Gadgets Blog » Apple: the Most Valuable Computer Company?

Yesterday’s top story in the technology world generated a huge amount of buzz, which is perhaps to be predicted. First and foremost, it involved the Media’s Favorite Company, Apple. This in and of itself guaranteed that here would be a disproportionately large media coverage, but to make things even better, the story pitted Apple against Microsoft. Indeed, according to an article in Business Insider, there’s a new king of the computing world as Apple’s market capitalization finally overtook Microsoft’s.

Before we get into analysis, let’s take a look at the raw numbers. At the end of the day on May 26, Apple’s market capitalization was sitting at $222.12 billion.  Microsoft’s was close by, but distinctly less at $219.18 billion.  The companies are the second and third most valuable American corporations, behind only Exxon Mobile.

According to one calculation of enterprise value, Apple is worth $200 billion, with Microsoft worth $197 billion. Market capitalization is the value assigned to a company based off its equity. Equity, largely in part, is determined by stockholders. So the second numbers become more important, as other calculations take factors such as outstanding Assets and Liabilities into consideration.  Still, Apple stands as the more valuable company.

The remarkable turnaround of Apple’s business has been the story of the last decade. Ten years ago, with Microsoft capitalizing on its Windows operating system and Office suite, the company seemed virtually dead in the water.  However, Apple gained ground on the computing giant through embracing new technologies and making computers smaller and more portable. The remarkable success of the iPod and iPhone have created an Apple brand loved and trusted by users around the world. Microsoft was not helped by consumer displeasure with Windows Vista, although Bill Gates’s company is in no way under threat of losing the battle for good.

In economics, competition is key to not only good products, but also affordable prices.  Having two computing giants duke it out can only be beneficial for consumers, and it doesn’t hurt that other companies (ahem, Google) are beginning to make their presence known in the computing market as well. Microsoft could stand to take a lesson from Apple’s business approach over the last several years: innovative new products combined with a fresh and hip brand results in a huge increase in sales. At the very least, Microsoft needs to re-think its position in the market as a whole. Do they want to maintain the status quo, or take some gambles with new products? Here’s hoping they choose the latter.

Image Source: flickr.com/photos/kyz/3233710827

See also:

1. Next-Gen Apple iPhone Leaked to World
2. Microsoft Abandons KIN Smartphone Plans
3. Microsoft Hires Jerry Seinfeld and Gates to Challenge Apple Ads
4. Will Apple TV Take Over the World?
5. Time Magazine Names Apple iPhone Invention of the Year
6. Apple Stores to Close at 2 Tomorrow, Re-Open at 6 p.m.
7. Android Overtaking Apple?
8. Gadget of the Week: Apple Macbook Pro Laptop
9. The Apple iPad Debate: One Girl’s Reasons for Buying