As Apple has overtaken Microsoft as the world's most valuable technology company, JOHN HARRIS examines the dramatic turnaround in fortunes of the Cupertino-based company that was founded in a garage.

Last week’s biggest technology news was not the Aussie launch of the iPad – but that Apple had overtaken Microsoft as the world’s biggest technology company.

On Tuesday last week, Apple Inc. gained a market capitalisation $227.1 billion compared to Microsoft’s value of $226.3 billion.

This reshuffling of the sharemarket deck means that the company founded in a garage by Steve Jobs and Wozniak on April Fool’s Day 1976 is now the second largest US corporation, after oil giant Exxon.

It’s a dramatic turnaround since I visited Apple’s Cupertino headquarters at Infinity Circle 16 years ago when the company was struggling to survive in a world of beige computing.

It would be kind to say that the abortive Newton Personal Digital Assistant was the conceptual ancestor of the iPhone or that the woeful dual-boot Macintosh led to the uber-flexible iMac of today.

However it’s not technology that transformed Apple, but creativity.

Since 1994, Apple has morphed from a computer company into a personal electronics business, a point underlined in 2007 when its name changed from Apple Computer to Apple Inc.

The single biggest factor in the turnaround in Apple’s fortunes was the return of Steve Jobs in 1996 – 11 years after he was ousted by John Sculley, the “lolly water” CEO he’d recruited from Pepsi-Cola.

Wielding the title of “interim CEO”, Jobs slashed unsuccessful divisions and focused on creating four great product streams: Notebooks and desktops for home and for work.

Apple’s flagship was the all-in-one iMac, which has evolved from a colourful, chubby, cheerful-looking CRT computer into the sleek flat-screen beauty of today.

In October 2001, Apple launched the iPod, the “Walkman” of the digital age, a game-changing device that has revolutionised how music is sold.

In 2007, it followed this with the iPhone, in reality, a pocket computer that runs a huge variety of tiny programs as well as making phone calls.

This year, Apple has again delivered a breakthrough product in the iPad, which validates the electronic book, an idea that’s taken a decade to take hold.

Jobs – who during the past decade has survived pancreatic cancer and various other health issues – has a genius for uncovering genius, from engineering wiz Woz back in the 70s to Jonathan Ive, who led the iMac design team and later worked on the iPod and the iPhone.

It’s no coincidence that the company which launched the “personal” computer revolution three decades ago has reinvented itself with a family of products that puts an “I” in front of technology.

However, despite its status slip, Microsoft won’t struggle to pay the power bill next month: It still sits on US$37 billion in cash and employs 93,000 of the smartest people in the world.

Yet people remain more intrigued about what Steve Jobs will reveal next Monday when he addresses Apple’s annual World Wide Developer Conference in San Francisco.

I wonder what Bill Gates is doing that day.

John Harris is managing director of Impress Media Australia. Email jharris@impress.com.au

Twitter