Yet compared to Microsoft, Apple has both less cash on hand ($23 billion vs. $35.7 billion) and less revenue ($42.9 billion vs. $58.4 billion). (Microsoft has also paid out at least ~$40 billion in dividends, so the company's value collapse isn't quite so stark, but it has still been a rough decade). So step right up and place your bets! Rather than trying to examine the ever-changing facets of each business as a whole, let's look at something more concrete -- their products -- as a measure of where the two tech giants stand right now. Apple is positioned to capture a huge share of the growth of mobile and tablet computers in the next decade and to continue to gain share in laptops and desktops. That's why the market valued Microsoft at 35X Apple--because that scenario seemed reasonable. How do we ask (and answer) that question?
– In case you haven't heard, Apple has passed Microsoft in market value. But is it really worth more? Sure, if you're feeling lucky, writes Henry Blodget for Business Insider. Microsoft's free cash flow is roughly double Apple's, so right now they're way out of whack, but Apple is growing much faster. If you think that'll continue—and based on its current product outlook, that seems reasonable—then sure, buy some AAPL. Because "for today's market values to make sense, Apple has to catch up and pass Microsoft's cash flow within, say, 5-10 years." But 10 years ago, the fact that Microsoft was worth 35 times more than Apple seemed just as reasonable. Things changed—so much so that, as Dan Nosowitz of Fast Company points out, Apple and Microsoft might not even be competitors anymore. This is a story about very different companies; it “isn't Pepsi overcoming Coke.” Right now superior marketing has put Apple on top, but the landscape's evolving even more rapidly now. “Anything can happen," Blodget warns. "So step right up and place your bets!”