On Wednesday, after sessions of turbulent trading in the US markets, it emerged that a milestone had been reached. A milestone, if not in the history of the markets themselves, then at least in the history of listed technology firms.
Apple’s market capitalization nudged ahead that of its arch-rival, and perhaps even consumer experience anti-thesis, Microsoft. At least one analyst said that this was the first time Apple had overtaken Microsoft “in size” since 1989. When markets closed on Friday, Apple had a market capitalization of $232.94 billion. Microsoft’s stood at $226.28 billion.
The consensus among many analysts was that this signified a gigantic transition of some kind for the technology business. That from this point onwards, everything would change.
Illustration: Shyamal Banerjee / Mint
But the most sensible analysis came from Microsoft’s Steve Ballmer himself. He dismissed it off handedly during a visit to New Delhi. Channelling value investing guru Benjamin
Graham, Ballmer said that stock markets were voting machines in the short term and became weighing machines only in the long term.
Microsoft, Ballmer said, continues to be a hugely profitable company. He is right, Microsoft made a billion dollars more profit than Apple last quarter. While Apple may be growing much faster—Apple revenue went up 48% last quarter while Microsoft’s grew by just around 6%—Microsoft is still a solid company by any account.
So then what is the brouhaha about?
For many people, Apple is still the anti-Microsoft. While Microsoft has the market share and muscle to churn out one clunky product after another and still make money, Apple has a made a fine art of making people go wow at cash counters. Besides, as Ballmer perhaps admitted in his reaction, Microsoft has never tried to win any popularity contests. It doesn’t want your love as much as it wants your money.
Therefore, when any statistic emerges that shows the perceived popular underdog prevailing, most people will celebrate. That is not to say that change is not afoot in technology. Indeed it is. Between Apple, Microsoft and Google, computing as we know it is changing. The devices, the software and the services we use have never seen as much flux as they are experiencing now.
The battle that will decide which company will emerge supreme, however, will not be won in stock exchanges over ratios or graphs. But in our computers and mobile phones. And that battle still rages.
Apple or Microsoft: Who will win this tech war? Tell us at firstname.lastname@example.org