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	Nome and Paul Van Middlesworth - owners - The Computer Factory Who’s Winning? This month, for the first time ever, Apple is worth more than Microsoft. The measure of value (market capitalization) is simply the value of all the stockholders equity in each corporation. Last Friday Microsoft was worth $226 billion, Apple was worth $234 billion. While Microsoft’s sales are still higher than Apple’s, Apple is more profitable. Stockholders like that. Before the Apple computer “Fanboys” start strutting and crowing “we told you so,” it is important to note that Apple’s ascendancy has nothing to do with its sales of PCs and operating systems. Apple has been stuck at single digit penetration in the personal computer business for twenty years and this year fell to fifth place among “name brand” computer sellers. While Apple has become a small time player in the computer business, its efforts in other areas have met with great success. While Apple has been enjoying a solid string of wins with iTunes, iPods and iPhones, Microsoft has fumbled with Vista, Windows Mobile for smart phones and Zune. Perhaps the idea that Microsoft and Apple were ever really competitors was a product of paranoia in their respective marketing organizations. In the arena of PCs and operating systems, it has been no contest for decades, and where Apple and Microsoft have crossed paths in areas like smart phones and music, Microsoft hasn’t even come close. For Microsoft the future looks iffy. Microsoft knows it can’t continue to “Cash Cow” its dominance in PC operating systems and office suites indefinitely. It must find a way to ramp up its participation in emerging technologies. To date, however, its efforts resemble the thrashing of a great beached whale. Microsoft seems to be hobbled by its enormous size and internal bureaucracy and unable to creatively adapt to the changing environment. Today Apple should be the least of Microsoft’s worries. Microsoft is losing the browser war to Firefox and Google Chrome. Five years ago 90% of WWW users used Internet Explorer, today it is less than 60%. Yahoo and Google search engines and Email servers compete with Microsoft’s MSN, Hotmail and Bing. Smart phone operating systems (Android, Blackberry 6.5 and WebOS) threaten to replace the Windows OS in PCs. These new operating systems will bring their libraries of applications including office suites to compete with Microsoft’s Office. Apple is beginning to have its problems and may also be running out of steam. Apple managed to make it appear that their iPad was a roaring success by selling out in the first few days. Just wait, when all the Apple “fanboy’s” finally get their iPads, the iPad fad may well go the way of mood rings. Apple’s iPhone captured nearly 90% of the “smart phone” market in early 2009 but today the iPhone OS is regarded as the most primitive. Googles Android (Droid) passed iPhones in activations last month. “Iphonies” are switching in droves as their AT&T cell phone contracts expire. High tech consumer products companies come and go. Microsoft and Apple have been with us for over a generation. Both are beginning to look a bit long in the tooth to us.