In a startling statistical event marked on Wednesday the 26^th, Apple surpassed Microsoft in stock-market capitalization to become the largest technology company in the world, and the second-most valuable publicly traded U.S. company, trailing only Exxon Mobil. This has become the most striking turnaround, not only in Silicon Valley, but the business world. Apple which was on the verge of bankruptcy only a decade ago came to become a market leader, one which has revolutionized the industry.

Year to date, Microsoft is down 15% and Apple seems unstoppable as it soared almost 22%  closing the US 80 billion gap with Microsoft. Since the end of 2008, in the midst of the economic crisis, Microsoft has gained 38% meanwhile Apple enjoyed a stellar run as it returned 198%. Microsoft has shed 15% of its value as its undergoes some “structural changes” as per the CEO’s announcement, Steve Palmer. While, Apple is also going through some structural changes in trying to cover the shortage in its latest hot product, the IPad. The outperformance is not only in terms of stock price, but revenue growth as well. Apple as decreased the revenue and profit gap with Microsoft, with only US 1 billion difference in their net income as per Q1 2010 financials. In the March quarter, Microsoft’s revenue rose only 6%, while Apple’s climbed 49%.

So what’s the reason? Well, sadly Microsoft’s team seems to run out of ideas and innovation, as its only major  technological breakthrough was the Windows 95. The latter were only alteration to the first model. Meanwhile Apple seems to be on a streak of endless innovation and revolution. From the first generation iPod in 2001, Apple has produces an infinite line of endless colors and shapes. The first, which used to come in only two storage capacities, 5 and 10gb, has evolved into the 6^th generation iPod classic with a new interface that comes in three storage capacities, 80 and 120 and 160gb. With time the iPod line has expanded to include the Mini, Shuffle, Nano, and Touch. Now that Apple has exploited every opportunistic alternation possible in the iPod line, it released a new class of devices between smartphones and laptops.

Although Apple has reshaped the industry, changing the relationship between people and their computers, from a device that sits on your desk to one that fits your palm; they should watch out for a new powerful rival, Google, which is planning to compete with Apple’s mobile devices and operating system. Now that the Windows Era is over, where does Apple truly stand?

Tags: apple, Exxon Mobil, Market Capitalization, Microsoft

This entry was posted on Sunday, May 30th, 2010 at 1:12 pm and is filed under World. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.