Microsoft: So the group was even more valuable than Apple

The battle for the throne is open: Earlier this week, Microsoft replaced Apple for the first time in eight years as the most valuable company in the world, at least for a few seconds. The iPhone maker took over the title soon after, but since then, the tech world has been eagerly awaiting the top of the stock market. Is there a permanent change of guard?

Microsoft is currently worth $ 852 billion, Apple 858 billion. Head-to-head racing has two causes: Microsoft has made a strong comeback in recent years, while taking advantage of the recent Apple's economic crisis for Windows.

That's why the price of Apple is down

At the beginning of August, Apple was still at its zenith: as the first American company, the group broke the billion dollar mark. Since then, however, the stock market price has declined, in part because of supply circle reports that current iPhone models would not sell as well as hoped. Although the company has now announced that the iPhone XR is the current best-seller. Concrete figures were not mentioned. The current situation can only be foreseen in the spring, when the Group will announce its next quarterly figures.

At the same time, investors were worried about the announcement by US President Donald Trump that Apple could suffer any punitive tariffs imposed by the United States on iPhone imports from from China. The only profit could fall by $ 4 billion.

That's why Microsoft continues to grow

But Microsoft's success is not solely due to the weakening of competition. Since Satya Nadella took the helm in February 2014, the company has opened a new path. The change at the top could not be more contrasted: if the former boss Steve Ballmer was known for his noisy and sometimes convincing performances, Nadella is rather a man with a discreet and thoughtful tone, which also includes a large part of the technology behind the company. He's an amateur, not a clbadic manager like Ballmer. Successfully: Sales rose 19% to $ 29.1 billion in the latest quarterly figures, while earnings increased by one-third to $ 8.8 billion.

Nadella, however, focuses on new areas. Although the majority of the turnover is still generated with the PC's clbadic activities with the Windows sector. Here, revenues increased by 15% to $ 10.7 billion. However, the old core business represents just over a third of turnover. Because the other divisions are growing much faster: the Surface division has increased 14% to 1.2 billion thanks to the new Surface Go. The online career portal LinkedIn, acquired at the end of 2016, has increased revenues of 33%.

However, the most lucrative sector of the cloud is the engine of growth. The Azure platform, which helps companies manage their websites, applications and data, and access advanced artificial intelligence, has seen a significant increase in sales for years. The last time he rose 76%. With Azure, Microsoft is particularly competing with Amazon's Amazon Web Services (AWS) and Google's cloud services. In total, the smart cloud division grew 24 percent to $ 8.6 billion. If growth continues to be so fast, Microsoft should earn more with its cloud services than in the conventional PC division. The Office 365 desktop software also sells very well, recording a 36% increase over the last quarter.

Apple vs. Microsoft – who's racing?

Both companies pursue different strategies. Apple wins the lion's share of sales with hardware, specifically: the iPhone. The phone pours more than half of the profits into the coffers. There is also the Mac, the iPad, the Apple Watch and other devices such as AirPod and Apple TV. With the sale of equipment, high margins are possible, but they do not guarantee a steady flow of money.

Microsoft takes a completely different approach: Redmond supports software and the cloud. Nadella wants to provide the infrastructure to other companies. Office Office software is therefore also available for Apple devices. This allows lower but regular profits. With the Xbox gaming console, the cloud division, the most popular PC operating system and various office services, Microsoft is also very diverse.

The future is software

According to badysts, the smartphone market is gradually saturated, the real phone is losing its importance. The software itself occupies a central place, benefiting companies such as Google and Microsoft, which provide their services across multiple platforms. Tim Cook knows it too. The boss of Apple has been developing the service sector for several years. He wants to make more money with Apple Music or iCloud subscriptions. Next year, we will launch our own offer of films and series. However, so far, the service sector has not yet understood the importance of hardware sales.

However, it is too early for a swan song on Apple because it has to be read in some places. The group has cash reserves of more than 250 billion dollars, which allows it to invest easily in foreign companies. In addition, the current evolution of the stock market is only a snapshot, which depends primarily on the short-term expectations of investors. However, in its more than 40 years of existence, Apple has repeatedly proven that society can transform itself. Just as Microsoft did a few years ago. The fight for the summit should remain exciting in the years to come.