The company that introduced the world to the iPod shot past Microsoft this week to become the world’s most valuable technology company, The New York Times reveals. The turnaround is credited to Apple’s CEO, Steve Jobs, who helped create “the best desktop computer, the best portable music device, the best smartphone and also now the best tablet,” according to Steve Perlman, a serial entrepreneur, former Apple exec (and also former Microsoft exec).
According to the paper, Wall Street valued Apple at $222.12 billion and Microsoft at $219.18 billion, as of Wednesday. Exxon Mobil, with a market capitalization of $278.64 billion, is currently the only American company valued higher.
The report states that Apple’s rapidly rising value signals an important cultural shift: “Consumer tastes have overtaken the needs of business as the leading force shaping technology.” The paper goes to note that, by contrast, “Microsoft depends more on maintaining the status quo, while Apple is in a constant battle to one-up itself and create something new,” citing Peter A. Thiel, the co-founder of PayPal and an early investor in Facebook. “Apple is a bet on technology,” he said. “And Apple beating Microsoft is a very significant thing.”
The report does acknowledge that Microsoft has dominated the relationship most people had with their computers for almost two decades, thanks to its Windows and Office software franchises. This was well reflected in its stock market capitalization, it adds. However, “The click-clack of the keyboard has ceded ground to the swipe of a finger across a smartphone’s touch screen,” the paper appropriately outlines.
“It is the single most important turnaround that I have seen in Silicon Valley,” Jim Breyer, a venture capitalist who has invested in some of the most successful technology companies, said. However, Apple faces a new rival today – Google –, which develops the Android mobile operating system that competes with the iPhone OS, and has a huge lead in mobile advertising, the NY Times points out. Tim Bajarin, a technology analyst who has been following Apple since 1981, weighs in on the matter, saying that, “The battle has shifted from Microsoft against Apple to Apple against Google.” “Apple has a significant lead. But Google is going to be a powerful competitor.”