Editorial

Apple overtakes Microsoft to become the world's most valuable tech firm

It's official, Apple's market cap is now bigger than Microsoft's.

As of early afternoon today, Apple's market capitalization on the NASDAQ stock market is higher than Microsoft's. Market cap is one of many ways that the financial markets measure the value of a company. It is worked out by the value of the stock versus the amount issued. As it stands right now Apple is valued at nearly $227 billion compared to Microsoft's $223 billion. Although Apple's market cap is higher right now, Apple does not issue dividends to its share holders whereas Microsoft does and this affects the comparison. Companies can not be compared on market cap alone, however this is a significant milestone for the folks in Cupertino and for the industry as a whole.

What does this mean for Microsoft?

It's a clear wake up call and solid proof that Apple's gains in the mobile market and MP3 player market have turned the company around. In the past five years alone Apple's stock has risen nearly 560% whilst Microsoft's has risen a mere 4%. The New York Times names Apple the new King of Technology. Despite Microsoft's domination with its Windows and Office software the company struggles to compete in search, mobile the MP3 player market. All three markets are huge areas of growth, innovation and provide opportunities for huge profit gains. With the recent news of Microsoft's re-organisation just beginning to settle, it's clear the company has a huge task ahead to regain market share, mind share and most of all to swing consumers taste. It's clear that over the last five years consumers needs and tastes have shifted from business focussed devices and software to devices that work well, are simple to use and are good looking. Consumers also want something that works quickly with a simple user interface. Apple and Google have successfully filled a gap that Microsoft missed. Microsoft dropped the ball on Windows Mobile but will Windows Phone 7 be too late too?

Image Credit: Businessweek

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