Why is Apple stock doing so much better than Microsft?

[I'm not a professional] Apple is doing a lot more in the consumer field right now. Along with the iPod, they are releasing the iPhone and the iTv. Along with that they have released a new MacPro computer that supports windows and apple Os. They are also about to release better macbooks and macbook pros as well. Microsoft and apple are in two different fields now. Microsoft deals more with business applications whereas apple deals more with consumer stuff. (and it seems that microsoft products always have bugs for months after the release of new stuff...) In my opinion, I don't think Vista has caught on like they expected because nothing seems to be compatible with it. However maybe you should get someone whos more of a microsoft to give you their input. Personally i use my pc at work because everything is mircosoft, but at home I'm an apple.

Stock performance isn't just about existing products, or how popular they are, it's about how successful the company is at making profits from their products, and their revenue growth, all relative to the market needs of the customers. Look at a 10-year chart of Microsoft stock and you'll see an incredible climb (with 9 splits!) that far surpasses Apple's performance.

A stock's price does not necessarily tell you how large or successful a company is. To calculate market cap (roughly the overall worth of a company) you multiply current share price X outstanding shares. Microsoft's market cap is nearly 3 times that of Apple, and since they have 10 times as many outstanding shares, MSFT's $40 stock price is enough.
http://finance.yahoo.com/q/ks?s=aapl
http://finance.yahoo.com/q/ks?s=msft

All of that said, I do think much of Apple's recent growth has come from the iPod and other product innovations. They've created impressive new markets, and new revenue streams (thus, big growth), whereas Microsoft had the market for business software pretty well saturated years ago. Since they're such a large company, they'd have to find a really big win (or a lot of smaller wins) to make a very dramatic jump.

It sounds like you ended up on some unlucky short-term trends with both stocks, because over the long-haul they've both been big successes.

Basically, it is about what buyers "think" a piece ( a share) of a company is worth. This can be based on past performance or future speculation.

Iphone, IPod Touch, Macbook Air, Leopard, Apple TV 2.0