Apple is number two. The statement is usually shouted by PC users to ridicule Apple consumers, but today that statement has an entirely different meaning and those PC users might need to quiet down. At the close of the market today, Microsoft ended with a total market capitalization of $219.18 billion while Apple’s market capitalization was approximately $222.12 billion officially edging out Microsoft as the second most valuable company behind Exxon Mobile. Although Microsoft still has a commanding lead on the amount of products in consumers’ hands, the fact that Apple was finally able to defeat their long time competitor in the stock arena is a statement not only to the standing power of the company but the growth it has enjoyed since the return of Steve Jobs.
It is difficult to predict what this means for Apple especially when the stock market is constantly in flux. However, one thing that can be said is that Apple’s ability to cement itself as the strongest competitor to Microsoft’s kingdom was proven today. Over the course of ten years, a flurry of great products ranging from new generation iPods, to iPhones, and now the iPad have provided the necessary boost in consumer expectations of the company giving Apple the push it needed to overtake Microsoft. Looking at market trends, it’s possible that the high valuing of Apple stock could be attributed to Job’s appearance at WWDC and the inevitable announcement of something new out of the Apple camp. Although this may be true, it would be a short sighted and naive statement to make considering that Apple has consistently been able to deliver products that are acclaimed by both consumers and critics alike and is the clear justification for the results of the stock market today.
Although market value does not imply changes in the near future, Apple overtaking Microsoft could have interesting ramifications for both companies. As we have seen with Microsoft and other number one companies, being at the top of the pyramid creates a shift from innovation toward maintaining a hold on market shares. This is a bad thing because companies become interested in share holders and keeping profits high reducing creativity. In an example from Microsoft, Vista was rushed out of the door and was received very poorly. Likewise, Apple’s iPhone 3GS did not provide the same technological game changing effect as the original iPhone. On the other hand, being the underdog is when creativity tends to unfold. As seen in the massive amount of praise that Apple OSs receive, Windows was forced to rethink Vista. In doing so, they released 7 which has been praised by critics and consumers alike for its ease of access, faster speeds, and doing the things that Vista was supposed to do. Although to assume that Apple will now hold off on all innovation would be a hasty thing to say, it is a slippery slope that Apple and their consumers should be concerned about. Either way, today revealed to the world that Apple, Inc is something everyone finally wants to get their hands on.
Links: Google Finance | CNN Finance
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We plan on doing even more great things in the near future and promise to write the same great quality content. Thank you for the support, Robin!