For the longest time, Apple bulls could sneer at Microsoft.

After peaking in December of 1999 at $58, Microsoft slipped to $22 a year later. Since then it's failed to break out of the $17-$36 range. It looks flat if you look at it over a ten year period.

While Microsoft's stock went sideways all it could say was, "It's the market. It's out of our hands, we can only do so much."

Microsoft's top PR man Frank Shaw built a good defense of his company. While the stock was flat, he noted Microsoft:

  • Tripled revenue from $23 billion in 2000 to $70 billion in 2011.
  • Increased profits from $9 billion in 2000 to $23 billion in 2011.
  • Returned $194 billion to shareholders via dividends and stock buyback.

Impressive numbers, but it didn't matter. Microsoft looked vulnerable to attacks from Apple and Google despite churning out impressive numbers year after years. The stock suffered because CEO Steve Ballmer failed to see the rise of mobile.

And while that was happening, Apple's stock was a rocket racing to the moon. Apple investors could look at Microsoft and laugh.

Well, the shoe is on the other foot today, as they say. Apple's defenders are throwing their hands in the air, shouting, "Apple had the fourth biggest earnings in history! What does Wall Street want?!?!"

The Street wants growth and stability. Apple's period of mega-growth is over. And real or perceived, there are threats to Apple's business right now. Samsung is selling a lot of smartphones. Amazon is clobbering Apple's margins. Google isn't going anywhere.

Apple can, and will, exist quite profitably while those companies do their thing. But, Microsoft existed quite profitably while Google and Apple did their thing. The looming threat is what held Microsoft in check.

The story can change for Apple. It doesn't have to be the next Microsoft. What really killed Microsoft was whiffing on the next big thing.

So far, Apple hasn't missed a technological revolution. If Apple rolls out a TV, an iWatch, or something else that people fall in love with, then it can avoid going sideways forever. But if Apple does miss the next big thing, then Apple will have to learn to live in annoying world Microsoft has been living in for years.

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