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Apple Surpasses Microsoft as No. 1 in Tech, Wednesday

May 27, 2010Sparxoo

Wednesday marked the changing of the guard in tech: “Wall Street has called the end of an era and the beginning of the next one,” writes the NY Times. “The most important technology product no longer sits on your desk but rather fits in your hand.” Apple, considered an innovation pioneer, surpassed Microsoft as most valuable tech company, on Wednesday.

Wall Street valued Apple at $222.12 billion, slightly higher than Microsoft at $219.18 billion. Apple is also catching up to its arch rival in revenue with $42.9 billion and $58.4 billion, respectively. Steve Jobs, Apple’s CEO, declined to comment on the milestone, but Microsoft’s CEO, Steve Ballmer, shared his thoughts: “No technology company on the planet is more profitable than we are,” while touting Microsoft’s cloud computing strategy.

Ballmers arrogance might be blinding him to an incredible paradigm shift in tech markets. In an age where innovation drives consumer desire, Microsoft has fallen by the wayside by maintaining the status quo while Apple has fueled that desire with such game-changing products as the iPod, iPhone and iPad.

Consider every new market Apple explores, it explodes on the scene with a new perspective its peers seem to lack, and soon follow. As Apple pushes for a leadership position in consumer markets with new innovations, like the iPad, Microsoft needs to get wise, fast.

Among its peers Apple faces only one other major threat: Google, slightly behind Microsoft and Apple’s valuation at $153 billion. “The battle has shifted from Microsoft against Apple to Apple against Google,” said Tim Bajarin, a technology analyst who has been following Apple since 1981. “Apple has a significant lead. But Google is going to be a powerful competitor.”

At Sparxoo, we’ve tracked Google’s rise against Apple in the emerging mobile ad, TV, tablet, app and smartphone markets.

Anticipation for an epic battle came to a head, when Google made an historic milestone of surpassing Apple’s iPhone with its Android OS in global sales in early May. Android placed number two in the smartphone market with 28 percent share, slightly behind RIM’s number one position at 36 percent and ahead Apple’s 21 percent.

Google and Apple are also competing for the $600 million mobile ad market. The FTC greenlighted Google’s $750 million acquisition of AdMob, giving it a 21 percent market share, compared to Apple’s 7 percent.

Apple now shares the same consumer platform with Google. The search giant gets the consumer market just like Apple: both fuel consumers’ desire for cutting-edge, game-changing gadgetry. While Microsoft invests in more cash and short-term investments, Apple and Google pour over innovation and bet on future prospects.

Apple’s historic milestone Wednesday, although likely ephemeral, hints to a new future; a changing of the guard in tech markets. Apple and its new rival, Google, are pushing Microsoft off the stage by feeding a consumer market ravenous for innovation and mind-blowing gadgetry. As Ballmer kindly noted, Microsoft is still the dominant bull, but if it wants to secure a long-term leadership position it needs to take a hint from its cutting-edge competitors quickly gaining steam.