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 That success was superseded by a spectacular downfall and the company almost went out of business in the mid 1990s.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.