Wall Street has called the end of an era and the beginning of the next one: The most important technology product no longer sits on your desk but rather fits in your hand.
The moment came on Wednesday when Apple, the maker of iPods, iPhones and iPads, shot past Microsoft, the computer software giant, to become the world’s most valuable technology company.
This changing of the guard caps one of the most stunning turnarounds in business history for Apple, which had been given up for dead only a decade earlier, and its co-founder and visionary chief executive, Steven P Jobs. The rapidly rising value attached to Apple by investors also heralds an important cultural shift: Consumer tastes have overtaken the needs of business as the leading force shaping technology.
Microsoft, with its Windows and Office software franchises, has dominated the relationship most people had with their computers for almost two decades, and that was reflected in its stock market capitalisation. But the click-clack of the keyboard has ceded ground to the swipe of a finger across a smartphone’s touch screen.
Although Apple still sells computers, twice as much revenue is coming from hand-held devices and music. Over all, the technology industry sold about 172 million smartphones last year, compared with 306 million PCs, but smartphone sales grew at a pace five times faster.
Microsoft depends more on maintaining the status quo, while Apple is in a constant battle to one-up itself and create something new, said Peter A Thiel, the co-founder of PayPal. “Apple is a bet on technology,” he said.
As of Wednesday, Wall Street valued Apple at $222.12 billion and Microsoft at $219.18 billion. The only American company valued higher is Exxon Mobil, with a market capitalisation of $278.64 billion.
Ballmer shrugs off Apple rise
Microsoft chief executive Steve Ballmer in New Delhi said he was unconcerned that his company had been overtaken by rival Apple. “It is a long game. We have good competitors but we too are very good competitors,” he said. “Let’s see what happens as I am still pleased that 94 times out of a 100 somebody picks a Windows PC,” he said.