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Apple (Nasdaq: AAPL), which has developed a reputation for being the hottest company in the technology space is now the world's largest high-tech enterprise -- at least in terms of market capitalization.
On Wednesday, Apple's total value, based on its share price, reached US$222.12 billion. That makes Apple nearly $3 billion more valuable than Microsoft (Nasdaq: MSFT), which held the title of largest high-tech company for several decades. Microsoft's total value on Wednesday stood at $219.18 billion.
It's no surprise that Apple's wildly successful line of mobile entertainment and communication products, which now includes the iPad tablet-style computing device, is being credited for driving the company's ascent to the top of the industry mountain.
"This represents the momentum that Apple has had in the mobile space starting with the introduction of the iPhone and accelerating recently with the iPad," Carolina Milanesi, Research VP, Mobile Devices, with Gartner (NYSE: IT), told MacNewsWorld.
These products also have spawned a large ecosystem of applications and other devices to support them. That ecosystem, along with the strength of its brand name, gives Apple a distinct advantage over many other competitors, including Microsoft, said Milanesi, though she noted that Apple can't afford to be complacent about its current lofty status.
Other Contenders for the Crown
"The ecosystem battle remains open," Milanesi said, "and it remains to be seen if players such as Google (Nasdaq: GOOG) might be able to improve their position thanks to a wider addressable audience."
Products built on Google's open source Android operating system could potentially attract a larger audience; Apple's devices run on its proprietary, closed platforms.
It's also too early to rule out the possibility of Microsoft coming back to regain its No. 1 ranking, observed Michael Gartenberg, a partner with Altimeter Group.
"Things can change fast in the technology industry," Gartenberg told MacNewsWorld. "It wasn't that long ago that we were seeing headlines about Apple referring to the death of an American icon."
Indeed, in the early '90s, Apple had been left for dead by most industry experts until Steve Jobs, one of the company's cofounders, returned after a decade-long absence, took over as CEO, and kick-started development of what has turned out to be a string of innovative and commercially successful new products.
The Need for a Clear Vision
The lack of a visionary figure in the mold of Jobs is the primary reason Microsoft suddenly finds itself looking up at Apple, suggested Gartenberg.
It's clear that devices that appeal to consumers -- rather than the business applications Microsoft has been noted for -- are driving sales in the technology space, he said.
On Tuesday, Microsoft announced a major shakeup in its entertainment and devices division, the unit that makes consumer-focused products. Two top executives in that division will be leaving Microsoft, and CEO Steve Ballmer will assume control of the unit.
While these moves might suggest Microsoft is scrambling to develop a strategy for addressing the consumer-oriented device market, Gartenberg said the software giant's position is not as dire as it may seem.
"Microsoft has all the pieces to compete in this space," he said.
"They have a good foundation for reaching consumers with nearly nine of every 10 computers running some version of the Windows operating system. They have a direct link into living rooms with the Xbox gaming system, an area in which Apple hasn't had much success," Gartenberg pointed out.
"They have a line of mobile phones with features that can't be matched by phones on other platforms. They also have devices and services for music and video," he continued. "
"What they don't seem to have," concluded Gartenberg, "is a clear vision for how all those pieces come together."
