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Feb 01, 2017 05:35 AM EST

[In-Depth] Microsoft Lagging Behind Apple In Market Value; How iPhone Company Stays On Top

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While Microsoft is celebrating its $500 billion milestone, Apple couldn't help but be the pooper. The numbers of the Cupertino-based titan are in and they're looking mighty fine; so fine that the Redmond-based titan trails so far behind. Moreover, this recent announcement just right after the market closed made Wall Street look into Apple's fastest growing business - services.

Apple Sales vs. Microsoft Sales

Microsoft recently reached a milestone, putting its value at $510.37 billion. Although it isn't exactly the first time that Microsoft reached the $500 billion mark, it's still a feat because it struggled to do so for 17 years. The last time that Microsoft was valued that much was in March 2000 - at $550 billion.

Unfortunately, the world's biggest software company still trails behind from its biggest rival. Apple Inc market capitalization is at $642 billion, Financial Post reported. Apple also recently revealed the numbers of its holiday quarter and it is massive.

With the strong sales of its iPhone 7, Apple continues to dominate the smartphone market at $78.4 billion generated revenue - a 3.3 percent increase from last year's $75.9 billion, Quartz reported. Wall Street couldn't be any happier because the tech titan's shares shoot up to $124.50 after hours of trading.

Microsoft on the other hand, had its shares rose up to $65.64 per, which is nearly half of what Apple's got. Nevertheless, investors continue to pour in because of the software company's cloud system; an interesting concept that will make it rule out Chromebook.

What Apple Did To Stay On Top

Apple continues to the top because it's more valuable, it's growing faster, and it certainly has more firepower. The iPhone company sold more iPhones for the last three months; the most that the company has generated in a single quarter. It broke the streak of declines and increased its iPhone sales by 4 million, which is 78.29 million iPhones compared to last year.

But what really got Wall Street interested is Apple's service business. App, music, movies, games, and even insurance and cloud services got the company going by 18 percent, which is $7.2 billion compared to last year. According to Apple shareholder Jason Ware, they have been bullish on the service side of Apple's business.

The service business of Apple Inc. is the fastest growing area in the company. It also has higher margins than hardware, CNBC reported. While its iPhone sales could be lower than what investors expected, Apple still has a tight knit ecosystem, which have a loyal cult following that do not seem to plan to move out anytime soon. 

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