If you’ve been following the adventures of Microsoft and Apple even casually for the last 10 or 20 years, yesterday was a day of almost unimaginable importance.
Apple actually passed Microsoft in terms of market capitalization.
Market cap is more of a theoretical measure, as it’s based on stock prices that vary by the second — but it’s still beyond huge. Apple is now the second most valued corporation, trailing only ExxonMobil.
Despite Apple’s innovations for 20 years, there was always the harsh reality that they were the upstart, not nearly as “important” in the world of technology as Microsoft. This now officially changes.
What a big day for fresh thinking. Quite dramatically, Apple has now proven that innovation pays. In the past ten years, Apple’s market cap has increased ten times — while Microsoft’s has dropped 20%.
Even if you’re just in it for the money, which some technology companies seem to be, Apple’s business model is infinitely more compelling. With a brand that allows them to collect a premium on their products, Apple makes more money by selling fewer products.
If Microsoft feels a little stung by this development, imagine how Dell must feel — now dwarfed by an Apple valued more than ten times as much.
It’s kind of amusing that Apple’s overtaking of Microsoft happened on a day when the AAPL stock price actually dropped. It’s just that Microsoft’s stock price dropped even more. This is like winning the pennant at the end of a long season because the other team lost. But it is a big win, and it’s the result of all that hard work over such a long stretch.
Microsoft just seems terribly lost these days. It’s almost enough to make you feel sorry for them. But not quite.
While Apple vs. Google fight it out in mobile, Microsoft doesn’t even have a first-row seat. Windows Phone 7 is forever coming soon. Zune is Zune. And last week, the top two guys in Microsoft’s Entertainment & Devices division “retired,” resulting in more involvement from … Ballmer.
This is the same Ballmer who one day after his company fell behind Apple in market cap, says that Microsoft is “executing well.” He hides behind Microsoft’s profitability — which remains obscenely high — but I can’t imagine he can hide there too long.
Given Ballmer’s performance these ten years, the torch-wielding villagers can’t be too far behind.
