Apple Overtakes Google As King Of Silicon Valley
Thanks to the sleek new iPhone, Apple has now unseated Google as the most valuable company in Silicon Valley””America’s cradle of technological innovation.
Since the iPhone’s launch a year ago, people are lining up outside Apple stores everywhere to get their hands on the prized device.
The popularity of the phone has fuelled a 44% surge in Apple’s share price on Wall Street in past 12 months. By the close of trading on Wednesday, Apple’s market value had edged up to $158.8bn – a shade ahead of Google’s $157.2bn.
Apple’s success in the technological world owes much to the simplicity of their devices. The company has repeatedly been able to eclipse rivals with its distinctive, easy-to-use designs. The iMac and the iPod continue to rank among the favorites of laptop computer buyers and music fans.
Meanwhile, Google has felt the effects of America’s economic slowdown, which has eaten into online advertising. Many Investors are concerned if the company can produce solid profits from expensive ventures such as the video-sharing website YouTube.
Still, experts say Apple and Google are central to the technological landscape: “These are the two companies most currently identified with the notion of innovation – not just in Silicon Valley or in this country but arguably in the world,” said Scott Kessler, an equities analyst specializing in technology at Standard & Poor’s in New York.
School friends Steve Jobs and Steve Wozniak founded Apple in 1976, making it elderly in comparison to Google, which has only existed for 10 years.
Apple’s distinctive skill is its ability to reinvent itself with new products, which are typically kept secret until the last possible moment, experts say.
"It’s one of the few companies that has been able to internally develop a number of blockbuster products and killer applications," said Kessler.
A large portion of the Apple’s success is attributed to the personal entrepreneurial instincts of Jobs, who is chief executive and is heavily involved in product development.
Apple’s stock briefly dipped when Jobs appeared to be gaunt and thinner than usual, before the company denied rumors that he was ill.
Apple and Google differ widely in their business models, yet they do have a degree of personal overlap.
Google’s chief executive, Eric Schmidt, sits on Apple’s board as a non-executive director. Both companies are literally 5 miles apart in the San Francisco area.
Apple has shown little hesitation about boasting of its prowess in the past. When the company’s value overtook the computer maker Dell two years ago, Jobs sent out a companywide email reminding staff that Dell’s founder had once predicted Apple’s imminent demise.
"Team, it turned out that Michael Dell wasn’t perfect at predicting the future," wrote Jobs. "Stocks go up and down, and things may be different tomorrow, but I thought it was worth a moment of reflection today."
The iPhone has provided an edge in creativity and convenience for Apple. Last month, the 3G version of the phone sold a million handsets in a single weekend.
Still the global leader in online searches, Google is experiencing slowing growth in "paid clicks" – the number of times users alight on lucrative advertisements. But they say better tailored advertising has led to better quality, but less numerous, clicks.
Though Google shares have seen a bit of a drop on the stock market, the company’s founders Sergey Brin, 34, and Larry Page, 35, remain billionaires who travel the world on a customized Boeing 767.
The duo believe conquering space should be their next challenge and have put up a $20m prize to anyone who produces a privately financed spacecraft able to land on the moon.
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