Apple overtakes Microsoft as largest tech company

Apple, the maker of iPods, iPhones and iPads, overtook Microsoft, the computer software giant, yesterday, to emerge as the world's most valuable technology company.

The development, according to analysts comes on the back of one of the most stunning turnarounds in business history for Apple, which had been written-off at one time. The rapidly rising value associated with Apple also underlines an important cultural shift: Consumer tastes are increasingly driving the shape of technology rather than the needs of business.

In terms of technology, over the last two decades Windows and Office software, have been the dominating presence for most people which reflected in stock market capitalisation. However, the smartphone's touch screen of is taking over from the click-clack of the keyboard as the primary technology interface for an increasing number of users.

Apple enjoys an additional advantage of being at the right place at the right time and though it still sells computers, twice that amount of its revenue is now coming from hand-held devices and music. The technology industry sold around 172 million smartphones last year, as against 306 million PCs, however smartphone sales grew at a pace five times faster.

As of yesterday, Wall Street valuation of Apple stood at $222.12 billion and Microsoft at $219.18 billion. With a market capitalisation of $278.64 billion Exxon is the only American company valued higher.

The companies compare favourably in terms of revenue with Microsoft at $58.4 billion and Apple at $42.9 billion. However in their most recent fiscal years, Apple posted a net income of $5.7 billion, while Microsoft earned $14.6 billion.