Microsoft Becomes the Most Valuable Global Company as Slow iPhone Sales hit Apple’s Business Growth


The most recent and latest news in the tech industry has amazed everyone. Tech giant Microsoft has surpassed Apple to become the most valuable company in the US with a market capitalization of $753.3 billion.

Apple, which has become the first $1 trillion US company in August, came down to $746.8 billion on Friday, owing to lower than expected iPhone sales amid reports of its suppliers cutting the cost and overall workforce.

On the other hand, Amazon with $736.6 billion is currently at third and Alphabet with $725.5 billion is at the fourth spot.

The investors are now betting big on giant companies with robust cloud services and software services which are witnessing a great demand from big and small enterprises all across the world over for their digital voyage, at a time when giants like Facebook and Google face intense scrutiny for user’s data practices.

Microsoft stable position in the tech industry in the last few months.

Enjoying the success on its growing Azure cloud, gaming and surface laptop portfolio, Microsoft posted a revenue of $29.1 billion and net income of $8.8 billion for the first quarter of its 2018 financial results.

Microsoft has so many sources of earnings. The main sources of their income are Windows products, Microsoft Dynamic 365 Development and Office suite.

The total revenue grew up to 19 percent while net income increased by 34 percent. Operating income was around $10 billion and increased up to 29 percent.

When big high flyers like Facebook and Google are facing questions over their data prices, investors are betting big on cloud and software services which are expected to remain strong on the back of demand from companies striving to boost the productivity and efficiency.

The very last time Microsoft managed to come close to Apple’s market cap was in back in 2010. The CEO of Microsoft, Satya Nadella-led software major reported 19 percent increase in net income to $8.8 billion and 34 percent rise in revenue at $29.1 billion in the financial results for the first quarter of 2019.

The company saw revenue in intelligent cloud increase 24 percent to $8.6 billion, while revenue from its server products and Cloud services increased 28 percent, led by Azure revenue growth 76 percent. Total revenue in more personal computing was $10.7 billion and increased up to 15 percent.

In a recent interview, Satya Nadella CEO of Microsoft said “We are off to an amazing start in fiscal 2019, a result of our innovation and the trust customers are placing in us to power their digital transformation”

Why Apple is losing its leading position and current situation?

On the contrary side, slower than expected demand has reportedly led Apple to direct its top phone assemblers, Foxconn and Pegatron, to stop a planned production boost for iPhone XR, a comparatively cost-effective model that hit the shelves late last month.

The Taiwan-based company, Foxconn would produce around 100000 fewer units daily to reflect the new demand outlook.

The total estimates of iPhone XR have been cut by nearly more than 30 million shipments, according to the information shared by an Apple’s analyst.

According to him, earlier this month shipment forecast for the iPhone XR has been cut from 100 million units to 70 million units during the product lifecycle.

This has been the biggest fall for Apple that they have ever faced; especially in the sales of their flagship product – iPhone.

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