On Wednesday, September 11, Simon headed to San Francisco early in the morning. Meanwhile, Tinkerbell held a press conference at 9 a.m. to officially announce a $4 billion acquisition deal with Apple.
The news created a stir.
Apple's current struggles were well-known, having become a favorite target for criticism in the tech industry over the past two years. With Microsoft's Windows operating system solidifying its monopoly and the Wintel alliance growing stronger, few believed Apple, clinging to the PowerPC architecture and its outdated Macintosh system, could make a comeback.
To everyone's surprise, Tinkerbell, a rising star in recent years, suddenly made such a bold move.
As the press conference unfolded and news spread across various platforms, a wave of commentary quickly emerged online. Most reactions, whether professional or casual, were overwhelmingly negative, viewing Tinkerbell's acquisition as taking on a burden.
Despite Apple's market value dropping to $2.1 billion as of the previous day's close, it was still a 20-year-old American tech giant. Its annual revenue remained in the billions, spanning personal computers, servers, printers, tablets, digital cameras, and over a dozen product lines.
Even with iRec's recent success and the ongoing sales growth of iCam and iPlayer, which were poised to boost Tinkerbell's annual revenue by 60%, the company was still only projecting $20 billion in revenue for the year. The valuation disparity between the two companies was significant, but their revenue gap was just twofold.
This demonstrated the enduring strength of a legacy brand like Apple.
Industry analysts speculated that Tinkerbell's acquisition was likely an effort to rapidly expand its product lineup.
However, this was widely seen as a strategic misstep.
Apple's downfall stemmed not only from major failures in its core PC business but also from reckless expansion. While its diverse product offerings seemed innovative, many hastily launched ventures were unprofitable. As the core PC business declined, these peripheral product lines became liabilities, exacerbating Apple's struggles.
Some industry insiders, however, speculated that Tinkerbell—or rather, the Westeros System—had a deeper motive behind the acquisition: patents and a foothold in the PC industry. While Westeros was a major Microsoft shareholder, its tensions with the tech giant were no secret.
Thus, some analysts posited that Tinkerbell might partner with Egret to enter the PC market, aiming to avoid being constrained by Microsoft's dominance in internet-enabled devices. This analysis also sparked heated debate, though the prevailing sentiment remained skeptical due to Microsoft's overwhelming advantage in the operating system market.
The market's reactions were swift and dramatic.
By the time the news broke on the West Coast, it was already noon on the East Coast. By the close of trading at 4 p.m. Eastern, Apple's stock had surged 19%, raising its market cap to $2.53 billion—an increase of $400 million in a single day, just $300 million shy of Tinkerbell's $2.8 billion offer.
Conversely, Tinkerbell's stock dropped 2.7%, reducing its market cap to $272.3 billion. Although the percentage drop was small, the company's vast size meant a loss of $7.55 billion in market value—equivalent to nearly three Apples.
Meanwhile, Microsoft's stock was also affected due to media speculation about the acquisition's intent.
Microsoft's stock fell 2.5%, reducing its market cap to $269.7 billion. Microsoft shareholders collectively lost $6.9 billion in a single day.
The rivalry between Tinkerbell and Microsoft had been a hot topic recently, with their market caps seesawing as both neared the $300 billion milestone.
It was evident that the Westeros System had siphoned away much of Microsoft's momentum, making it unlikely the tech giant would ever again reach its original valuation peak of $600 billion.
While Simon's ultimate intentions remained unclear, Microsoft's "Gates" was visibly unsettled. After a West Coast lunch, as Simon left a restaurant with a group of C-girls, Gates called him.
Answering the phone without distancing himself from his companions, Simon said as he walked toward a conference room at Tinkerbell's headquarters: "Hi, Bill... Of course, why else would I acquire Apple? ... Yes, I remember I'm a Microsoft shareholder, but Bill, do you really think it's healthy for Microsoft to dominate the OS market completely? ... Let's not argue. You should understand that competition is the best catalyst for progress. So, instead of trying to stop others from competing, prepare to meet the challenge."
After Gates ended the call, Simon smiled and led his group into the conference room.
The meeting included several key members of Egret's Linux desktop OS development team. Once everyone was seated, Simon took control of the discussion, opening with: "You all know why we're here. Regarding Tinkerbell's PC development plans following the Apple acquisition, the new product line will be branded as the iMac series, one of many trademarks Tinkerbell has already registered. Let me make two things clear: first, the iMac series will run Egret's Linux desktop operating system. Second, these computers will abandon Apple's PowerPC architecture in favor of Intel processors."
The room buzzed with conversation.
Simon tapped the table to regain attention. Looking around, he stated firmly: "This is the final decision. You have seven months until Tinkerbell's spring product launch next Easter. I don't want to hear objections; this meeting is to discuss how to accomplish this goal."
"But, Mr. Westeros," interjected Peter Bakker, an Apple VP in charge of PC R&D, "seven months is simply impossible for integrating a new OS with a new processor architecture for a market-ready PC."
Simon looked at Bakker and shook his head. "Not seven months—five years and seven months. Egret has been developing Linux for five years, starting with an x86 architecture-based GUI desktop OS. There's already a prototype. If you're interested, you can see it tomorrow."
Bakker still shook his head. "Developing a prototype is one thing, but creating a market-ready PC is another. Software compatibility, for instance—have you considered that, Mr. Westeros?"
Simon smiled patiently. "Of course, Peter. For years, Egret has collaborated with SUN to develop the Java platform for Linux software. Java's advantages should be clear to you. When the iMac launches next year, major applications—especially Egret's internet-related software—will have Linux versions."
Hearing this, Bakker fell silent.
For a moment, he felt a pang of regret. If Apple's previous leadership had Simon's vision and drive, the company wouldn't have fallen so far.
With a sigh, he added, "Well then, Mr. Westeros, or Simon, wouldn't it make more sense to use Windows instead of Linux?"
Simon nodded. "From a business perspective, perhaps. But Peter, I acquired Apple to establish an independent OS platform for the Westeros System. Protecting our foothold in user-end devices is essential for Egret and Tinkerbell."
Realizing the depth of Simon's strategy, Bakker nodded. With no further objections, he resolved to give his all in the months ahead.
The meeting stretched over five hours, delving into budgets, team sizes, and product positioning. Afterward, Simon treated the attendees to dinner before returning to his Woodside villa with two C-girls.
That night, amidst playful banter and intimacy, Simon shared a Chinese poem with the women:
"Alone, the white rabbit,
Looks east, looks west.
Clothes may be new,
But people are best."
Explaining its meaning, Simon accompanied it with a fabricated story, moving one of the women to tears. When she suggested getting it tattooed, Simon humorously insisted it could only go on her foot, as other areas "belonged to him."
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