Although originally just a user-interface, or "shell," sitting on top of MS-DOS, Windows took on more operating-system functionality over time. In 1995, Microsoft introduced a software package called Windows 95, which announced itself as the first operating system for Intel-compatible PCs that exhibited the same sort of integrated features as the Mac OS running PCs manufactured by Apple Computer, Inc. Windows 95 enjoyed unprecedented popularity with consumers, and in June 1998, Microsoft released its successor, Windows 98. Microsoft is the leading supplier of operating systems for PCs.
Second, Microsoft's dominant market share is protected by a high barrier to entry. Middleware technologies, as previously noted, have the potential to weaken the applications barrier to entry.Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows. Microsoft was apprehensive that the APIs exposed by middleware technologies would attract so much developer interest, and would become so numerous and varied, that there would arise a substantial and growing number of full-featured applications that relied largely, or even wholly, on middleware APIs.The operating system supports the functions of applications by exposing interfaces, called "application programming interfaces," or "APIs." These are synapses at which the developer of an application can connect to invoke pre-fabricated blocks of code in the operating system.These blocks of code in turn perform crucial tasks, such as displaying text on the computer screen.Web clients and servers transfer data using a standard known as the Hypertext Transfer Protocol ("HTTP").
A "Web browser" is a type of Web client that enables a user to select, retrieve, and perceive resources on the Web.
When the International Business Machines Corporation ("IBM") selected MS-DOS for pre-installation on its first generation of PCs, Microsoft's product became the predominant operating system sold for Intel-compatible PCs. In 1985, Microsoft began shipping a software package called Windows.
The product included a graphical user interface, which enabled users to perform tasks by selecting icons and words on the screen using a mouse.
It follows that, if one firm controlled the licensing of all Intel-compatible PC operating systems world-wide, it could set the price of a license substantially above that which would be charged in a competitive market and leave the price there for a significant period of time without losing so many customers as to make the action unprofitable. Microsoft enjoys so much power in the market for Intel-compatible PC operating systems that if it wished to exercise this power solely in terms of price, it could charge a price for Windows substantially above that which could be charged in a competitive market.
Therefore, in determining the level of Microsoft's market power, the relevant market is the licensing of all Intel-compatible PC operating systems world-wide. Moreover, it could do so for a significant period of time without losing an unacceptable amount of business to competitors.
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