Kate Nicholson
May 28, 2010

Apple steals Microsoft's crown: The end of an era?

GLOBAL - Apple has overtaken long-time rival Microsoft to become the world's largest technology company. As the brand takes its crown as the king of the tech industry, analysts say it's because the company has found the balance between innovative technology and consumer understanding.

Apple steals Microsoft's crown: The end of an era?
After more than three decades of rivalry between Steve Jobs and Bill Gates, the founder of the iPad maker saw his company take the lead on Nasdaq. At the close of Wednesday’s trading, Apple was valued at US$222 billion, while Microsoft was worth $219 billion. Apple’s shares ended the day at $244.11, while Microsoft’s finished at a seven-month low of $25.01.

David Wolf, CEO of Wolf Group Asia, saids Apple's outlook has led to its success: "Apple tends to look at its challenges. It's all about enabling experiences, about lifestyle. Microsoft still tends to see things from a tech standpoint. It's no longer just about technology, it's about digital lifestyle. You could say Steve Jobs is the ultimate consumer at Apple. I don't think there's that kind of leader at Microsoft. The company has to evolve."

iPod, iPhone and the latest iPad have been cited as the reasons for the recent successes of Apple. In the past five years alone Apple's stock has risen nearly 560 per cent while Microsoft's has risen a mere four per cent. Analysts say Apple and Google have successfully filled a consumer gap that Microsoft missed. However, later this year, Microsoft will begin selling its Windows Phone 7 series of smartphones in direct competition with Apple's iPhone. 

Saurabh Sharma, strategic planning director at Ogilvy & Mather Advertising said: "People upgrade when they see stuff that is inspiring, sexy and really new. That is what Microsoft needs – products that inspire, products that surprise, experiences that can be shared.

Yu Sasamoto, marketing officer, consumer and online, greater Asia-Pacific at Microsoft said there have been internal and external challenges. "The ironic thing is Mircrosoft has been so successful. As a new company, Apple has been able to do a lot of new things and hasn't had much to lose. It will also have its own dilemmas when it reaches a certain point in its success. Apple has found its success in the value of its products, and one that is integrated. But it's still not a perfect ecosystem."

Sasamoto said Microsoft has been working, especially over the last two years on developing a consumer and online group that will build on the digital experience the brand offers. He added: "Microsoft can work with many partners – whether that's Siemens or Toshiba. We can reach a very wide audience. This is where we will keep our strength."

Sharma reinforced this. "I think the biggest strength of Microsoft (and Nokia) is the number of people that use their software and hardware respectively every day.  Apple won't get near this anytime soon. This is a very big asset waiting to be leveraged."

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