APPLE v. MICROSOFT

Apple has just overtaken Microsoft to become the world's most valuable technology company. This represents a remarkable turnaround for the former PC pioneer, which had a near-death experience during the 1990's, but which has surged back to financial health under the leadership of Steve Jobs and on the back of the range of savvy products (iPod, iPhone and iPad) that he has brought to market during the past decade. You have to go back to 1989 for the last time Apple was ahead of its rival.

This doesn't mean the end of Microsoft; with a market capitalisation of US$219 billion, it is still one of the largest and most valuable companies in the world, in any industry. Nevertheless, it should cause a few furrowed brows in Seattle. Microsoft currently has much greater sales (US$58.4 billion to US$36.5 billion) and net profits (US$14.6billion to US$5.7billion) than Apple. But Apple's value is higher because the market thinks that Apple has a greater potential to make money in the future. That should be worrying.

Yesterday's development reminds us that companies come and go, particularly in the technology field. When I first started work in 1980, the smartest companies all used Wang electric typewriters. Wang? Who now remembers WordPerfect, once the standard wordprocessing programme, and bought by Novell for a ludicrously high price in 1994? Indeed, who remembers Novell? Yes, companies come and companies go. Apple is one of the very few that have come, gone, and come back again.

Walter Blotscher