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BOSTON (TheStreet) -- Only 400 miles separate San Francisco from Los Angeles, but on a day when Apple (AAPL) - Get Apple Inc. (AAPL) Report and Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report will compete for attention as each company holds an event for the unveiling of a new product, the difference between the two rivals is better measured in light years.

At the Moscone West center in San Francisco,

Apple will introduce the iCloud

streaming service at its Worldwide Developers Conference, along with an update to its iOS mobile operating system for the iPhone, iPad and iPod devices.

Steve Jobs

is confirmed to lead the presentation, even though the Apple CEO is not expected to unveil the next iteration of the iPhone as he has done in previous years.

In Los Angeles, the

E3 Electronic Entertainment Expo

won't kick off officially until Tuesday, but Microsoft will take the stage Monday to deliver its keynote presentation at the video-game industry's biggest annual showcase. The company has been tight-lipped about its presentation, unlike Apple, but rumors swirled over the weekend that Microsoft will debut its Xbox 360 subscription TV service, dubbed Xbox LIVE Diamond, along with new software titles for the Kinect motion controller.

To consumers and investors alike, the juxtaposition of the hot growth company (Apple) and the lumbering giant (Microsoft) is encapsulated perfectly today with both events set to kick off around 1 p.m. New York time. On one hand, Microsoft continues to build on a consumer device it introduced more than six years ago. On the other, Apple stays on the cutting edge of technology as it updates software for its mobile platforms and pushes into the new hot area of technology: cloud services.

"It's a good way to look at it. It's representative of how each company operates," says Herb Chen, manager of the

Huntington Growth Fund


in Columbus, Ohio. Chen counts Apple as the largest holding of the $137 million fund with a 5% weighting as of March 31.

"With Apple, it's about looking futuristic with new products and services. On the flipside, Microsoft is leveraging products they've had for a while as they try to catch up," Chen says. "In terms of both of them presenting, how they're presenting and what they're presenting, it's not surprising to me to see Apple talk about the future while Microsoft will present a product that has already been around for a couple of years."

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The future for Apple, at least at this year's WWDC meeting, is services. The iCloud product is reportedly Apple's response to streaming music services that

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have already trotted out. Apple's new service will allow users to access their digital music files on the go with their iPhone and iPad devices for an annual fee.

Being late to the party isn't new for Apple, says Michael Sansoterra, manager of the

RidgeWorth Large Cap Growth Fund

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. The $470 million fund has Apple as its largest holding with a 5.8% weighting as of March 31. Apple is also the biggest holding of the

RidgeWorth Large Cap Core Growth Fund


, which has about $390 million in total assets.

To compensate for tardiness, Apple does its best to craft something that immediately sticks with consumers, Sansoterra says. "There was nothing new about the iPod when it came out. It was another MP3 player," he notes. "But they did a good job with it and made it user-friendly enough. The iTunes Store was far more intuitive. Apple essentially provided a service around the product."

Sansoterra is particularly intrigued by the concept of iCloud, or at least what has been speculated in the media. No matter what the company actually ends up introducing to consumers, Sansoterra says Apple has further distanced itself from Microsoft by transforming from a hardware-oriented business into one with a greater emphasis on services.

"It's a new movement," Sansoterra says. "Most of the time, you've seen the cloud discussion around software companies like

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. We've never talked about hardware platforms connected to a service as ubiquitously as Apple would like to have happen."

Chen says Apple was smart in waiting to come out with iCloud until there were the right advancements in the technology. "There have been others already in that game, like Amazon and Google. So some of this is from a competitive standpoint, but the gist of it is probably more along the lines of making the point that their service is better from a service standpoint."

Microsoft, meanwhile, appears more and more reluctant to change hardware and that leaves them two steps behind. Microsoft has struggled primarily because it remains PC-centric, Sansoterra says.

"Microsoft stuck with the PC desktop for as long as they did and they've struggled with every other product," he says. "We're already into the second generation of the iPad and they're still very late to the tablet market. The longer they wait to move to these new markets, the more they've fallen behind. That tide doesn't turn quickly. Even if they hit a grand-slam home run with Windows 8 on tablet devices, there's still a slow but steady cannibalization of PCs."

One of the few bright spots for Microsoft has been its entertainment division, which has been buoyed by strong sales of the Xbox 360 console long after its May 2005 launch. Most recently, the Kinect motion controller has been a big sales catalyst, although Sansoterra argues that the device once again shows how Microsoft lags behind its competition.

"It's already too late now. People have already made their decision. They've bought the


Wii and they've bought a bunch of games," he says. "There's no particular must-have reason for the consumer to change their mind. That's why you see so much brand loyalty or hate for Apple. Once people make the decision to be an Apple person or not, there is no reason to change to or from Android or Windows."

Chen also blasts Microsoft for being late to the game more often than not. "The model of having a lot of cash, letting someone else develop a technology and then buying it doesn't work," he says. "It faults them today because the larger companies are taking the first step into new technology arenas. Their model is flawed because of that. With two other big players, they're caught behind the game."

If the difference in product launchings and innovation isn't enough to convince investors of the gaping difference between Apple and Microsoft, perhaps the share price movement is. Nearly halfway through 2011, with the

S&P 500

up only 3%, Apple shares have jumped 7%, hitting an all-time high of $364.90 in February. Microsoft shares, on the other hand, have dropped nearly 15%.

From a valuation perspective, fundamental investors still argue that if Apple's cash position of more than $40 billion is backed out, the stock trades at an appropriate price-to-earnings multiple and isn't overvalued. Microsoft, on the other hand, trades at a forward P/E of 8.7, which has enticed value investors who expect the stock to trade at a multiple closer to the market of around 18.

When comparing the two companies, Chen argues that Apple's innovative ability and strategic use of cash makes it more appealing to investors. Compare Microsoft, which most recently dropped $8.5 billion to acquire Internt communications company


, to Apple, which spent $275 million and $17 million for mobile advertising company Quattro Wireless and music streaming company, respectively.

So on days like these when there are product announcements, does it make sense to trade around these unveilings or sit on your hands if you're an investor at home?

"I'm more of a fundamentalist, so it's the latter," Chen says. "I myself enjoy these types of conferences and announcements. It gives you insight into the strategies and how a company like Apple is taking advantage of technologies. You can see how Apple is thinking ahead and staying ahead of all the other technology companies."

"That's not investing. That's trading," Sansoterra adds. "I've owned Apple and will continue to own Apple because of a pretty deep set of fundamentals, none of which will change today. There will be no incremental smoking gun that will make us change our opinion."

-- Written by Robert Holmes in Boston


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