Apple Now Worth More Than Microsoft

Last Wednesday, Apple overtook Microsoft in market value for the first time since 1989. OK, so we know that doesn't really mean anything, but it's still symbolic of one of the biggest developments in the technology market over the last ten years.


It's an interesting situation. At the end of the 90s, Apple inc. wasn't doing well at all. Steve Jobs, one of the company's original founders who had left to set up NeXT Computer in 1985, was called back like a messiah to the mothership and Apple just about managed to stay afloat (largely thanks to Microsoft but that's another story).

At the height of the IT boom in early 2000, Apple was worth an estimated $20 billion while Microsoft, after five years of spectacular growth largely carried by Windows 95/98 and Office, was worth over $500 billion! That's almost as much as the GDP of Spain!

Ever since the NASDAQ crashed, the value of Microsoft has remained stable at around $230 billion. However, the success of Mac OS X, the iPod, the iMac G5 and then the Intel-based iMac caused Apple's value to grow sharply, really taking off in 2005.

In real terms, this role reversal hasn't radically revolutionised the shape of the stock market. After Apple overtook Microsoft on Wednesday, Thursday and Friday were fairly quiet days, with Microsoft's market value remaining stable while Apple's continued to edge up slowly (+4% in three days, no doubt fuelled by the success of the iPad and perhaps rumours of the forthcoming iPhone).

It is, however, representative of a deeper trend in the technology market, as Apple products are slowly gaining ground (10% of our readers now use OS X to access the site and 1.2% use the iPhone). Apple has also thought up some clever ways of boosting its income on a long-term basis, with stores like iTunes and the App Store, whereas Microsoft revenues are pretty much limited to sales of Windows, Office and the Xbox.



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