Coming as a surprise to even the most ardent Apple fans and supporters, on May 26, 2010, Apple officially became a higher valued company than Microsoft. At the close of the day, Wall Street had valued Apple at 0 billion, verse a valuation of 9 billion for Microsoft. While Microsoft does have much stronger revenues ( billion vs. just shy of billion for Apple), this only makes the closing numbers even more interesting. Much of the value placed on stocks hinges on how the company is expected to perform in the future, clearly the feeling on Wall Street is that Apple will enjoy a brighter future than that of Microsoft. Obviously, this news is of great interest to Internet Marketing and Search Engine Optimization specialists, as the shift may create new opportunities and introduce different methods and strategies to their processes. However, in this article we will examine how Apple overcame Microsoft, and what it will take for them to remain in the lead.

After surpassing Microsoft, Apple has now become the second most valuable company in the western hemisphere, behind only Exxon (8 billion). Obviously this growth on behalf of Apple has much to do with the success of its hardware, as its computers, phones and devices have become household objects and must own products for people across the globe. However, they also have some very profitable software suites their loyal customers can be counted on to keep moving off store shelves. Despite this software success, they have not been able to make much of a dent in the Operating System wars, as their install base has remained relatively flat over the last few years. While they make money from software, they are making history with their hardware.

Microsoft can almost be viewed as a polar opposite of Apple. Making most of their money off software, Microsoft has long supplied the vast majority of Operating Systems to the computers of the world. They also enjoy huge sales from their Office products and many other software suites. Where Apple has seen limited success with software, Microsoft has suffered the same fate with their hardware experiments. Their game consoles are constantly losing them cash (though they make up for this with profitable game software), and their hardware such as the Zune and their tablet computers have failed to catch on in the marketplace. Additionally, they have made some poor investments (purchasing tragically underperforming game developer Rare for a staggering 5 million), and are hit with multiple hundreds of millions of dollars in fines and legal fees every year. Still, none of this has stopped them from being the second most successful business in the country, until now.

Apple has earned their lead through constant innovation, both with product designs and functionality. When the iPod launched, there were already dozens of other mp3 player solutions on the market. Apple’s product became the standard due to its clever design, large capacity and the support of the iTunes platform. The iPhone has earned its popularity on the strength of its design, functionality and support of the app store. The common thread in these two success stories is the supportive environment Apple launches its products into, and the constant tweaking and improving these products receive. If Apple can continue to put out quality products, back them with impeccable infrastructure and keep a steady stream of upgraded versions available to its customers, there is no reason their dominance should end anytime soon. They do have to be on the lookout for a few things, however.

First, you can never count Microsoft out. The folks at Redmond could, any day, surprise the world with a new product announcement. Also, while their hardware offerings have been less than stellar thus far, this does not mean that the trend will continue in the future. They got where they are by being aware of their competition, and outdoing them. In short, they will not take this lying down. Secondly, Apple must be careful to not alienate its customers. Many Apple buyers are hit with intense waves of buyer’s remorse when a purchased product receives an upgrade shortly after they acquire it, leaving them with a brand new, yet outdated piece of hardware. Even as the iPad was in the pre-release stage, its noticeable lack of features showed consumers that Apple was no longer truly innovating, but holding back features strictly to roll them out in future product iterations. Finally, there is the possibility that, in trying to conquer all types of media (TV, music, hardware, computers, devices, etc) they will spread themselves too thin. A similar situation was already seen with their Apple TV line which, when it did not launch to an enthusiastic reception, seemed to drop down on their priority list, leaving customers disappointed at the lack of follow through their device received. With that said, as long as Apple can keep a solid perspective, remain alert and stay the innovation course they have ridden to this point, there is no reason why their lead over Microsoft cannot continue well into the future.

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