In the less-than-three months since Apple first passed Wal-Mart to hold the third highest market capitalization among U.S. companies, Apple's stock price has continued to increase while second-place Microsoft has seen its shares drift downward. The combination of events has quickly closed the gap between the two companies, and today Apple finally surpassed Microsoft in market capitalization for the first time, although second-by-second fluctuations currently see the two companies frequently swapping positions.
Market capitalization is a popular metric for assessing the size of a company as a representation of the investing public's notion of the company's worth. The figure is derived by simply multiplying the number of outstanding shares of the company's stock by the share price.
In the case of Apple, slightly over 900 million shares outstanding times over $250 per share yields a market capitalization of about $228 billion. Microsoft, meanwhile, has a share price of only slightly over $26.00 but over 8.75 billion shares outstanding, giving it a nearly equal market capitalization to Apple.
With Apple and Microsoft now neck-and-neck, only Exxon Mobil's $282 billion market capitalization remains significantly ahead of Apple's among U.S. companies. Exxon Mobil's shares have dropped significantly over the past month, bringing its market capitalization down from a high of over $325 billion.
SOURCE: Macrumors.com
So what does this mean? Nothing really. For most of us we should not worry or care about it, but investors will take note. When I read this article I wanted to put some thoughts down on where Microsoft stands now. It’s not really an open letter, but just some things I’ve been thinking about.
If Microsoft continues going in the direction they are going in, they will be left in the dusty by Google and Apple unless they start looking and succeeding in new markets. Yes, Windows will for the foreseeable future always provide Microsoft with money and their Xbox part of their Entertainment division is profitable…but their Windows Phone has been on a decline so they need to slam Windows Phone 7 out of the park. And it looks good so far, but still not much is known about it.
They have been pushing Bing like crazy and it did gain ground (at the expense of Yahoo!) but thye need to keep up with Google and make sure Apple doesn’t pass them in the advertising department with their recently announced iAd.
Next they NEED to offer a very cheap, or hell, free OS for low powered devices other than Windows 7 Starter Edition. They are losing TONS of opportunities the more Android Tablets are announced. Yes, I’m sure windows Phone 7 OS could and will be used in a tablet, but again…they need to hit it out of the park the FIRST time.
This brings me to my next point. Though they are not fans of this its time to think seriously about starting a hardware division within Microsoft. Relying on others to constantly make your products that surround your software A. reduces your creativity and B. makes you one step behind Apple. That’s not to say the hardware they make isn’t good. I like my Zune, but it was made by Toshiba. The ZuneHD however looks great. The Xbox360 looked good in 2005 but it was also introduced with a terrible malfunction that has since been corrected in current Xbox360s.
Microsoft tends to have a lot of great ideas and never do anything
good with them....while Google and Apple actually move forward with
them. At they very least if Microsoft is going to continue being its huge software company it is...it has to at least match everything Google is doing. The issue is, they can't. Google currently offers just about everything to their consumer for free (at the expense of the users privacy). Microsoft could go this route, but so far the money they make on advertising is nowhere near the level of Google's so giving away products for free is tough.
Google has their Google Docs which most casual users can use just fine instead of paying $100 for Microsoft Office. Microsoft recognized this and at least is going to soon be offering a free online version of Office and they need to do more things of this nature.
What needs to stop happening is then umber of failed/canceled projects. Everyone LOVED what they were seeing with the Microsoft Courier. Then out of nowhere, they cancel the project. Robbie Bach, the now ex-Microsoft employee stated he believes technology showed off with Courier will make it into another project one day...and I want to believe him but if I'm going off on Microsoft's track record...I can't. What about Windows Surface? They have only sold these innovative devices to stores and casino's. When I saw a demo of this I pictured having one of these in my living room as my coffee table...but that dream is all but gone.
To wrap this up, I'm a big fan of Windows 7, big fan of Xbox 360 and even looking forward to Natal. But to see the lack of innovation in other areas of computing or simply not even promoting or marketing the few innovative products (have you readers ever heard of Microsoft Photosynth?) are getting old Microsoft. You have the money, you have the marketing dollars you have some great software...stop letting the competition just make you look silly. I wish you luck with Windows Phone 7 (again, it looks superb) and hopefully that Courier does make it out one day.
On the tail end of that, congrats Apple, the iDevices really were a money pit for you. I'd like to see more innovation however and less stress on ease of us. We get it, the iPhone was the easiest phone to use....in 2007. The competition caught up, lets see you leap frog again as you've been playing catch up on features since (copy and paste, Video, multi-tasking etc).
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