Yes it was.
http://en.wikipedia.org/wiki/Macintosh
"The first Macintosh was introduced on January 24, 1984; it was the first commercially successful personal computer to feature a mouse and a graphical user interface rather than a command-line interface. The company continued to have success through the second half of the 1980s, only to see it dissipate in the 1990s as the personal computer market shifted towards IBM PC compatible machines running MS-DOS and Microsoft Windows."
Steve Jobs left Apple in 1985. Windows 1.0 was released in the same year. However Windows struggled at that point. According to Microsoft (see http://www.microsoft.com/windows/winhistorydesktop.mspx for confirmation) the first successful version of Windows was Windows 3.0. That was released in 1990, and its main competitor was a severely mismanaged Apple. At that point Bill Gates was emphatically not competing against Steve Jobs.
As Jobs said at the time: "We have to let go of a few notions here. We have to let go of the notion that for Apple to win, Microsoft needs to lose.”
Pretty much, yes. It made him seem like less of a monopolist.
Worked out to be a winning bet for Gates.
That's what happens when you bet on every horse in the race. It's something that Microsoft does a lot.
In the early '90 support for Apple's hardware / OS was a second class citizen and it still is in many areas.
An investor who could only envisage one winner may be a little naive. It's not a horse race.