When Microsoft stock was at a record high in 1999, and its market capitalization was nearly $620 billion (roughly Rs. 38,31,445 crores), the notion that Apple Computer would ever be bigger - let alone twice as big - was laughable. Apple was teetering on bankruptcy.
And Microsoft was so dominant in personal computers, then the center of the technology universe, that the government deemed it an unlawful monopoly. This week, both Microsoft and Apple unveiled their latest earnings, and the once unthinkable became reality: Apple's market capitalization hit $683 billion (roughly Rs. 42,20,769 crores), more than double Microsoft's current value of $338 billion (roughly Rs. 20,88,755 crores).
At Apple's earnings conference call Tuesday, its chief executive, Tim Cook, called the quarter "historic" and the earnings "amazing." Noting that Apple sold more than 34,000 iPhone 6 every hour, 24 hours a day, during the quarter, he said the sheer volume of sales was "hard to comprehend." Apple earned $18 billion in the quarter - more than any company ever in a single quarter - on revenue of $75 billion (roughly Rs. 4,63,481 crores).
Its free cash flow of $30 billion (roughly Rs. 1,85,392 crores) in one quarter was more than double what IBM, another once-dominant tech company, generates in a full year, noted a senior Bernstein analyst, Toni Sacconaghi. The stock jumped more than 5 percent, even as the broader market was down. A far more subdued Satya Nadella, Microsoft's chief executive, who is trying to transform the company and reduce its dependence on the Windows operating system, referred to "challenges." Microsoft's revenue was barely one-third of Apple's, and operating income of $7.8 billion (roughly Rs. 48,202 crores) was less than a quarter of Apple's. Microsoft shares dropped over 9 percent as investors worried about its aging personal computer software market.
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