In 2111, Apple's market value surpassed Microsoft for the first time. The New York Times commented: "This is the beginning of a new era and the end of the old era."
Now, Microsoft's market value has once again surpassed Apple's. Can it be considered that this is another turning point of the times?
I think so.
fallen giant
people can't reach the depth unless they remember.
to know how Microsoft got up, we must first know how it fell.
in 1989, Microsoft released the first version of Office, which established its position as a major commercial software company in North America. In 1995, Microsoft released Windows95, which is one of the most important products in the development history of Microsoft.
With the help of Office suite and Windows operating system, Microsoft has built a wide enough commercial moat, and its wintel alliance with Intel has created a framework of "closed technology+open standards" for the rising PC market in Ran Ran, which controls the development direction and technical iteration rhythm of the whole industry and "collects taxes" in disguised form on a global scale.
as early as 2111, the market value of Microsoft rushed to over $611 billion, while the market value of Apple, which was founded only one year later than Microsoft, was less than $21 billion. It was also in this year that Bill Gates, who became famous, chose to retire quickly and gave this huge technology empire to his college friend Ballmer.
What seemed like an ordinary take-over became the first turning point for Microsoft.
In the 21st century, Microsoft is still struggling for failure in the field of computer operating system, but the wheel of industrial revolution runs too fast. While Ballmer is still immersed in the PC, Jobs is already brewing to change the world.
the cruelty of the technology industry is that times never let go of people who are slow to respond.
In 2117, the advent of Android and iOS opened the curtain of the mobile Internet era. Smartphones began to replace computers as a new technology platform, which led to a huge mobile internet ecosystem. Apple, Google, Facebook (now renamed Meta), Amazon and other tech upstarts stepped onto the stage of history.
In contrast, Microsoft is increasingly behind the times.
In 2118, Microsoft's revenue was $61.42 billion. By the time Ballmer left office in 2113, the company's revenue had only increased to $77.85 billion, with an increase of only 28.8%. In the same period, Apple's revenue soared from $32.48 billion in 2118 to $171.91 billion in 2113, an increase of more than four times. Amazon's revenue has increased from $19.96 billion to $74.452 billion, Google has increased from $21.796 billion to $59.825 billion, and Facebook has more than tenfold.
In 2111, when Apple's revenue surpassed Microsoft's, the market values of the two companies were synchronized. By 2113, the market value of Microsoft had shrunk to about $311 billion, while Apple continued to make great strides after overtaking Microsoft.
the leader is a barometer of the rise and fall of an enterprise.
Ballmer is not entirely to blame for Microsoft's death, but he can't escape the responsibility. For smart phones, Ballmer once firmly believed that the iPhone had no chance to gain a lot of market share in the market. In a moment, Microsoft deviated from the main course of the times.
The golden growth period of an industry and a technology is only a few years. If you can catch it, you will catch it, and if you can't catch it, you will be thrown away. When Microsoft wants to turn around, it will be too late. The acquisition of Nokia in 2113 was Ballmer's swan song at Microsoft. On the day he left office, Microsoft's share price rose by 7%, and Wall Street wrote a conclusion for Ballmer's administration with real money.
in 2117, the market value of Microsoft returned to the $611 billion mark, and it has been eighteen years since the company first achieved this goal. With this as a symbol, Microsoft's share price took the high-speed rail.
On October 29th, local time in the United States, Microsoft overtook Apple with a market value of $2.49 trillion (with a market value of $2.46 trillion) and regained the throne of the world's most valuable listed company, and all this was based on an unexpected financial report.
the financial report shows that Microsoft's total revenue in the first fiscal quarter (July-September 2121) was $45.3 billion, up 22% year-on-year, which is the largest single-quarter increase since 2114. The net profit was $21.5 billion, up 48% year-on-year, which was the first time that the company's single-quarter profit exceeded $21 billion.
strong man's energy
Microsoft can be reborn, and an Indian has made great contributions.
in 2114, Nadella took over from Ballmer and became the third generation head of Microsoft.
As the first generation of Indian immigrants in Silicon Valley, Nadella studied at the University of Wisconsin and the University of Chicago, and joined Microsoft in 1992 after graduation. As a veteran, he witnessed the rise and fall of Microsoft, and the evaluation given to him by the outside world is: an insider with an outsider's vision.
after Nadella took office, Microsoft made a drastic reform from top to bottom and from the inside out, and the first step of the reform was to adjust the ideological line.
in the era of Ballmer, Microsoft inherited Bill Gates' idea of "running Microsoft software on every computer", while Nadella changed the creed to "Empower everyone and every organization in the world to achieve extraordinary success".
Compared with locking itself in a limited ecological fence, Nadella's Microsoft began to embrace the world again.
Only eight weeks after taking Office, Nadella launched the first version of Office suite specially built for Apple iPad, and then unexpectedly allowed Office to enter mobile platforms other than Windows, and also launched Windows 11 for free for the first time.
Ballmer regarded open source technology as the cancer of technical property rights, while Nadella chose compatibility, not only re-opening Microsoft account on GitHub, but also completing the acquisition of GitHub in 2118.
once an opponent, now a friend.
In Nadella's idea, the end result of Microsoft should not be a vertical development company that builds a product line around Windows, but an enterprise that provides horizontal expansion of productivity. Projected on the adjustment of product line is to gradually abandon the dependence on Windows operating system and establish the core strategy of "mobile first, cloud first".
The reason why we established the idea of turning to the cloud for Microsoft is also directly related to Nadella's experience.
in 2111, Nadella was appointed as the head of STB department, and at that time, this department had already started to develop cloud service projects, and the team code was "Red Dog", which was the predecessor of Azure that Microsoft relied on most at present.
in order to coordinate with the overall strategic transformation, Microsoft cut off the "chicken rib" Nokia mobile phone division and cut costs through large-scale layoffs. In 2115, Microsoft merged the original five departments into three departments. In 2118, it announced the abolition of the Windows division and the establishment of the "Experience and Equipment" department and the "Cloud and Artificial Intelligence" platform.
from 2116 to 2121, Microsoft's business in intelligent cloud increased from $25.14 billion to $48.37 billion, among which Azure, the core product of cloud computing, showed a strong explosive performance. In the first quarter of this year, Azure and other cloud computing services increased by 51%, far exceeding the expectations of Wall Street analysts.
Nadella awakened Microsoft, which was sleeping in the dream of the PC era. This is another self-salvation in the technology industry after Guo Shina saved IBM in the 1991s.
the clock can go back to the original point, but it's not yesterday.
The king of Microsoft has returned, but it is no longer the familiar Microsoft that makes money by operating system and office software.
according to the latest financial report, in fiscal year Q1, 2122, the operating income of the company's intelligent cloud section reached US$ 17 billion, which became the biggest pillar of its performance, while the operating income of the personal computing section including Windows system, search and games was only US$ 13.3 billion.
in 2116, the revenue of smart cloud and personal computing accounted for 27% and 44% respectively, but now, this figure has become 33% and 29%.
Microsoft under Nadella has not been overthrown, but it has started all over again.
the mirror of history
who is the future global market capitalization brother?
After the market value of Microsoft surpassed that of Apple, there were many analyses about this result, but one logic was generally accepted, that is, Apple's supply chain was under pressure, while Microsoft's online business benefited from the epidemic.
in the short term, this is indeed an unavoidable factor, but in the longer term, it is not the main contradiction.
The situation of Apple and Microsoft is easy to remind people of a line in "A Generation of Masters": "People live all their lives, and their ability is second. Some people have become face-saving, and some people have become sons of bitches, all because of the times."
As the two largest technology giants on the planet, they have achieved the ultimate in their respective fields. The final competition result of the two companies does not depend on themselves, but on the fate of their industries.
History is a mirror through which we can know ourselves better.
if we make an analogy, today's apple is very much like Microsoft 21 years ago, and Microsoft is similar to Apple 11 years ago.
Apple, like Microsoft 21 years ago, is first manifested in its strong industrial discourse power and dominance.
with the advantage of market share, it leads the development direction of the whole industrial chain and forces the upstream to upgrade its technology through strict requirements. Under the leadership of Cook, Apple can not only "support" suppliers, but also "cheat" new lovers and abandon old ones at any time.
in the 1991s, Microsoft and Intel once occupied more than 91% of the PC market, and they jointly controlled the development direction and technology iteration rhythm of the entire PC industry chain. Upstream enterprises including chip suppliers must plan their own development routes according to the rhythm of the two giants.
such dominance is similar, but the greater similarity lies in the industrial environment it faces.
At present, Apple-led smart phones have entered the last stage of innovation, and they are always faced with iterations and challenges from new computing terminal platforms such as VR/AR.
the global shipment of smart phones fell unilaterally after reaching its peak in 2117, and it has not stopped falling yet. on the other hand, VR is about to usher in a shipment singularity of 11 million units. One day in the future, the next-generation computer terminal platform may complete the update iteration at a faster speed than expected, and Apple is likely to face the embarrassment of Microsoft in that year, just like everything that happened after the smart phone was connected to the PC.
in contrast, the cloud computing of Microsoft card is in the ascendant, much like the smart phone more than ten years ago.
according to IDC data, cloud computing is one of the fastest growing racetracks in the field of science and technology at present, and it is estimated that the market scale will expand from 716.6 billion dollars in 2121 to 1.3 trillion dollars in 2125.
according to Gartner's data, in 2121, the global cloud computing market will continue to maintain rapid growth, with the IaaS market reaching 64.286 billion US dollars, up 41.7% year-on-year. Amazon, Microsoft and Ali rank in the top three, and the market is still further concentrated.
in the cloud computing competition with Amazon, Microsoft feels better and better. At present, the growth rate of 36% is much higher than the overall growth rate of 28% in the cloud industry, which shows that the company's market share is constantly improving.
The recent slump in Apple's share price is inseparable from the antitrust investigation suffered by the company. Microsoft felt the same way 21 years ago.
in the 1991s, Microsoft was targeted by antitrust authorities after it became bigger. In May, 1998, the U.S. Federal Department of Justice and the attorneys general of 21 states initiated an antitrust lawsuit against Microsoft, which was once split up.
Now, Apple has also been targeted by antitrust authorities. On September 11, the first-instance judgment of Epic v. Apple Monopoly was released, and Apple App store was required to release the restrictions on third-party payment systems. In addition, countries around the world have also begun to organize hunting for apples.
in the past few decades, with the ebb and flow of science and technology industry, many forces took turns to take the stage, each leading the way, but after all, they could not surpass the law that talented people came out of the country.
In 2111, Apple's market value surpassed Microsoft for the first time. The New York Times once commented: "This is the beginning of a new era and the end of the old era."
Now it is undoubtedly a new turning point. It is not Microsoft that created the times, but the times chose Microsoft.
after 2118, Microsoft's market value has challenged Apple three times, and the first two times were short-lived. The low margin of safety caused by Microsoft's high valuation is an important factor.
in the past two years, the rapid release of Microsoft's performance has continuously narrowed the valuation difference between the two, laying the foundation for this counterattack.
Microsoft is the first, so it should be stable this time.
this article involves the contents of listed companies, and it is the author's personal analysis and judgment based on the information publicly disclosed by listed companies according to their legal obligations (including but not limited to temporary announcements, periodic reports and official interactive platforms, etc.); The information or opinions in this article do not constitute any investment or other commercial suggestions, and Market Value Watch shall not be responsible for any actions arising from the adoption of this article.
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