Apple Passes Microsoft To Be Biggest Tech Company
Thursday, May 27th, 2010
Apple has pushed past arch-rival Microsoft to become the world’s biggest technology company.
Changes in the share price values of the two in Wednesday’s choppy trading left the total value of Apple at $222bn (£154bn).
Microsoft is now valued by investors at $219bn.
However, Microsoft still enjoys higher profits than Apple. Its most recent annual net profit was $14.6bn (£10bn), compared with $5.7bn for Apple.
Microsoft also reported bigger full-year revenues of $58.4bn, with Apple on $36.5bn.
The value of a listed company, known as market capitalisation, is calculated by multiplying the number of shares in a company by the current share price.
Apple’s shares closed Wednesday trading down 0.4%, while Microsoft fell by 4%.
Apple, which makes computers, iPods, iPhones and now iPads, almost went out of business in the 1990s.
Its growth is partly owing to the launch of the iPod in 2001.
Although the iPod works with computers running Microsoft’s Windows operating systems, it encouraged more people to to buy one of Apple’s computers.
The big popularity of the iPhone, which has become a big seller since it was first released in 2007, has further boosted Apple’s profits and revenues.
The handset has brought internet access on the move to the mass market, and led to an explosion in downloadable mobile "apps" – applications that enable a huge range of activities, from map reading to booking restaurants.
A new version of the iPhone is expected to be unveiled next month.
Meanwhile, this week sees the launch in the UK and eight other countries of Apple’s iPad tablet computer.
This has already proven to be a big seller in the US, so much so that the UK launch was postponed to enable Apple to keep up with demand in the US.
Apple has to look back to late 1989 to see the last time it was a bigger company than Microsoft.
Microsoft, whose operating system runs on more than 90% of the world’s personal computers, has not been able to match growth rates from its heyday of the 1990s.
While its profits remain much higher than Apple, its earnings per share are substantially less, totalling $1.62 for its latest financial year, compared with $6.29 for Apple.
Microsoft continues to make the majority of its earnings from its software and operating systems, and has struggled to successfully diversify into other products.
However, Microsoft has achieved success with its X-Box games console.
Questioned on the news that Apple was now a bigger company, Microsoft’s chief executive Steve Ballmer said his firm would continue to follow a long-term strategy.
"It’s a long game, we have good competitors… we too are a very good competitor," he said.
"We are executing very well and that is going to lead to great products and great success."
