Apple, long an irksome thorn in the backside of software giant Microsoft, Wednesday overtook the Redmond, Wash.-based company as the most valuable technology firm. The Cupertino, Calif. company was worth $223 billion at the end of yesterday’s trading, compared to $219 billion for Microsoft.
Key to Apple’s rising fortunes are the iPod and iPhone, turning the desktop computer company into a global consumer electronics giant focused on entertainment and mobility. Apple’s share prices have skyrocketed in the past year, doubling its price to over $244. Meanwhile, Microsoft’s shares have remained relatively steady, inching up to $25, compared to $20 a year ago.
Another factor in Microsoft’s decline was its inability to match Apple’s nimbleness. While Apple shifted gears from a purely U.S.-based maker of high-end desktop computer to a global creator of mobile consumer electronics, Microsoft has been slow to change, seeming a step behind competitors. Although Microsoft’s size helped it dominate the marketplace, it also became a ready target for antitrust lawsuits and other legal actions aimed at the Windows maker.
Apple’s overtaking of Microsoft on the trading floor is just the latest episode illustrating the fading lot for the software firm. Apple’s iPhone OS outsells Microsoft’s Windows Mobile and attempts by Microsoft to catch-up to Cupertino with a tablet, seemed to have also failed. Indeed, Microsoft is losing executives and may shakeup its Entertainment & Devices division, responsible for the Windows 7 Phone, the Zune MP3 player and the Xbox game console.