For the first time in 8 years Microsoft has passed Apple in market cap. Earlier today Microsoft achieved a market cap value of $812.93 while Apple held onto 812.60 billion. The celebration was short lived as Apple retook the throne and according to The Verge have been exchanging the title of most valuable company ever since.
Microsoft CEO Satay Nadella
Microsoft’s rise in value has largely come from the change in leadership at Microsoft. Ever since former CEO Steve Ballmer gave the leadership role over to Sataya Nadella the company has made drastic turns when it comes down towards strategy. In terms of gaming Nadella has empowered the Xbox division by promoting Phil Spencer into a leader ship position in which Spencer directly answers to Nadella. While it may not seem like a big deal the change in positions has made it possible for the Xbox division to use the full potential of Microsoft.
Head of Xbox Phil Spencer
With Nadella in charge of Microsoft and Spencer answering directly to Nadella, Xbox is no longer seen as the black sheep within the company. Just a few years ago there were no shortages of rumors that Microsoft was looking to sell off the Xbox brand. Nadella put a quick stop to those rumors when he promoted Phil by removing Spencer from the watch of Terry Myers of the Windows Division. Not only was the leadership reworked, the Xbox brand too would share financial success to the point of becoming a “multi billion dollar business” for Microsoft. The gaming division’s success and Spencer’s promotion would allow for several key acquisitions by bringing in studios such as Obsidian, inExile, Compulsions, Ninja Theory, Undead Labs, and Playground. All of these acquisitions would serve the purpose of igniting the Netflix like Xbox Game Pass service.
The Xbox recent success isn’t he only change within the company. The Surface line of computers would also gain traction to the point of becoming a billion dollar business for Microsoft. While that may surprise some, the real shocker comes from Bing also becoming a billion dollar business under Nadella’s leadership. All of this may come off as daunting but having several billion dollar businesses is not uncommon for Microsoft.
One thing most financial papers note about Microsoft that other companies don’t have is that unlike the other companies Microsoft has “several eggs in its basket instead of just one.” The saying comes from the fact that unlink other companies that get their bulk of revenue from one source like Apple and their iPhone or Google and its advertising, Microsoft has several businesses that are all profitable. If one were to go down Microsoft would still have another business to make up for it.
One thing to look forward to is the prediction of Microsoft joining the ranks of Apple and becoming a trillion dollar company. Several analysts are already predicting Microsoft’s eventual transformation to a trillion dollar company. How that affects the company remains to be seen. Until then expect Microsoft and Apple to continue to clash in market value.