It’s hard to believe that 12 years after Microsoft bailed out Apple to the tune of $150 million, that Apple would now be worth $100 billion more than Microsoft.
TechCrunch Monday posted the news that at the close of trading, the market capitalization (stock price multiplied by all the shares in the marketplace) of Apple was $330 billion – more than $100 billion more than Microsoft’s $228 billion.
In 1997, Apple was drifting. It’s iMac was a hit and it’s G3 chips were powerful CPUs, but it’s operating system was badly in need of an overhaul. The classic Mac OS was overdue for replacement and in-house and third party options (Be OS) were dismissed. Microsoft invested in Apple to keep the company going and Steve Jobs returned as CEO (just in time) with his NeXT Step operating system – what Apple patterned it’s insanely successful OS X on. The reliability of Unix with the look and ease of Macintosh.
You add the success of the Macbook line, the new iMac, iPod, iPhone and iPad, and it’s easy to see why Apple has surged ahead.
Although crass and caustic, Marc Andreesen was right when he called Windows a “poorly debugged set of device drivers.” Anyone who ran Windows in the 90s (3.11, Win. 95, Win 98) knows that is exactly what the experience of using a Wintel machine was like. Especially when you consider that Windows was a program that ran on top of DOS and was less of an operating system than an operating system emulator. DOS and Windows used technical tricks to make the computer think that all of Windows and the programs that ran on top of it fit into 640 kiloBytes. DOS and Windows would not operate the computer without device drivers (programs that ran the CD-ROM drive, sound and video cards, etc. Often those were provided by the companies that made the components – and were usually poorly debugged.
Apple had its missteps, but designed the hardware and software to work closely together as a matched pair. Microsoft’s job was tougher because it had to deal with dozens of computer makers and hundreds of peripheral providers.
Apple changed it’s company focus away from software to hardware and consumer electronics with the same passion that they designed the original Mac. (It had to just work – and it had to be “insanely great.”) Apple only got into content with iTunes (music and video.)
Microsoft has tried to be the everything company. Software, OSs, some hardware, online networks, cable TV channels. Now it is playing catch-up. But don’t count them out. Catch-up is a game Microsoft plays very well.