This week marked the pinnacle of the most impressive turnaround in the history of the technology industry. Apple, who only 10 years ago was thought to be out of the game and on the verge of shutting its doors, became the most valuable technology company in the world.
The valuation is based on an increase in Apple's stock price on Wednesday spread across the number of shares outstanding. That value, $222.12 billion, is higher than Microsoft's value, calculated the same way at $219.18 billion. The only American company to have value above these two giants is Exxon Mobil, valued at $278.64 billion.
Now, this number has nothing to do with the real-world value of these companies but only perceived market value. To illustrate this point in their last financial years, Microsoft had net income of $14.6 billion while Apple's net income was only $5.7 billion.
What this means is that the market has a lot of trust in the future capabilities and profits of the company. It also shows a shift in the thinking of the tech industry. The driving force behind technology has always been business and with the ascension of Apple to the top of the industry it illustrates that consumers are now the driving force. With smartphone sales raising at a rate five times that of personal computers, Apple will be ushering in a new era of consumer-focused technologies.
Steve Ballmer, CEO of Microsoft, seemed to think the news was less important than the market did, saying,
No technology company on the planet is more profitable than we are. On any given day, the stock market is a voting machine... in the long run is it a weighing machine.
What is your take on this? Is it a big deal that their stock price is higher than Microsoft's or is handheld computing a fad? Let us know in the comments section below.