Google parent Alphabet was set to pass Apple as the most valuable company in the world on Tuesday. At Monday's after-hours levels (which technically reflect an indication, but not the real-world value), Alphabet's market cap would roughly be US$570 billion (S$811.44 billion), eclipsing Apple's current market cap of about US$535 billion.
The last time Google was more valuable than Apple was in February 2010, when both companies were worth less than US$200 billion. At the time, Apple had yet to release its first iPad, the newest iPhone on the market was the 3GS, and the Mac was the company's biggest product line, accounting for one-third of revenue. Steve Jobs was still at the helm.
Google was being guided by Eric Schmidt, who would hand control back to co-founder Larry Page the following year. The company was a little more than half its current size.
Apple and Google actually flip-flopped multiple times between 2008 and early 2010, before Apple went on a historic tear, jumping from US$180 billion in value to over US$650 billion in September 2012. At that point, the two companies were separated by over US$400 billion. In 2011, Apple passed Exxon to become the world's most valuable company.
It's hard to believe that Google was the more valuable company from the time of its IPO in 2004 until April 2008. Then iPhone madness began.
Google's latest rise versus Apple began in July. From that point through the end of 2015, its shares soared 44 per cent, while Apple's sank 16 per cent.
Apple's main problem is its reliance on the iPhone, which now accounts for two-thirds of revenue. It's a massive business, but sales in the fiscal first quarter increased only 1 per cent from a year earlier, while iPad and Mac revenue dropped. Investors are concerned that unless Apple changes course and decides to compete with lower cost Android manufacturers on price, the iPhone's best days are in the past.
Meanwhile, Google is convincing investors that in the transition from Web to mobile it will maintain its dominance. According to eMarketer, Google is poised to capture 32 per cent of the mobile ad market this year and next, staying well ahead of Facebook, which is around 20 per cent. The company generates so much profit from its digital ad business that it can invest in all sorts of potential growth areas, namely autonomous driving and extending life.