Cost cutting came in all businesses across the US during that time frame, that is nothing new. Anheuser cut thousands upon thousands of jobs and have yet to break the gains found prior to recession, same with the Auto industry, Ford cut cost, put out better product and they started making money again... same can be said for MS.
No, not all. Apple didn't.
In reality, they never been the same in investors eyes since the Nasdaq crash no matter what market share they hold. They simply are not the monster they used to be and that will only get worse over time.
It took 30 years to achieve. It doens't go away overnight.
There is competition now because there is nothing out there that is innovative. Everybody is doing the same old thing and making money. MS can be copied and copied again and their competitor makes money.
Interesting little article in Fortune about them:
Why investors value Apple more than Microsoft
Posted by Adam Lashinsky, Sr. Editor at Large
June 15, 2010 8:29 AM
Ever since Apple (AAPL) passed Microsoft (MSFT) in market value, I've been thinking about the vast disparity in their profits. The two companies have similar valuations ($231 billion for Apple, $223 billion for Microsoft), yet Microsoft is far more profitable. In the last 12 months Microsoft has made more than $17 billion. Apple's profits are a bit under $11 billion.
Think about that for a moment. Investors are willing to pay more for a dollar of profits at Apple than at Microsoft, and not a little more. A lot more. Obviously, the market values Apple for its growth. But that's only part of the explanation. Microsoft is growing too, yet investors value Apple at more than 16 times its forecasted 2011 earnings, while Microsoft fetches just 11 times next year's projected profits. (Microsoft's revenues are bigger than Apple's too, but not by as wide a margin, $59.5 billion versus $51.1 billion.)
The explanations are positive and negative, and neither works in Microsoft's favor. On the negative side, investors have put Microsoft in the penalty box for its fumbles. It loses billions chasing Google (GOOG) in online search advertising. It is nowhere on mobile software, despite having been first to the game. By years. Had Windows 7 been as bad as Vista, the story could have been even worse.
The real story, though, is the premium investors are willing to pay for Apple's innovation. The company has transformed itself from a niche also-ran in personal computers to the technology industry's innovation leader bar none. Apple re-defined multiple industries in the past decade and doesn't appear to be slowing down. Music distribution, portable music players, telephones, handheld computers. Investors wonder what's next. Televisions? Stereos? Automobiles?
The pendulum swings, of course. There was a time when only true fans raved about Apple, and Wall Street tut-tutted its limited appeal. Today, everyone loves Apple. But investors show their love in a particularly numerate way. The innovation premium doesn't lie. In the case of Apple versus Microsoft, it is stunning.