Apple Overtakes Microsoft to Become the Biggest Technology Company

Unless you’re an avid reader of the business press, it may have escaped your attention that Apple recently overtook Microsoft to become the world’s largest IT company. Investors value Apple at $222 billion whereas Microsoft is slightly lower at $219 billion. When you start discussing valuations of this size, a few billion either way hardly matters. In addition, Microsoft still enjoys higher annual profits at $14.6 billion compared to Apple’s $5.7 billion. However, the valuations remain important in the business world and Apple will be reveling in their new status at #1.

The last time Apple was bigger than Microsoft was 21 years ago in 1989. That success was superseded by a spectacular downfall and the company almost went out of business in the mid 1990s.

Apple’s revival owes everything to Steve Job’s retaking of the reins. The colorful iMac PCs put the company back on the right track. They were followed by the success of the iPod music player, the iTunes music store, the iPhone, the new iPad and Apple’s App Store.

While the products were great, I suspect part of Apple’s success owes much to people’s perception of the company. They were seen as underdog innovators at a time when Microsoft was in and out of various courts accused of evil anti-competitive business activities.

It will be interesting to see whether these perceptions change now Apple is the undisputed champion. There’s far more competition for their products, they’re no longer exclusive items (everyone appears to have an iPhone!) and Apple has started engaging in its own dodgy dealing practices.

On the contrary, Microsoft has received universal praise for Windows 7 and the new versions of Office and Visual Studio. The company seems more humble following the PR disasters of Vista, IE6 and various EU lawsuits (although they still have a tendency to produce silly things such as the ridiculous IE9 HTML5 compatibility charts).

Or perhaps everyone now realizes both Apple and Microsoft are huge corporations trying to gain a competitive advantage (almost) any way they can?

What do you think? Will perceptions of Apple change now they’re the largest IT company? Vote now on the SitePoint home page and leave your comments below.

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  • dawgbone

    Why do people keep comparing apple and ms? They aren’t really competetitors.

    Microsoft does not make computers, apple does.

    Microsoft focuses on corporate software tools, apple focuses on individual electronics.

    Apple does not make an OS that can be installed on nearly any type of computer, MS does.

    Microsoft focuses on gaming, apple focuses on music/video.

    • http://www.optimalworks.net/ Craig Buckler

      Really? Microsoft has music players, mobile phone OSs, and tablets (before Apple). And Apple is more than willing to target Microsoft in the business world.

      • http://www.jonathanpenny.co.uk jonpenny

        Apple only target Microsoft because it’s the “cool” thing to do. Very clever marketing by Apple but now people are starting to see they are just as evil and money grabbing as Microsoft. And before Apple fan boys start ranting and raving ALL companies are money grabbing. They are there to make a profit after all.

  • Arlen

    Don’t mistake “largest” for “richest” or most valuable. Apple is not now nor has it been (in recent memory) larger than MS. It *is* worth more, according to some valuations of market capitalization, though it should probably be noted that the official one you’re using doesn’t take employee-owned shares into account. Bill Gates himself probably owns enough to offset the difference in valuation.

  • kj

    of course!

    Apple make great products no doubt. But the “controlling nature” of the way you have to interact with these products sucks ass! Why is bluetooth not open on the iphone? Why do you HAVE to use itunes to do anything to the iphone? Why is the ipad released without a camera/phone ? All of this is readily available on other products from other companies but Apple will wait until the ipad has saturated into the market , milked it and then release the generation 2 ipad with ..wait for it… a camera.. and market it as a revolutionary step forward for mankind …WOW.. shut the **** up apple!

    • Johnny Appleseed

      Yeh – nothing is more controlling than a company that makes crappy products no one wants to use – but has to use.

      Can you guess which company I’m referring to?

    • TheMonk

      Kj makes some valid points about the controlling nature of apple that really isn’t discussed much. Do they make nice looking and good products, sure, but so do lots of other companies. I think apple has great marketing and lots of people buy into it.

      But for those that thought Microsoft was a bit of a tyrant when they were king look out. If apple’s past and recent behavior is any indication they will be even more controlling. Pretty ironic given their break out parodying 1986 involves someone breaking a large screen with a depiction of “the establishment”.

      Regarding apple overtaking Microsoft Arlen pretty much nailed talking about valuation vs real value. I think a better means of measurement is market penetration and while Microsoft has taken a hit there, it clearly is still the leader with an installation base in the majority of businesses today.

      • sfrost2004

        It’s 1984, not 1986. The ad was referring to the novel by George Orwell, “Nineteen Eighty-Four”.

      • Johnny Appleseed

        What a dumbass – it’s 1986. No wonder you use Windows.

      • http://www.lunadesign.org awasson

        Really Johnny? Is that all you got from TheMonk’s post? You haven’t even touched any of his points. All you’ve done is parrot that he misquoted the title of Orwell’s book… And he’s the dumbass?

        You’re not projecting a very good representation of the typical Mac user with that type of response. How about a little civility or maybe a thought provoking response instead of name calling.

        I won’t add “No wonder you’re on a Mac” because I’m on a Mac and you’re giving us a bad name :(

    • https://twitter.com/scotthoff scotthoff

      I agree. I want to take pictures with my itouch!

  • wwb_99

    I’d really argue that Apple is a Consumer Electronics & Media company that happens to sell computers.

    And what Arlen said.

  • http://fvsch.com Florent V.

    For the record, Google (GOOG) has a market cap of $160 billion, roughly two thirds of Apple (AAPL)’s.

  • Anonymous

    Gotta give it to Apple. They did things the right way. They built things themselves to perfection from the ground up, where as Microsoft tried to leap ahead in so many different direction it left them with junk on all fronts and now are facing the consequences of those actions. Only recently has Microsoft opened there eyes as Apple bit at there heals and now they struggle to get customers back, but I have to say since I switched all my computers in the house to Apple that i’m never coming back. Things just work all to well and i’ve never had a hard drive crash or a blue screen in 4 years.

    • Anony

      I’ve been using Microsoft computers extensively for more than ten years and I’ve NEVER had a blue screen of death and the only hard drive crash I had was my own fault (teh pron…)

    • Jon

      Microsoft is OS and software. I have 2 Dell PC’s in the house, and have had others in the past…. I haven’t had a blue screen or hard drive fail…

      So it’s probably down to buying rubbish PC’s rather than a Microsoft issue… How much did you spend on your PC’s that failed? How much did you spend replacing them all with Macs?

      I get really fed up with Mac owners telling me how they hate Microsoft and how PC’s are rubbish… It’s like they’ve all been brain washed into the whole Mac sales thing… They all have an iPhone, want an iPad, use iTunes and also have an old iPod. None of them seem to see their limitations, as mentioned by KJ… In fact Apple are turning into something worse than Microsoft ever was, especially with the recent Flash ban too…

      Arlen and KJ are both correct… How many Mac users have told me that Apple overtook Microsoft the other day… Several… It’s taken them years! And if it changed back, would all of our accounting staff using PC’s say the same thing back tothem… Nope!

      • http://www.jonathanpenny.co.uk jonpenny

        The Mac I use in work crashes more than my XP machine in work.

        It also crashes more than my PC at home but that’s mainly down to the fact I use Ubuntu at home unless I’m gaming, then I have to boot into Vista. Which also crashes less.

    • rozner

      Ok I switched to Mac from Windows 3 years ago. I like OS X but it’s not perfect. I’ve had the blue screen of death on my mac, it only happened once, and it’s not quite blue, but same result. Anyway, Macs do crash, and blue screen of death occurs much less now that it used to. I still use Windows at work every day. Hard drive crash has nothing to do with Microsoft, they don’t manufacture hard drives.

    • http://www.lunadesign.org awasson

      Yup, I also have to agree that Apple makes some damn fine hardware and OSX Snow Leopard runs flawlessly for me.

      Windows XP never blue screened in the 8 or so years that I used it but it was slowing down with every service pack and even though I had a couple of Gigs of RAM it started complaining that it was running out of memory when I could see it still had at least a Gig free. I also have a Vista computer that’s about a year old but it’s dog slow and used to blue screen all the time. Once it got SP2, it settled down but it doesn’t hold a candle to my 27″ iMac. It doesn’t even compare.

  • Adelante

    I feel that more and more people dislike the way they work. The evangelical marketing and the restrictive practices are becoming an issue for many.

    • W2ttsy

      Why do people always jump on the “its a restrictive platform” bandwagon?
      So you don’t want to use iTunes to manage your iPod? boo hoo… Have you ever tried to sync a windows mobile device? Even Nokia has “Nokia Suite”. Personally I am greatful that my iPod is managed by iTunes… you know the app with all my music on it?

      People forget that the iPod/iTunes combo is a gateway drug to the Mac. People love iPod’s simplicity and they love how easy it is to use iTunes, so the next logical step is to go Mac.

      Its not evangelical marketing, its a sensible long term plan. The downfall of Apple in the 90s was due to them abandoning this exact philosophy.

      • Adelante

        sensitive hey!

  • USPatriot

    Your missed the point about tech, Craig. No surprise. The real question is, which company makes you more money, Microsoft or Apple? Since Apple makes iHype products and no developer tools, they take you money. Microsoft makes developer tools, from Servers (Windows, SQL, .ect) and the .NET framework, MS makes me good $$$$$. Can’t say that about Apple. Couldn’t care less about the ‘latest and greatest’, I just care about Capitalism, and God Bless it. Buy your over-priced toys, while I makes a good living.

    • http://www.optimalworks.net/ Craig Buckler

      Apple make no developer tools? Apple force you to use their developer tools – that’s one of the biggest complaints.

      That said, many people are making lots of money from iPhone Apps. You can make money from any IT product – it doesn’t need to have a Microsoft logo on it. But you’ve gone a little off-topic here.

  • Backlink Booster

    While Apple’s market cap is higher than Microsoft’s, Apple is WAY behind Microsoft in terms of revenues and earnings. As a result, Apple’s high market cap works against it in terms of performing for investors.
    Furthermore, Apple has become a media darling. The media fawns over every Apple announcement and gives them a pass on many issues.
    Furthermore, Apple’s closed-source policy is highly restrictive and not in the best interests of their customers. Plus, Apple products are SERIOUSLY overpriced, and Apple reliability is not nearly as great as the media claims. I have had constant issues with my iPod, iPhone and PowerBook…both software and hardware related. I have several laptops that have never experienced an issue, other than being the target of viruses. However, the virus software mitigated those issues for my Windows systems, yet my Mac was infected.
    Overall, Apple is a darling of a company and people have fervor for it. However, Apple better watch out and not get too cocky or else the drop will be hard.
    While Microsoft is not necessarily “sexy” anymore, it is an extremely solid and highly profitable company. That’s where my investment money goes.

    • Anna

      Gee, I never realized Microsoft was EVER considered “sexy” or “stable”… Not two words I think of when I think Microsoft…

      Why does everyone refer to Apple as plural? Isn’t Apple one company and therefore be referred to as “Apple is…” not “Apple are…”

      Just my .02

  • Anonymous

    Our business uses nothing but apple, its a great company and supersedes Mac in several ways. At Anchor Wave Internet Solutions we invest in apple technology. From Apple computers to Ipads, the co-founder even uses the newest apple phone technology to get in touch with his clients. The new iphone for example will be fabulous in working with video conferences.

    • Anonymous

      How can apple supersede Mac?!?! They are one and the same pal… It’s not the tool, it’s HOW you use it, and anchor wave internet solutions might not want you throwing their name around if you are coming off sounding less than knowledgeable…