iDominance

Ed Oswald at Technologizer:

In a sign of Apple’s continuing ascension to the top of the technology heap, at 2:30pm ET today the company became the most valuable technology company in the world with a market capitalization of $227.1 billion. This was slightly morethan Microsoft’s $226.3 billion.

Both shares took a significant tumble late in the afternoon as the market gave up its gains and then some in the final hour of trading. Even so, Apple still finished in front at $222.1 billion, far ahead of Redmond at $219.2 billion.

How important is this? On the entire New York Stock Exchange there is only one American company that is more value, and that is oil giant Exxon Mobil. It also completes what could really be called a stunning comeback for Apple, which as recently as teh years ago had been in bad financial shape.

One ironic point: Microsoft itself could be credited with helping bring back Apple from the dead: in 1997, the company made a $150 million investment in the company shortly after Steve Jobs returned for his second and current stint as CEO

MG Siegler at TechCrunch:

Some publications reported this milestone happened back in April, but that was a slightly different metric. That was the market cap on the S&P 500, which uses float-adjusted numbers. Today’s milestone is straight-up market cap: numbers of shares outstanding multiplied by share price.

Of course, just how much this number means is a matter of debate. The truth is that it really doesn’t mean that much in terms how strong or weak a company is from a financial perspective. But it is a good indicator of trends, and obviously stock performance. That trend is obviously that over the past five years or so, Apple has been destroying Microsoft is gaining stock value.

Over those past five years, Microsoft’s stock has been largely stagnant: it’s up about 4%. Apple’s stock, meanwhile, is up some 550% over that same time frame.

Regardless of how the market closes today, you can likely expect Apple market cap to surge ahead in the coming days. A week from this coming Monday is Steve Jobs’ keynote at Apple’s WWDC event. There, he’s widely expected to unveil the new iPhone — and undoubtedly some other things. The mere speculation about what he’ll unveil will fuel the price. Microsoft, meanwhile, is losing key executives.

Dylan Tweney at Wired:

Ten years ago, Apple was all but written off by most expert commentators. An also-ran computer company that once dominated geeks’ hearts and minds with the Apple II and the Macintosh, Apple made serious missteps in the 1990s that relegated it to a tiny niche of the overall computer market, with market share in the low single digits. It was all but certain that its share would continue dwindling until the company faded away entirely, like Commodore, Atari, Tandy and dozens of other computer makers before it.

What the commentators didn’t count on was the string of hits Apple would deliver over the next 10 years. Founder Steve Jobs returned to Apple in 1996 and removed then-CEO Gil Amelio in 1997, making himself interim CEO (and then eventually dropping the interim title).

Jobs then instituted what can now clearly been seen as a far-reaching strategy to consolidate and simplify Apple’s product line, while gradually leveraging the company’s strengths (ease of use, consumer-friendly branding, attractive design, and high margins) to expand into new areas of consumer technology.

Jobs also carefully created a new company culture, one that’s centered on innovation, control and secrecy. That approach has alienated many people — and runs counter to Silicon Valley received wisdom about the value of openness and sharing — but the proof is in the pudding. With a CEO of Jobs’ caliber, at least, that kind of top-down control works.

This list of product rollouts tells the story:

  • iMac (Bondi Blue) – 1998
  • iBook (clamshell) – 1999
  • iPod with scroll wheel – 2001
  • Mac OS X – 2001
  • iTunes Store – 2003
  • MacBook (switch to Intel) – 2006
  • iPhone – 2007
  • App Store + iPhone SDK – 2008
  • iPad – 2010

By 2010, Apple had firmly established its dominance (in mindshare and innovation, if not in absolute numbers) in three areas: computers, MP3 players and smartphones; the company also controls an increasingly large marketplace for music, video and applications with iTunes, which counts its users in the hundreds of millions and has served more than 10 billion songs, 200 million TV shows, 2 million films and 3 billion apps. Apple’s now the largest distributor of music in the United States with 26.7 percent market share, according to a Billboard analysis.

The recent introduction of the iPad — Apple claims over a million have been sold so far — may not move the needle much in terms of revenue, but it’s probably what pushed the company’s stock over the top. Early numbers of 200,000 sales per week suggest that Apple’s iPad is on track to outsell the Mac.

Macs still account for fewer than one in 10 computers sold, but its market share has increased significantly in recent years and the company has built a consumer juggernaut that extends well beyond the computer.

As for Microsoft, the company remains highly profitable, but investors and analysts alike are concerned that Microsoft remains dependent on its Office and Windows franchises for the lion’s share of its profits. The company has poured billions into its cell phone, online advertising and other new businesses that have yet to really help the company’s balance sheet.

Even its desktop franchises are seen as vulnerable in the longer term, particularly as Google aims to deliver many of the same capabilities through the browser.

So where will things go from here? Will Microsoft be able to transform itself into a company whose cloud computing and search efforts someday produce returns on the scale of Windows and Office? Will Apple’s remarkable run continue? Sound off below.

Derek Thompson at The Atlantic:

Where’s Google, you wonder? A bit behind, with a market cap value of about $150 billion according to Yahoo Finance. Rounding out the top six, as of March 2010, according to the Financial Times Global 500, are Wal-mart, Berkshire Hathaway, and General Electric.

Kevin Kelleher at Big Money

UPDATE: Reihan Salam at The Daily Beast

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One response to “iDominance

  1. Pingback: What We’ve Built Today « Around The Sphere

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