Apple Passes Microsoft: A Geek is Vindicated

Wednesday, May 26, 2010 - 08:55 PM

If you had told me, 13 years ago, that Apple would one day be deemed more valuable than Microsoft, I would have laughed and laughed and laughed. I wanted it to happen, mind you, but knew it would only come about in some science fiction world where the better product was actually rewarded by consumers and the markets worked as perfect dowsing rods for business acumen. I would have chuckled ruefully, and gone home through a Microsoft-dominated world to talk to my aging Mac Powerbook 520.

Today, at 4 p.m., the unthinkable happened: Apple Inc. finished the day worth more (in the eyes of those buying its stock) than its once-chief rival, Microsoft Corporation. As the markets closed, Apple's stock price put the company at $222 billion, just over Microsoft's $219 billion.

This ex-geek says: Booyah.

Apple's recent Midas-touch for products has provided years of glowing headlines and a tech journalism industry that breathlessly chases the smallest clues about what the company will do next. But back in 1997, Microsoft was worth $147 billion to Apple's $2.3 billion, and speculation had run rampant for years that Apple would be snapped up by some bigger company... or simply fold.

Explore more AAPL Data at Wikinvest

(Note Apple's miniscule market capitalization in the graph of 1997's tech sector, above. Now scroll forward to 2009.)

In 1997, the company's future seemed as uncertain as a frog crossing a freeway. Apple made desktop computers and a few fledgeling laptops running its MacOS operating system, but "IBM-compatible" PCs outnumbered them in nearly every market. Analysts predicted the company's demise. Apple itself seemed unsure of its direction, even when it had something promising in hand; the Newton had inspired the term "Personal Digital Assistant," but would soon be killed by Steve Jobs, and Apple's short-lived experiment allowing other manufacturers to legally make Macintosh 'clones' would also end soon. Schools with money liked Macintosh computers, as did publishing houses and graphic designers ... but these were niches too small to survive within. Microsoft's "Windows 95" dominated the office computing landscape; offices running anything else were vanishingly rare.

I worked at one of those rare offices: a small Boston technology consultancy that had made the choice to seat its executives and consultants in front of Macintosh computers in the office, and send them out on the road with Powerbook Duos. I worked in IT, then, fixing the inevitably coffee-splashed laptops and shepherding fileservers and printers into line. I was a fierce Apple partisan, deriding Windows' instability, inconsistency and general balkiness. I would snort derisively at the idea that Windows was better in any way than MacOS, though most of my friends used Windows and rolled their eyes when I listed its shortcomings. I played games on my Mac (Marathon, anyone?) and balanced my checkbook and wrote long email messages to my parents, attempting to convince them that their life and mine would be made immeasurably simpler if they'd just switch to Macs and stop calling me so often for tech support.

(In my own defense, I was 24. Zealotry comes easier at that age.)

Apple truly did seem to have the better product, though. Their hardware and software had an "It Just Works" quality that my tech-savvy friends and I relished. If the wide-ranging ecosystem of third-party peripherals available for Windows occasionally made Mac users jealous, we remained smug with the knowledge that we our computers crashed less frequently. We gloated, sure, and were convinced that we were using better technology. Our frustrations came with Apple's corporate floundering.

CEO Gil Amelio had just been ousted by company founder Steve Jobs; Jobs would become "Interim CEO." In Boston's Macworld Expo that summer, Microsoft Chairman Bill Gates appeared, live-via-satellite, to share the stage with Jobs and announce that Microsoft would invest $150 million in Apple and commit to continuing making a version of Microsoft Office for the Mac. I was hardly alone in my antipathy for Microsoft, and to most of us in the room, the offer felt like a sneering lifeline tossed by an inexplicably dominant giant, only keeping Apple afloat to stave off ongoing antitrust investigations. The Mac faithful in the audience (and at Macworld, that was nearly everyone) booed Gates, and by proxy, Microsoft.

In the thirteen years since then, of course, Apple's stopped being a company that people make fun of. Steve Jobs' knack for taking over small niches and radically expanding them brought the company back from the brink, and his eye for creating new product categories (touchscreen phones and tablet computers, anyone?) has investors driving Apple's stock price skyward. Microsoft's offerings of late have seemed slight revisions on existing product lines, and their answers to the iPod (the Zune) and the iPhone's OS (Windows Mobile) have seemed lackluster and gone nowhere.

The 24-year-old zealot I was back in 1997, of course, would feel smugly vindicated. Apple's "Just Works" quality has continued and grown central to Jobs' vision for appliance computing. My own zealotry has given way to a more reasonable pragmatism. Windows is still ubiquitous, and today's versions are far, far better than they were in 1997. I kick myself daily, of course, that the zealot I was did not have the money to actually invest something in Apple, which would have made today's stock-heavy story pleasant on several levels.

As a small consolation, though, my parents both switched to Macs several years ago, and have, indeed, required far less tech support.

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Comments [1]

Jamie Robinson from Blue Ridge, Georgia, USA

Wow, I went just the opposite way. I used to be a Mac fanboy but I can't afford their technology these days. Although I do have an Ipod. I use Sony PC now.

Cheers

Jamie

May. 27 2010 09:01 AM

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