When the exchange closed Wednesday, Apple became the world's biggest technology company, surpassing Microsoft's market capitalization. For those who have observed Apple's rise, it is an impressive milestone. In the late '90s, the company was practically on life support. Now, with a slick line of computers and innovative consumer electronics, Apple's dominance seems more assured than ever. However, a company's market value can be misleading. Here are five caveats to Wednesday's screaming headline:
  • Don't Look at Apple, Look at Microsoft, writes Chris Rawson at Tuaw: "Apple's leapfrogging of Microsoft's market cap has had less to do with Apple's stock and more to do with Microsoft's; over the past 60 days or so, Apple's market cap has grown by less than US$10 billion, while Microsoft's has plummeted by almost $40 billion."
  • We're Comparing Apple(s) and Oranges, writes Dan Nosowitz at Fast Company: "This isn't Pepsi overcoming Coke. Is it simple scope defeating broad? Consumer over enterprise? A triumph of superior marketing? The power of a cult of personality? The answer is yes. Since the introduction of the iPod, Apple has captured mindshare in ways Microsoft only dreams of. Microsoft is an amorphous blob of a corporation, with a capital C--they make essential products, certainly, but without brand loyalty or public goodwill. Apple, through unbelievably astute marketing and the power of one Steve Jobs, has won all of those fights."
  • Take This With a Grain of Salt, writes Daniel Kusnetzky at ZDNet: "There are many ways to look at markets and individual companies. Each is useful to certain people at certain times and not very useful at all at other times. It’s wise to remember that market share of a market’s revenue is quite different than the market share of a market’s shipments. It’s also wise to remember that market capitalization or market value is related to, but different than market share... A company may have absolutely huge revenues, hold a dominant position in nearly every market in which it competes and still not be properly recognized by investors."
  • Here's 'One Ironic Point,' says Ed Oswald at Technologizer. "Microsoft itself could be credited with helping bring back Apple from the dead. In 1997, the company made a $150 million investment in the company shortly after Steve Jobs returned for his second and current stint as CEO."
  • Ascendant—But at What Cost? worries Nigel Kendall at the Times of London: "As a Mac user since the days of OS 7 myself, I find myself caught slightly in between two stools by the company's sudden omnipotence. Part of me is happy that the company has finally broken out of its niche to get the acclaim it deserves for its great work - not so much on products, but on interface and usability - part of me is concerned that the corporate re-invention from computer maker to consumer electronics company has taken place at the expense of the computer hardware. I'm currently in the market for a new lightweight laptop that doesn't cost the Earth and is likely to have a tough old life on the road. For the first time in over a decade, I find myself considering options other than Apple. I wonder if other people feel the same way?"