Unless you have been living under a rock in an extremely remote area with no Internet, the names Microsoft and Apple are part of your everyday world. Both are huge tech giants that continually develop new software and electronics for both consumers and business. Throughout the years, these two companies have battled and morphed as technology advanced.
Microsoft, which was founded in 1975 by Bill Gates and Paul Allen, began as a small start up with a big vision. Their goal was for every individual person to have a computer of their own, something that was initially limited to the elite. Working with IBM, they created the MS-DOS operating system in 1980, but soon developed Windows Operating System in 1985, which was much more user friendly for the average consumer.
Around the same time, Steve Wozniak and Steve Jobs, who were high school friends, got together to generate
the first Apple I Computer in 1976. By 1980, the Apple II and Apple III had been released, but IBM and Microsoft already had a leg up and Apple had to formulate a plan to compete. So, they began working with Macintosh and creating software in an attempt to challenge IBM.
In 1985, John Sculley – Apple CEO, who butted heads with and caused the resignation of Steve Jobs (returning in 1996), was in a controversy with Bill Gates over the release of Windows 1.0, saying the Windows technology copied the Mac graphical user interface (GUI), the use of interacting with the computer using visual icons. Gates eventually agreed to sign off on using the Mac GUI for Windows 1.0, but nothing in the agreement referred to future use of the technology.
Ironically, it was Xerox who came up with the technology so in all actuality…they were both copying.
Basically, what it comes down to is that the two companies have been in competition from the very beginning and guess what? They still are!
Fast forward to 2011. Steve Jobs, who had been battling cancer since 2004, lost the fight. It was a very sad day for family, friends, and anyone who had followed his life work. He was a shrewd and highly creative businessman and with his absence, Apple has never been quite the same.
Stock Returns – Microsoft vs Apple
In the most recent quarterly earnings results, the chart below shows that in the last 4 years, Microsoft stock has outperformed Apple stock. Both companies have plenty of cash on hand with equity coming out of their ears, so it’s all in the interpretation.
Even though financial data can be measured in a multitude of ways, the chart seems to show the impact of Steve Jobs on Apple. Does this mean Apple is in trouble? Time will tell, but more than likely Apple will find a way to step up their game. But hey, no one stays on top forever.