Thursday , April 22 2021

Microsoft exceeds Apple's market value for the first time in eight years

Microsoft topped Apple in market capitalization for the first time in eight years. With a market value of $ 753.3 billion, the software giant based in Redmond is now the most valuable company in the United States. Apple's market value was $ 746.8 billion on Friday, while Amazon and Alphabet were third and fourth respectively.

By August, Apple had become the first company in the world to reach a market value of $ 1 trillion. However, the company's market value has dropped about 25% since then, with Apple reporting that iPhone shipments have remained stable year after year. In addition, reports from vendors that reduce the workforce also had a negative impact on Apple's value.

Microsoft leveraging the growth of Azure Cloud

The cloud is one of the driving forces behind the steady growth that Microsoft has been seeing for some time. According to financial results for the first quarter of 2019, revenue growth in Azure services was impressive at 76%, while total Intelligent Cloud revenue was $ 8.6 billion, up 24%.

However, Microsoft's revenue growth numbers do not just depend on Azure and related cloud services. The company's gaming and personal computing portfolios have also witnessed good growth rates. Xbox software saw revenue grow 44%, services grew 36% and Surface's portfolio grew 14% in revenue. Overall, Microsoft revenue grew 19 percent and net income grew 34 percent. Operating income reached $ 10 billion after a 29% growth.

Microsoft's Personal Computer revenue increased by $ 10.7 billion, thanks to a 15% increase. In addition, the Indian PC market grew more than 20% thanks to strong growth in consumer and business segments. Manufacturers of PCs such as HP, Dell and Lenovo posted healthy growth rates with an IDC report noting that we could see a redesign in these companies' portfolio with new launches in the mid-to-premium segment. Overall, the signals to the Indian PC market look healthy, which should be good news for Microsoft.

Hard days ahead for the iPhone?

The iPhone may still be one of the most successful product lines in the technology industry, but the forecast does not look too bright. Apple had to cancel a planned increase in production of the iPhone XR due to lower-than-expected demand. More recently, Japanese operators would have asked Apple to cut iPhone XR prices to boost sales. In addition, Apple also had to restart production of the iPhone X due to weak sales of the iPhone XS in order to meet contractual obligations with Samsung to its OLED panels.

An Apple analyst, Ming Chi-Kuo, had recently stated that there was a 30 percent reduction in the iPhone XR forecast, which could be a little worrisome for Apple. It is worth noting that the iPhone XR is the most "affordable" iPhone released this year, with a starting price of $ 750. However, with Apple struggling to meet market expectations, it remains to be seen if this is just a speck on the radar or signal of a radical change in consumer expectations.

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