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They trashed Mach and Rapsody and bought out NEXT to get Steve back full time. OSX is mostly updated NEXT, right down to Objective C and API names.

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Rhapsody (with the underlying Mach kernel) was the NeXTSTEP stuff in a preliminary stage of Mac-ification. The strategy of what to do with the NeXT-based OS vs. what became known as "Classic" was in flux when Rhapsody saw its first developer previews, but ultimately Rhapsody was transformed into Mac OS X. The biggest additions, IIRC, were the Carbon APIs and the Aqua UI.

Exactly. And back then, getting "Steve back full time" wasn't what they were betting the farm on. More than anything, Apple was desperate for a next generation OS. Their choice was between NeXT's OpenStep and the BeOS. Obviously, they chose NeXT.

Now in hindsight, due to Apple's success post Steve's return, many claim that he was the play all along. At the time, though, that wasn't the consensus of people I knew in and around the Apple sphere in Cupertino.

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