent back to the drawing board. Classic moved from being a fully independent environment on a separate screen to being a fully integrated system where old apps commingled with new native apps. And even better for existing developers, Apple cleaned up and ported modern versions of most of the old Mac OS' toolbox to run natively in the new operating system, an engineering effort that resulted in Carbon. Now existing apps could be migrated ("Carbonized") to the new system with less effort and still take advantage of new features in Mac OS X.
This compromise ensured that Mac software would continue to work for users, and that existing Mac developers would continue to support the new platform. It also destroyed any hope of Apple selling OS X for PCs. Porting Classic to a PC version of OS X would require a technology to run PowerPC code emulating 68k code on Intel chips, something that is still practically impossible half a decade later on the latest Intel processors. Selling NeXTSTEP for the PC would also require building in support for a vast array of hardware drivers, a monumental task.
Attempting to sell an unfinished Mac OS X for PCs would have diluted Apple's development and marketing efforts in getting OS X finished and sold to the existing Mac market, where they actually could make money selling hardware. Within the Mac ecosystem, Apple could, while still finishing OS X, sell Macs running Mac OS 8, and then sell Macs running Mac OS 9. This receptive audience had a library of Mac software, experience with Mac hardware, and a loyal desire to buy new products from Apple.
None of that existed in the greater PC industry; just cutthroat competition in hardware and a 2,000 pound software gorilla named Microsoft. There was no ready market for a PC version of Mac OS X lacking the ability to run Mac software. As well, Apple's enterprise team from NeXT already had experience with trying to sell a far superior operating system that competed with Windows on Intel PCs: abject failure.
Selling any portion of OS X for PCs simply made no business sense, and carried the prospect of excessive risk for Apple. Why sell an operating system to curious buyers with PCs, who would find that no software and few drivers are available, rather than incubate and nurture an existing, profitable software and hardware marketplace where a large library of available software already existed, developers were cautiously optimistic, and users were hungry for something new and ready to buy?
Part V > A Shock to the System
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