Office 2001 for Apple's Macintosh operating system that powers computers like its colourful iMac will hit store shelves on Wednesday with a sticker price of $499 for the full version and $299 for an upgrade from an earlier version.

The new package, which includes the Word processing programme, Excel for creating spreadsheets, and Powerpoint presentation software, is the first major update to the package in two years. Office 2001 also bears a more Mac-like look and feel as well as a Mac-only application called entourage that melds e-mail, a calendar, to-do list and notepad.

"This is unmatched in terms of the collaboration between the two companies," said Clent Richardson, vice president of Apple's world wide developers division.

"We are thrilled by it. This really is a must-have upgrade ... And if you don't have Office 2001 you won't be able to enjoy a lot of the features Microsoft has built into its products," Mr Richardson said.

In an example of the closer collaboration between the two computing giants, Apple, for the first time and with the blessing of chief executive Steve Jobs himself, granted Microsoft a special licence to use the `Mac' trademark in its new marketing campaign for its Macintosh-based products. Microsoft products for Macintosh Systems will bear a `:Mac' suffix, so Office 2001 will actually be sold as `Office:Mac', for example. New era of partnership"You're seeing a new era of new partnership between the two companies. In the past we couldn't talk to each other without having lawyers in every room, and today we're talking across every level of the business,'' said Mr Kevin Browne, general manager of Microsoft's Mac business unit.

The rivalry between Apple and Microsoft dates back to the early days of personal computing in the 1980s, when Mr Jobs and Microsoft co-founder Bill Gates went head-to-head for control of the budding market.

By the mid-1990s, however, Microsoft was the clear leader, with its Windows operating system having an estimated 90 per cent market share while Apple teetered on the verge of collapse. In 1997, Microsoft took a $150 million investment in its struggling competitor and pledged to continue making Macintosh software, a commitment that many analysts say helped to pull apple back from the brink.

Mr Browne said Microsoft was looking at making a version of Office for Apple's upcoming upgrade to the Macintosh operating system, Mac Os X, which is pronounced `OS-TEN'.

"We are able to take our technical teams and put them full time looking at OS X. We have nothing to announce at this point. It would be hard to call a time when you can expect that,'' Mr Browne said.

Mr Browne's team was also looking at how to infuse upcoming Mac products with elements of Microsoft's new .Net strategy that will build Internet features into products like office and start to sell them as a subscription service rather than as boxed software.

"We want to be able to allow Mac customers to take advantage of everything Microsoft has to offer," Mr Browne said.

Shares in Microsoft rose 3/8 to 54-9/16 on Tuesday while those in Apple fell 7/8, or 4 per cent, to 20-15/16.