The attraction of the Macintosh has always been that it is easier to use than a PC running either Windows or the older Dos operating system. That factor has won Apple a loyal following, and a 10 per cent share of the personal computer market that puts it in the same league as IBM or Compaq.
Windows 95 threatens to change all that. It is easier to use than previous versions of Windows, and many of its features areinspired by the Macintosh. Without its traditional "ease of use" advantage, some in the industry believe that Apple is doomed. The market research company Dataquest recently published a report claiming that Apple's market share would be cut in half by 1999.
That report has been disputed, though, by other analysts as well as Apple itself. Apple's corporate response is that Windows 95 is "a nice improvement", but it argues that the similarities between Windows 95 and the Macintosh will work in Apple's favour. "In the past, we've been viewed as being outside the mainstream of the computer industry," says Nick Graves of Apple UK. "But Windows 95 endorses what we've done with the Macintosh." Graves argues that this "endorsement" improves Apple's credibility in the industry and could increase sales of the Macintosh.
However, the battle between Apple and Microsoft isn't just about technology. Marketing is just as important, and to combat the $100m hype behind Windows 95, Apple has been launching a raft of products. It recently switched its entire range over to a powerful new computer chip called the PowerPC, which matches the speed of top-of-the-range Pentium PCs. And, after years of jealously protecting its software secrets, Apple has decided to license its operating system to other manufacturers in the hope of spawning "Mac-compatibles" that will compete with the many brands of PC-compatibles.
This month, Apple is launching two new PowerPC Macintoshes that can accept a video signal from a camcorder or VCR. This technology has a range of uses. Home movie buffs can store and edit their home videos on their computer, while business users can link up with colleagues elsewhere to hold video conferences.
Apple believes that in future people will use video on their computers just as they now use text and graphics. But PCs can only handle video with the addition of expensive and complicated expansion kits, so this capability is intended to prove that the Macintosh is still more versatile than a PC.
So far, it looks as if Apple has got it right. Sales of the new Macintoshes are "off the chart", according to an Apple spokesman in the US, and Apple expects to reach $10bn in sales for the first time this year.
In the longer term, Apple is working on a new operating system of its own, codenamed Copland, which is scheduled for release in mid-1996. Copland will be as important for Apple as Windows 95 is for Microsoft. It will allow all sorts of people, from children to corporate IT managers, to customise their Macintosh so that it meets their individual needs.
Even more radical is a new software standard called OpenDoc, which Apple is developing in conjunction with IBM and several of Microsoft's rivals in the software industry. OpenDoc aims to replace big, expensive software packages such as Microsoft Office with smaller software "objects" that you can mix and match to create your own software library.
Recent demonstrations of OpenDoc have been impressive. However, the history of the computer industry is littered with good ideas that never got off the ground. It remains to be seen whether OpenDoc will have the impact that Apple is hoping for.
But even if OpenDoc doesn't succeed, Apple's research teams are working on plenty of other ideas that will appear over the next couple of years. Apple may never overthrow Microsoft, as its followers once hoped it would, but it isn't ready to be written off yet.