It was a little more than 13 years ago that BusinessWeek printed its now-infamous cover story about Apple (AAPL), then called Apple Computer, entitled The Fall of an American Icon. Beset with shrinking share and an uninspired product line, the very future of the company was increasingly in question. Apple is rapidly becoming a minor player in the computer business wrote BusinessWeek, predicting the company may be swallowed up by Sun Microsystems (JAVA) or another rival. (Meanwhile, earlier this year, Sun agreed to sell itself to Oracle (ORCL) for $7.4 billion dollars, a pittance compared to Apple s market cap of $170 billion.)

BusinessWeek, Feburary 5, 1996

Indeed, since that cover story, and the subsequent return of co-founder Steve Jobs, the company s prospects -- and stock -- have soared. Shares are up more than 2,500% since the article was published and now account for over 15% of the Nasdaq 100 stock index.

Such is the reality of a competitive, market economy, where profit-seeking innovation means that today s leaders are often tomorrow s laggards. Under capitalism, no company can rest too long on past laurels or success. From Eastman Kodak to Smith Corona, American business is littered with once-dominant companies overtaken by more productive competitors.

Yahoo (YHOO), an early tech pioneer, sported a market cap of $100 billion back in 1999, but failed to capitalize on its early lead in Internet search and was bested by Google (GOOG), despite the fact Google that was founded three years later.

Amazon (AMZN) had a smaller market capitalization than Yahoo for nearly all its life as a public company. It first overtook it in 2007 and has recently built on those gains. Apple, which was smaller than all of them back in 1998, is now much bigger than both.

Historic Market Capitalizations for Major Technology Stocks

Source: Rosewood Research, Bloomberg

What determines which companies succeed and which fail, which grow and which retrench, are the decisions made by management and the contributions of employees. What boosted Apple to an all-time high last month wasn t a government bailout or stimulus check, but actual productivity and wealth creation, readily apparent to anybody who's used Apple s state-of-the-art gadgets in recent years.

I am not a tech geek or company evangelist, but the fact that the iPhone is, quite simply, a miracle of human achievement. It s a phone, a map, a camera, an encyclopedia, and stereo, among a thousand other uses, all for a few hundred dollars upfront and a reasonable monthly fee. Consider that my family s old Apple II cost more than $1,200 back in the late 1970s, a hefty price for a machine that didn t do much beyond a rudimentary version of Lemonade Stand. The iPhone demonstrates wealth creation incarnate.

Ten years from now, it s quite likely Apple won t be the industry juggernaut it is now. At this very moment there are thousands of hungry, small firms vying to become the next Apple or Google or Microsoft (MSFT), competing not for subsidies or government handouts, but to create productive new technologies that will improve human life. Some companies will win, others will fail, but all will benefit greatly from that process even those who choose not to pay for it.

Sleepy Sony Soars With MJ

I last wrote about Sony (SNE) in September, when I remarked how this longtime laggard had finally pushed higher, turning what had been a modest loss to a healthy gain. The point was to emphasize not only the importance of patience, but of sticking with those elements of your portfolio that rally, even if it wasn t due to the original thesis one had imagined. Sony s movie subsidiary, Columbia Pictures, has scored a $100 million payday from ticket sales for the Michael Jackson film, This is It," which obviously wasn t even a factor when I originally began acquiring shares.

Wanna Be Startin Somethin

Sony Corp. (SNE) - 2 years

The stock has continued higher, notching a new yearly peak last week above $30. Considering they traded as high as $150 fewer than 10 years ago, and that it s hard to see evidence of massive herd participation, this is one trend that could easily persist for some time.

At the time of writing, Hoenig s fund held shares of Sony Corp.