iPoint for Apple as it becomes world's No 1

THE firm behind such iconic devices as the iPhone, iPod and iPad has become the world's most valuable company.

Apple edged ahead of energy giant Exxon Mobil on the Wall Street stock market.

Its worth is calculated by multiplying the share price by the number of shares issued, which is known as its market capitalisation, or market cap.

By late afternoon, California-based Apple's market cap was hovering around $366 billion - about $1bn ahead of Texas-based Exxon Mobil.

The valuation marks a remarkable turnaround for a company that was teetering on the brink until chief executive Steve Jobs returned to resuscitate the enterprise he co-founded.

Apple has already left rivals in the electronics sector trailing in its wake. It overtook Bill Gates' Microsoft, the previous number two, last year.

Analysts said Apple's rise showed its products had hit the spot with consumers. Brian Marshall, an analyst with Gleacher & Co, who follows Apple, said: "Exxon obviously sells a product that people need. Apple sells a product that people want."

Exxon, which set a record three years ago for the highest quarterly earnings of any company, is seen as having limited growth prospects - its growth is driven by oil prices and the discovery of new oil.

Mr Marshall said the company was still growing, but not as quickly as Apple, which was charging ahead at the pace of a start-up firm - even though it is now 35 years old.

He predicted that Apple might reach another milestone next year, by becoming the world's largest technology company by revenue, surpassing Hewlett-Packard.

Robert Pavlik, chief market strategist at Banyan Partners, said the changing of the guard reflected the influence and power of certain industries over the US economy at different points in time.

He said: "Technology is what people understand now. At some point, it used to be the radio, before that it was trains. So I think it's sort of indicative of our society."

Apple has been on a roll with the soaring popularity of its iPad tablet computer and strong sales of the iPhone - and its growth is seen as being limited only by innovation.

Investors expect Apple to grow as long as it keeps making products that people want.

That means shareholders are betting on Apple's stock, even though it currently makes less money than Exxon.

On Tuesday, Apple's stock gained 5.9 per cent to increase to $374.01, bringing its market capitalisation to about $347bn.

Exxon Mobil's stock closed up 2.1 per cent at $71.64.

That gave the oil company a market cap of $348bn.

Its stock had been down earlier in the day, allowing Apple to take the lead.In its latest quarterly report, Apple said stronger iPhone and iPad sales had helped to more than double its net income to $7.31bn and grow revenue by 82 per cent to $28.6bn. Hewlett-Packard's revenue stands at $31.6bn.

By contrast, Exxon Mobil posted a 41 per cent increase in its second-quarter earnings to $10.68bn, the largest since it set a record of $14.8bn three years ago. Its revenue grew by 36 per cent to $125.5bn.

International companies that vie for the most valuable spot in the world include PetroChina Co, the publicly traded unit of China's biggest oil and gas company, and Petrobras, Brazil's state-controlled energy company.

Microsoft last occupied the number one spot in 1999, riding on the back of the dot-com boom.

However, it was knocked off that perch by previous leader General Electric the following year, reflecting the then importance of military and heavy equipment to the American economy.

Exxon Mobil has been number one for more than five years on the back of higher oil and gas prices.

However, the markets remain very volatile following the downgrading of the US sovereign credit rating last week.