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Apple and Microsoft: Reversal of Fortunes

Posted by: STEVE ARNETT

Posted on: May 27, 2010

Guess who is now the largest technology company by market capitalization? It used to be Microsoft, but Apple now claims that mantle. At the close of the market yesterday (5/26/10), Apple sported a market capitalization of $221.1 billion versus Microsoft’s $210.3 billion. To put this in perspective, at the end of 12/31/99 Apple's and Microsoft's respective market capitalizations were $5 billion and $231 billion.  

During this period, a real reversal of fortunes occurred for the stockholders of each company. A $10,000 investment in Apple on 1/1/00 would be worth $101,576 as of 4/30/10, representing an annualized return of 25.15%. On the other hand, the same investment in Microsoft would have declined in value to $6,438, representing an annualized return of <4.17%>.

Apple introduced the first-generation iPod on October 23, 2001, with the slogan "1000 songs in your pocket". They have revolutionized the delivery of computing by taking it from your desktop to your hand.

The times are a changin’