Apple Passes Google In Value. Is This A Changing Of The Guard?

Goog needs another hit-- or at least another revenue stream.

All the stuff they're doing is great, but let's not forget that the only (or primary) way they make money is clicking those ads.

They're an internet ad company.

Apple seems to have many more actually revenue streams.

That's my 2 cents.

One factor that I think could be very significant for Apple's future is its venture into production of its own chips. Could this mean that AAPL will be able to provide entirely unique products that subdue it competitors?

Apple is just getting started. Once the economy turns the corner, Apple will put on the afterburners and be heading after Microsoft. If the Chinese can afford iPhones and the tablet becomes a hit, there's probably no stopping Apple. But this is merely speculation and it doesn't mean a thing right now. I definitely think the more stores Apple has the more Macs are going to be sold. If Apple can turn the iPod Touch into a really good gaming machine, let the fun begin for Apple investors.

Apple is a gadget company. Gadget companies don't do particularly well unless they literally invent new products that people MUST have. Let Sony's absolute, complete - and temporary - success with the Walkman and Beta tape players be a warning to all gadget makers. Google has no (well, one) manufacturing facilities, no plants that need building, few international negotiations, no hardware R&D costs and their main product can't be reverse engineered to marginalize it in the marketplace. If I owned a mere internet ad company worth $140 billion, I'd say there were a lot more horizons to conquer. If I was a gadget company that owned whole markets, I'd be nervous as hell. Keep in mind Google's product WILL be used next week and the week after that. Once someone buys an iPod or iPhone, they may not make another purchase for years, and even then there is no guarantee they'll get another Apple product.

Over the last 10 years:

Microsoft market cap - down 14%
Google market cap - up 322%
Apple market cap - up 970%

Growth is what matters, the guard changed a long time ago.

Both Apple and Google will surpass Microsoft in the next few years, but Apple will do it much faster. if they keep adding and updating high margin products and services in markets where their share has room to grow many times over. Apple makes far more money on an iPhone than Microsoft does on the sale of a Windows PC or phone. And I know a lot of people who are upgrade iPods and iPhones annually, vs. upgrading their PC every few years. That's a lot of financial dimensions in which they are trouncing everyone else in technology.

Apple is going to have a MUCH higher cap than Microsoft by the end of the next decade.

Microsoft's problem #1 is Windows and Office have no marketshare to gain - but lots of share to lose. Microsoft doesn't seem to be able to do anything to reinvent those products. Their #2 problem is their tendency to buy into businesses, instead of growing them. Xbox, Zune, Mobile Windows, Bing, etc., all generate revenue but the cost was far (FAR!) higher to Microsoft than revenue gains by their competitors. In some cases they would have had a higher return if they had put the $$ under a mattress. Problem #3 is that many of their recent initiatives have been copy cat technology and marketing duds.

Problem #4, which may be responsible for problems #1, #2 and #3 is that there has not been any leadership renewal at the top (Ballmer I mean you) despite a decade of flat value.

Apple is eventually going to grow beyond its competitors. This is because of their goal is much larger than MS or Goog. While MS and Goog are dependent on their software for growth, apple creates its own hardware !

@PaulR - In re your comment "Google WILL be used next week, and the week after," do you remember WebCrawler? How about Lycos? AltaVista anyone? Netscape Central? Web portals have changed guard many times.

I have to point out that for the writer to think he deserves a pat on the back for his 7 day prediction for Apple to surpass Google's Market cap is laughable. If you wrote that at the time of the launch of the iPod in 2001 you might just have earned some kudos, but I doubt you did somehow.

Apple is certainly set to overtake Microsoft, it's non-GAAP accounting revenue puts them, at $42 billion, not far behind MSFT, and it is setting itself up for ongoing market share gains in all it's three legs, and a fourth quite soon as well.

Being highly profitable, having 95% market share to win, with unquestionable product design, impeccable execution, and everyone wanting the next product before there is even a whisper, is altogether an incredible position to be in.

APPL is currently 70% of the market cap of MSFT, can you predict Mr Burrows, when it will surpass it? I say before end 2012.

@ Pratik - Apple creates its own hardware? Are you sure they are not using Samsung hardware? Apple has'nt created "their own hardware" since the old Macs, that were'nt Intel powered. iPhone & iTouch are build from parts, products of other companies, and the only Apple thing in them is the software. Overpriced software. And overpriced hardware (Macs and Macbooks)
Google vs Microsoft vs Apple is not something anyone can predict. No one of us knows with what kind of product or strategy those companies will come up in 2-3 years. So no need for Apple-, Google- or MS-fanboyism...
If you like Apple products buy them, if you like Microsoft buy them... But you can't just say "woah i like the iPhone and all the Chinese love it too, so Apple is gonna top every other company" :)

This is an apples vs oranges comparison. If Apple is also in the search engine market, and Google designs and sells music, phone and computer hardware, then we might compare them. Otherwise, the discussion is irrelevant. You might as well compare Apple to GE.

Obviously, De, you don't know what you are talking about, nor have ever even looked at a Mac. Have you even seen or held a unibody MacBook Pro? And you say this Apple doesn't create its own hardware and that the only thing that differentiates their products is software?

Tell me, De. Where is the MagSafe adapter in other notebooks that are of the same hardware? Where is the tight integration between hardware and software on other PCs? Tell me, De, how long does it take your laptop to wake up from sleep?

Apple hardware = Samsung hardware. What a laugh.

John is a fanboi. I have Mac Pro, bought it because all the fanbois tell me how great Apple products are. The tower goes largely unused. It does nothing particularly better than my Windows, or Linux box. That's one reason for Apples success, the rabid cult-like following of their fans. Strange to worship an inanimate object but it certainly helps Apple out.

Both Apple and Google are great companies, and have a lot of potential. However, both have single points of failure. Google is completely reliant upon the ads in its search engine (with rest of their portfolio having negligible impact on the profits). Apple is completely reliant on the ingeniousness of its master.

It would be interesting to see what Google without search would look like and how Apple without Jobs will produce new product lines (as opposed to improvements on the existing lines they have been doing the last 18 months of Jobs' illness).

This has to be one of the most laughable pat yourself on the back moments ever. Great job man.

I think Bing is going to be a bigger thorn in Google's side than we imagine. MS is going to use its minority position to cut deals with everyone left, right and center, who will be too scared to team with Google because of anti-trust regulations.

The only reason I think Apple might overtake Google in the long-term is if Google fails. The single revenue stream is still a huge problem for Google.

What GOOG really needs is to buy PALM, and use the PRE to really compete with the iphone.

I think your all missing the point, apple managed to do this with 1/10 the customer base of google and Microsoft, and can make more money from selling less products is amazing

iPhone profits are 35% of the whole moblie phone market
while selling less handsets.

All they need is a 4th Teir in their product line that can deliver the same result as the iPhone and they are in 1st spot.

Nice work apple your a commercial inspiriation ..