Apple beats Microsoft to become biggest tech firm

SAN FRANCISCO - Apple has overtaken Microsoft to become the most valuable technology company on optimism it can keep adding customers for its iPhone, Macintosh computer and iPad.

Apple's market value was at US$222.1 billion ($334 billion) yesterday, higher than Microsoft's US$219.2 billion.

That made Apple the most valuable technology firm in the world. It's also the second-largest US stock by market value, behind oil company Exxon Mobil, valued at US$278.6 billion on the New York Stock Exchange.

Chief executive Steve Jobs last month said second-quarter profit almost doubled and sales soared 49 per cent on demand for the iPhone.

The results don't yet include the iPad, which went on sale after the close of the period for the Cupertino, California-based company.

"Apple really checks all the boxes when you look at the tech sector," said Ryan Jacob, a fund manager at Jacob internet Fund in Los Angeles, which has Apple as its top holding.

"Do they have the opportunity to gain share in their markets? What are the prospects for margins? It's hard to find a company that you can have more confidence in than Apple."

The value shift underscores the changing fortunes of two technology industry pioneers.

Microsoft, the world's largest software maker, has had mixed success expanding beyond its mainstay Windows operating system business into new markets, including mobile phones, web search and gaming consoles.

Apple, on the verge of bankruptcy when Jobs resumed leadership in 1997, has transformed itself from the maker of Macintosh personal computers into a consumer electronics trendsetter with the release of the iPod music player in 2001, the iPhone in 2007 and this year's release of the iPad tablet.

- BLOOMBERG