...this one is gonna be fun.
Ps - where have the hater/boi icons gone?
Let historians note that on Friday, June 3, 2011, Apple surpassed the market capitalization of Microsoft and Intel combined. This milestone comes to us courtesy of MacDailyNews, which notes that as of the close of Friday's markets, Microsoft's market cap was $201.59bn and Intel's was $115.21bn, putting the combined value of …
"Not really much to see, Apple's profits are still below Microsoft's alone..."
Not in the most recent quarter - http://www.businessinsider.com/chart-of-the-day-net-income-apple-vs-microsoft-2011-4
Something that reporters could take heed from the story on the above link says:
"When Steve Jobs announced that investment on stage a big Apple event, he said, "We have to let go of this notion that for Apple to win Microsoft has to lose."
It was a prophetic statement, as is evident in the chart below. Microsoft's profits aren't collapsing as Apple's rise. Microsoft's last quarter was one of its best."
"Pick your definition of market share to move your choice of OS into the lead."
If I pick "embedded devices", then Linux leads. If I pick "desktops," then Windows leads. if I pick "music players," then Apple leads. This article isn't talking about demographics at all, but number of dollars made.
But as to your point - Windows fanboys tend to scoff at embedded devices as "not really computers," which is probably why Windows has only a tiny sliver of that market. And Apple fanboys don't like to talk about it, because they're not really sure what OS anything has unless it's stamped with a big picture of an apple...
Go away back to your basement and don't darken our door again. This is about MARKET CAPITALISATION, not market share.
It's about what some jumped up stockbrokers thinks each is worth as a WHOLE - most stockbrokers know their iPhone runs Linux and Microsoft because it connects to their email and all smartphones run Linux, even the Apple ones, don't they?
Apple has BRAND VALUE far in excess of Intel and Microsoft, boosting the stock price. Linux has even less brand value than Microsoft.
As an aside, if you want to properly compare, Red Hat has a Market Capitalisation of 8.13bn. Do your own research to find ALL the Linux distributors listed on an approved exchange to get the total Cap for Linux.
To be fair to all those pundits who predicted Apple's death, the predictions were based on the assumption that Apple were competing with MS on the desktop.
Although I believe Apple have increased revenue (& market share ?) on the desktop, they're main money/growth areas have come from products that didn't exist at the time: iPod, iPhone & iPad.
Apple's growth has come from finding and exploiting new markets.
How many new markets has MS discovered and exploited in the same time ?
The following will be a mixture of discovery and exploitation, heavily weighted towards exploitation particularly through borg-ing smaller companies who discovered the tech.
*cough* Xbox, kinect, surface, the first (admittedly poorly performing) tablets, AJAX, LDAP, charging for DLC *cough*
TL;DR MS still exploits many new tech trends, just as most tech companies do. I just wish surface would hit mainstream instead of being a super expensive corporate toy.
Where pundits got it wrong was assuming Apple were competing with Microsoft, or competing for platform market share. That's only really in the mind of fanbois on either side. Apple and Microsoft are in different (but related) markets. Apple is primarily a hardware company, Microsoft is primarily a software company.
Apple's focus is on making good quality hardware, providing a good user experience and making a good profit. Giving Mac OS X or iOS a large share of the OS market may be a step on the way to achieving those goals but isn't a goal in its own right.
That's why Apple are relaxed about you installing Linux or Windows on your Mac (you've bought their hardware) but are dead set against you installing Mac OS on other hardware (they don't care about software market share, they do care very much about being able to differentiate their hardware offerings from the competition). Also, what's the point of having 90% of the market but making 5% at most of the profit? "We're making a loss on each unit, but at least we're making it up in volume". I think not. Much better to have 5% of the market and 90% of the profit, surely?
Apple's competitors 10 years ago weren't Microsoft or Intel but were PC manufacturers like Dell and HP and Lenovo and Sony. 5 years ago it wasn't Microsoft but mobile phone and MP3 player and portable games console vendors. Now Apple's focus has shifted again and they're into digital goods and advertising and their main competitors are Google and Amazon, but again, Microsoft is a relatively minor competitor.
Apple's hardware are devices they think that will best run their software. Device is just a platform to run their software. Even Sony can't understand why people chose ipod instead of their excellent audio quality devices/phones. Ipod=hardware that runs Apple ipod software. Even the dumbest ones were chosen because of software while others were playing "video on 0.5 inch screen" tricks.
Funny is people forget what exactly SJobs bring to Apple in addition to cool product announcements.
It was NeXT OS and the vision/style coming with it, multiplatform and scalability.
And yet, Google, ultra modern company almost made mistake of making Chrome x86 only with stupid old school asm trickery and Mozilla almost followed it. They should both thank to Android plans.
Theres a bubble in some IT stocks at the moment. I'm not sure Apples share price is an accurate reflection of it turnover/profit compared to Intel/Microsoft who have a very solid business in comparison. Alot of that price is in the image not the reality.
Apples recent success has been through being first to market with a decent smartphone OS and the tablet form factor which is probably still a bit expensive to be a truly mass market device. So its not comparing like with like - compare Apples desktop OS revenues, or its Office productivity sales with Microsofts, or its chip manufacturing business with Intels and theres not much to gloat about?
But yeah - they are much better at designing and marketing consumer devices than pretty much anyone else at the moment but thats never been Microsoft or Intels core competency.
And are you sure Linux isn't number 2 in the market if you count Android and all the other devices with some variant?
The financial markets have a measure called the price/earnings ratio (see http://en.wikipedia.org/wiki/Price-Earnings_Ratio). You get a bubble when a company is over valued (a PE ratio of 25 or more). Apple's PE is somewhere around the 14 mark, smack in the middle of the fair value range and the historical average for all companies since 1900. Intel and Microsoft are both in the 9.something range, which marks them as either slightly undervalued or that the market doesn't rate their long term potential.
For that well put informed opinion. Sense at last. Re: MS share price. MS's PE at the 9 something mark. I agree with your analysis. They are either undervalued, or the market simply cannot see the strategic upside. But these things can change quickly. MS are currently in a lull with being behind the curve re: tablet devices and in between OS releases. How much is this currently the Balmer effect.
I wonder where the index would be tomorrow if it was announced Bill Gates would be coming back to take charge. Not that I'm a Bill Gates fan, but there can be no doubt he had a real edge and drove the company places. At least he was prepared to make "bet the farm" decisions.
Apparently you've completely failed to grasp what PE represents. Think of it as "cost of money" going one way, or interest rate going the other. If a company DID EXACTLY AS WELL as it did last year then a PE of 13.9 represents a 7.2% yield on investment. The market takes a view on the future of a company and the risk of them getting more or less than 7.2%, and compare that with the cost and risk of other shares.
So PE doesn't assume linear growth, or growth at all. It's a measure of how well a stock is expected to do relative to the market (and from that how much money investors expect to make). Lower PEs indicate a lower chance of growth, higher a higher chance.
Apple doesn't rely on being thought of as the underdog, and they haven't for quite some time. They sell to the premium market on the basis of design quality an ease of use. They still pretty much own the personal music player market based on that, along with tablets, and have a good slice of the smartphone market (despite Android, or perhaps because of it, sales have been growing at a healthy rate). Macs are now a sideline. In these other markets Apple is a major player and is making big money.
Litigation? Thats pretty much a cost of doing business in the US, especially when a company is doing well in valuable new markets. Other players want a slice of the action. Pushing and shoving results.
The markets have factored all of these elements in. As risks convert to certainties you can expect some movement either way, but the idea that the stock price is grossly out of line is quite honestly laughable. Either that or you should be making big money as a market analyst (and we know that ain't going to happen don't we).
"So PE doesn't assume linear growth, or growth at all. It's a measure of how well a stock is expected to do relative to the market"
Is the P part in PE not justified by the market assuming a level of forward earnings discounted to the present thereby arriving at a price? i.e. people buy the stock at that price because they think it is a fair representation of the value of the company, that value being its discounted future earnings. Ergo growth is being assumed.
Couple of good posts there. Just one small point I would take issue with:
"[Apple] still pretty much own the personal music player market based on that, along with tablets, and have a good slice of the smartphone market (despite Android, or perhaps because of it, sales have been growing at a healthy rate)."
Apple dominate the music player biz, but it's a stretch to say they own it. Philips, Sony, Archos, and Sansa all have their hooks in there. Simialrly, and whatever you think of them, cheap tablets from a range of manufacturers are gobbling up the tablet market. And iOS has just been overtaken by Android phone sales, I unerstand.
> Theres a bubble in some IT stocks at the moment. I'm not sure Apples share price is an accurate reflection of it turnover/profit compared to Intel/Microsoft who have a very solid business in comparison. Alot of that price is in the image not the reality, Mark 110
"Microsoft generated a net profit of $5.23 billion whereas Apple’s net profit was valued at about $5.99 billion" ..
Besides P/E ratio, a more accurate assessment of current stock price is forward-P/E which, as implied, measures price vs estimated future earnings (usually 1-year down the road). Using this, AAPL has a FP/E of 12 versus just under and just over 9 for MSFT and INTC respectively. By comparison, GOOG's is 13 and BIDU's is almost 34. Of course, this is only one of numerous metrics but you can safely say no one formula can fairly value a stock's price. If there was, it would be quite a predicable and monotonous stock market.
I just don't get how using a Mac makes people feels like they are Apple's'shareholders.
Sure, they do profit. With LESS volume than some competitors, wich means higher margins.
So basically, they sold overpriced sexy products and people are happy about Apple results?
Seems to me the whole thing is about Apple's products cleverly designed to makes you *feel* different.
And fanbois are happy with that.
You hit the nail on the head. Apple's products are cleverly designed. They feel different because someone has put the effort to actual care about how people use these things.
They may be controlling, they may be borderline communist in their ideals, but they certainly design the frustration out of the software and hardware, and design in beauty. No one can deny their products are beautiful, and are, solely responsible for the current designs of Windows, Android, KDE, etc, etc, etc.
"They may be controlling, they may be borderline communist in their ideals..."
If you are going to use loaded words, please use them correctly. Unless you've seen a completely different Apple than I have in the last several years, you probably meant to say borderline "fascist," not "communist."
AC asks why people are happy paying for overpriced sexy products? Well, duh, isn't that obvious? Forget your blinkered look at commodity lowest price technology products and look around you in real life. Why does anyone pick a Rolex rather than a Casio watch, an Armani suit rather than one from C&A, a Mercedes rather than a Chevrolet, Prada sunglasses rather than Boots own brand, a Sony TV rather than an Alba, a house in the posh end of town rather than the run down end?
They're all sexy overpriced products and collectively we all LOVE to spend our money on them, or aspire to them if we can't afford them now. Why should consumer electronics products be any different?
Even people living off benefits buy Apple gear. Along with bling, 60" plasma TVs, fags, and enough booze so they don't recall the scrap they had in the street last night when they were thrown out of the pub.
Meanwhile, hard working people who can't afford to buy Apple gear within their means are very happy with Wintel and Android products. Not that they necessarily want Apple stuff anyway. It's not exactly value-for-money when compared to Wintel/Android products.
But you have to give Apple credit for being the ones who popularised smartphones and tablets with innovative designs. (They did not invent either)
Microsoft and Intel must be very embarassed by this latest news. C- boys. Must try harder.
"They're all sexy overpriced products and collectively we all LOVE to spend our money on them, or aspire to them if we can't afford them now."
Speak for yourself in that tired tradition of "Keep consuming, Britards! And why not indulge yourself like Posh and Becks? Spend more money on stuff... we're all sinking!"
You did manage to touch on something that's been widely reported already: Apple's financial characteristics are more like luxury vendors like LVMH than technology vendors like Intel.
You are using over generalization.
Not everyone think like that, hope like that, dream like that.
Those who favors Apple because it has some kind of social recognition associated with it just don't know WHAT they are actually buying.
They buy an image, hyped and overpriced.
They don't buy the technical product.
That's why i stick with what i've said:
They are not Apple shareholders, they both a social recognition (not a computer), and feel different because of that.
This purely emotional behavior shows in their commitment with Apple financial results.
If you check gross profit on products: Intel has higher gross profit than Apple. Many other tech companies have higher gross profit than Apple.
Apple has an average gross profit on 22% on their products. Apple have over 50 billion in cash in the bank. These does also generate profits. Together with their cash profits is about 32% per sold item.
Different segments in a company have different margins. A guess is that Microsoft Office unit has a gross profit of 90% and have a loss on other segments.
...but perception is reality.
Barking over and over than underpowered low spec, low margin bottom feeding machines are somehow better *just* because they're cheaper is nonsense. In the end people will pay for perceived value, if the level of value is there they won't pay and as far as I'm aware most Mac owner repeat purchase?.
I'd wager that Apple competed at the bottom end box shifting end of the market, OS X would run as poorly as W7 does on such hardware. The choose not to and so deliver a better user experience.
In the end as a consumer (be it cars, white goods or anything else), you get what you pay for and not everyone wants the same value propostion...
Apple always uses off the shelf and cheap chips as long as they serve their purpose of running Apple experience.
I really know Apple hardware and I have even seen realtek, motorola software modem chips, el cheapo Taiwan sound chips.
If you can admin a Mac Mini latest gen and run bootcamp, install windows 7 and all the drivers you will see what I mean. Poor machine becomes a joke.
Windows and especially chip/software 3rd party vendors who really seem to lose their minds are the problem and it even includes big names like Sun/Oracle. Even they add a needless startup item java update checker while Windows has its own "cron" used by Apple and it keeps running 24/7.
They basically sell an experience and a philosophy that computers should not be different from any ordinary home device.
In addition to that, they have "easier to use" UNIX desktop, even certified and NeXT running on it.
I thought Linux guys understood their mistake on desktop and... Gnome removed close/minimize buttons to save desktop space on a damned minimum 1024x768 desktop! Without asking anyone that is.
I won't buy anything Apple soon but I still use my powerpc macs so sorry not joining your Apple hate. Of course I hate mac fan(atic)s more... That is the reason I may move to windows 7+openbsd virtual on a commercially supported virtual machine.
If you think millions of people including very clever and creative types buy high margin Apple just for image, you remove freaking close/minimize buttons and keep blaming dumb people.
MS does stupid mistakes at core level. I bet Ballmer will personally fire you if you came up with "lets remove close button" idea. For example, instead of making NTFS less fragmenting, cleverly acting on Windows, they added low IO priority and zero detail defragmenter. That is just one of their mistakes. Apple guy knew what he was talking about. HFS+ does fragment too but doesn't do it nearly on purpose. It is just logic. No spec change needed. Just know where heads are and try to predict user behaviour. No magic and your "dumb" user will notice it doesn't slow down after millions of file operations, years of usage.
Ummm didn't much of this come about after apple moved over to intel chips?
Isn't it time everyone just gave up on this and spent their time on something more productive that "company x" is better than "company y".
Both companies do different things, and with the things they overlap on ms does some better and apple does others better.. Can't we just accept that and move on?
Since 1984, I have run my business on Macs. I've had about 40 over the years. In all that time, I have had one power supply failure and one Powerbook screen go stripy and had to be replaced. No old Macs were scrapped, every one was sold-on and got a good 'used' price. I have never needed 'support staff' to maintain them. I have never had a virus or other malware.
They might cost more at the outset but that does not mean 'expensive'!
1. Requiring a large expenditure; costly.
2. Marked by high prices
Nowhere does it doesn't mention total cost of ownership, over the lifetime of the item. I get your point, but I think you're stretching the definition to fit your argument.
For the record, I'm a several generation iPhone and Macbook owner, and I'd still call Apple gear more expensive, but I don't mind, cos I can afford it.
the actual dollar value of a company or its market share is not a valid argument for brand superiority.... all it says is that apple customers spend more money than wintel customers...
considering that we all know that apple customers pay a premium price for fruit flavoured icons on products does this really come as a surprise !!
> How else do you suggest we define the success
> of an entity that's designed to redistribute wealth?
How about by how much wealth it has redistributed then? When the only recipient of the wealth has been the company's coffers, that's accumulation, not redistribution.
If they actually paid dividends on the massive profits and bank balance they're sitting on, then it would be a different matter.
So, If I sell 50 products for £950 each then that makes me more successful than the company that sells 950 of a comparable product for £100 each when they both cost £50 to make?
They both have the same cash in the bank, but the one selling higher volume has to be the bigger company with a bigger market share?
MS and Intel are centred around an absolute stranglehold of the market, held by Windows and Office. Nothing touches or threatens that hold - it has remained almost constant for nearly 2 decades. Even OpenOffice (that can be obtained for free) can't make a dent in Office. MS could keep tweaking and releasing the same products for decades without breaking a sweat.
The reason is simple - most people have a natural tendency to follow the herd (i.e. what is perceived to be the predominant group) and aren't inclined to step outside their comfort zone. I have to laugh when the people in the 95% group using Windows scoff at the 5% using Macs as 'sheep'. Most will change only if the alternative is 100% compatible with what they have, and substantially looks and feels the same. Apple finally realised that was impossible and gave up competing with Wintel - it targets a certain segment of the market and gave up caring about the rest.
It has been a vital strategy shift - Apple would have gone under if they had continued to go head-to-head with Wintel. Linux and OpenOffice carry on that struggle, but it's clearly a doomed effort. Ironically, Wintel's greatest enemy is itself. If they try to ape Apple's strategy, the changes may become so great that users find the new offerings just as scary as shifting to another platform. I can't help wondering if the desperation that is written all over the 'Windows 8' proposals will do exactly that.
I for one always argued office was hugely undervalued. When mac fans used to go on about the superiority of the Mac OS (and i am now a user of OSX myself) i used to point out how, though Windows provided a vital foundational layer, the greatest stand out successful product wasn't Windows but Office. For years it wasn't just more powerful, but offered by far the most innovative user experience (MS for example, really made autocorrect work in a way Mac software still struggles to match).
But they are being outflanked. I think the most important trend has been away from long document production. Now business is, far more than before, conducted with small bites of information sent by email and instant messaging. There are far fewer long documents in day to day business transactions (at least it seems that way to me). I used to worry about office compatibilty far more than I do today. It just seems to me I am getting fewer and fewer documents with sophisticated formatting that require office. I'm being somewhat facetious saying this but sometimes it does seem like the only thing keeping MS ahead with office is pivot table capabilities of Excel. In the networked world the iPad really isn't so far off being a viable business device for many (though, of course, by no means all) classes of office work.
Gamers have to use Windows. People forget that the reason for this is that Microsoft abandoned GL and OpenGL and used a closed system DirectX. This has always been MS tactic. Apple is a lot more open since they use industrial standers like HTML5, OpenGL, H264, Darwin open source kernel and so on.
MS makes their most profits from Office. The problem here is that large companies have to pay for stuff from Microsoft that they don't want. Large companies can't count every single licence for Windows/Office and so on, so they use a Select agreement with Microsoft. Lets say your company want 10K Windows licenses. 5K Office licenses.
No. You cant do that. Select force you to buy licenses to Windows/Office/exchange/server and all other crap.
The point being: Companies that have windows license are often forced to get Office license. Ericsson used Star Office (later morphed into Open Office), when Ericsson signed a Select agreement in late 1990 so where they forced to dump StarOffice/Netscape and so on. That is how MS compete.
Today you can get an Ipad + Iworks for the same price as Office. Let's hope this open some companies eyes.
"Gamers have to use Windows." - its really down to the realites of the market, the vast majority of machines on the planet run windows, therefore, it makes sense for games manufacturers to target the majority of the market.
"Apple is a lot more open" - really? you absolutely sure about that?
"Today you can get an Ipad + Iworks for the same price as Office." - Really, I picked up office in PC World for £79 , I didnt realise the IPad was so cheap ;)
No one is forced to use any OS, and price is relative, Apple hardware is extremely expensive and on relative terms underspecced compared to other high end brand Wintel machines. Nothing to stop you running all open source either thanks to Open Office, Ubuntu and the like. Ultimately, you pay your money you take your choice.
The Wintel comparison became irrelevant since Apple stopped being a PC seller (yes a mac is a PC) and became a gadget seller!
Also it's been a long time since a PC was just Microsoft and Intel or that it was important to have either. My graphics card cost more and has far greater impact than my OS and Processor combined.
Feel free to compare like for like such as iOS vs Windows vs Android/Chrome vs Linux or x86 vs x64 vs ARM or maybe Intel vs AMD vs the myriad of ARM producers.
The problem I have with Apple is all the others you can mix and match (yes even Windows (7/8) on ARM and Android on x86 coming soon!). Buy from Jobs and you will be stuck under his thumb. His hardware, his software and anything more innervation than an app is unwelcome.
Microsoft didn't just stay in the desktop OS/Office tools market either. They branched out, first into peripherals where they've been quite successful, then they attempted to crack set top boxes, mobile phone handsets, MP3 players etc. Other than routers I can't think of a product that Apple has made that MS hasn't attempted to compete with in some fashion. Oh and in the last few decades we've seen MS effectively break into the datacentre business, which was still miniscule back in the days of NT4.
Both firms have been attempting to compete across the entire technology space, wherever they could see opportunity.
Now a better argument for why this is not news is that Apple's market cap is artificially bloated by their 66 billion $ cash pile. If you actually compare enterprise values then Wintel would still be ahead, though MS alone is still definitely behind.
After all, an apple success on the desktop = more chip, gpu and mb sales for it. Then again, when you've got the desktop Market cornered, you're not worried.
What intel are probably kicking themselves over now are not being able to provide a chip like the a4 or a5 to apple. I imagine the share price/value would look a lot healthier, had they been able to achieve this. I agree with the author - intel really need to take it to ARM now, what the increasing number of mobile/low power devices making it to Market..
Note: I'm not an intelboi
... Now that I don't have to use any of their products. But the hours (days/weeks) of pain sorting out god-awful system problems have left scars that are too deep to heal. The relative bliss of OS X is still fresh in my mind, even though come to think of it, I switched probably now 4 years ago. The day I moved from one Mac to another and found to my surprise, everything just transferred. documents, applications, settings, the works and all on to a fresh OS install without a hitch (e.g. The data and applications separated from the system and installed on top of a fresh system) . I was blown away and my years of it experience on Windows had lead me to think such just would't be possible. Windows had "taught me" (or so I thought) There must be an incompatible library (.dll) dependency or some bad state data (don't utter the words " registry" in front of me) a hitch somewhere.
The King is dead, long live the king!
I'll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around me
Pick up my guitar and play
Just like yesterday
Then I'll get on my knees and pray
We don't get fooled again
Don't get fooled again
Meet the new boss
Same as the old boss
I say congratulations to Apple. I personally dislike their products and ecosystem ethos but I can congratulate them on a successful product creation and marketing campaign.
I'm curious to see how they do over the next few years. With the way OS's and software (and app stores) work nowadays with their locked-down approach it's going to be interesting to see if people move ecosystems any faster or slower than before.
But why do you hate them? Have you used their products?
The "closed" system: the only difference between Apple and MS/Google is that Apple make their own hardware. There are huge advantages for making own hardware.
1) Android has to be recompiled for every single Android phone. Over 200 versions of Android. This is why you have to wait 3-6 month before an upgrade to an OS.
2) With in-house hardware you can make you products almost bug free. It is fun to see that Microsoft is using the same approach with Winmobile 7+. Microsoft license WinMo7, but you have to use a set hardware.
3) If you look at speed test Android Vs Iphone4. Apple A5 chip, 30% of the die area is for graphic accelerations. Apple can do this because they control the graphic layer on the phone. That is why a single core A4 800mhz is just 3-8% slower then the latest Androids with dual core 1.2ghz.
I can put different PCI cards in my PC and use different App stores on Google? Open: As long you use Windows and Google ads on Android.
The openness is therefore a myth since if you use PC: you have to use Windows. If you use Android: you have to use Google Ads.
First off - where did I say I 'hate' them? I didn't. I said I dislike their products and their ecosystem.
I have used, and have to regularly set up, alot of Apple products, and have had to over the last 20 years or so. I know the company and their products well. So yes.
I didn't say ANYTHING in the slightest about one company or their products being better than another, or even that any were more open than any other. My comment was a reference to ALL of the current OS's and the direction they appear to be heading.
From what I can tell of so many of people like you is that you're all so busy looking for the Apple vs Google vs Microsoft etc pissing contest that you've all forgotten - it's all about those companies vs the CUSTOMER. As long as they're playing the customers off each other over which is better and which one the customers should buy, they're bamboozling the lot of you into not realising that you could not buy any of them!
Let's look at msft and aapl over the last 10 years. Firstly, Microsoft have issued about $6 in dividends whereas Apple have issued no dividends whatsoever. If Microsoft had not been issuing dividends they would have a cash pile now of about $50bn+interest which would be remarkably similar to Apple's cash pile. The market cap would also be a lot closer. As anothing poster has pointed out the price to earnings ratio tells a similar story. Apple aren't really more profitable than Microsoft, the markets just appear to have costed in the value of their cash pile in pricing. This makes sense at the moment where a cash pile is overvalued due to the economic conditions.
Of course, if you look at the change in value over the last 10 years, Microsoft has lost value whereas Apple have undergone astronomical growth. I know which stock I would have liked to hold over the last 10 years. I'm less sure about which one I would like to hold for the next 10 years. If you look at the core business of the companies, Apple has rapidly grown some new markets, but new players have entered those markets and in many cases are now doing better than Apple (eg Android vs iOS). Microsoft has been plugging away at the same old market, but no-one has any meaningful market share in those markets (Windows and Office). I don't think Apple is going anywhere soon, but it is more likely to struggle in market value than Microsoft I think. Having said that, both Google and Oracle are likely to struggle more.
I don't see how a mac is overpriced,
in my case I paid I think 1400USD for my iMac around 3 years ago.
So I pay per day on my iMac so far : 1400/3/365=1.3usd/day
I will do at least one more year with this machine...
1.3usd is about 50% of a startbuck caffee latte nowdays???
Great use of irony there.
I paid about $500* for my laptop around 3 years ago.
<Calculator icon> 0.456621
I don't drink coffee and if I did I certainly wouldn't be buying it from Starbucks when I could make it at home (and no, not in a fucking Keurig).
* Although it's in dollars I'm not a Merkin. But I'm sure you already knew that from my use of and recognition of irony.
that useless idiots like yourself would bother to check the numbers before making these stupid financial pronouncements.
Apple make more profit than Intel and slightly less than Microsoft. The market is well aware of Jobs's health and have factored that in. The company valuation is spot on in line with their current earnings (not future projections).
If you want to short AAPL then feel free, but don't expect to make money doing it.
I cant stand the MacOS, and I will never use any of the iDevices. I dont hate apple but I think they make flashy, overpriced, and technologically inferior products. For artists or musicians, they're great, but Im neither. Apple doesnt suit my needs, so I dont purchase from them.
Yes, other platforms have their quirks. Someone mentioned that Android has to be recompiled for each hardware environment, but as its a Linux fork, its not hard to do that. Also on another related point, if I root my android im not risking a lawsuit or being locked out from security updates, Google actually encourages you to root your phone. Quite unlike what apple tends to do to iPhone users who do the equivalent of rooting.
Im a Windows user and a Linux user, so by default I cant stand alot of things about Macs, and Apple's tablet is a flashy techno-toy that makes them money. The Jesus Phone I will admit spurred innovation. Android wouldnt be as good as it is without the iPhone existing. Still, I remain unconvinced about tablets being useful except in certain applications, for instance we were using some of the first tablet computers (we called them slab computers) in the US Army 8 years ago, and they weren't that damned useful except for mapping applications. Really my biggest beef is that users of their desktops and laptops are locked into THEIR hardware, which In my considered opinion sucks. What if I want to upgrade my processor or hard drive? The short answer is too bad unless you want to do something along the lines of a so-called "hackintosh".
If you could easily upgrade the hardware id probably feel differently, but Im really sick of manufacturers giving consumers the shaft in that regard. Its a cancer thats spreading. In computing there is NO SUCH THING as one size fits all. And Apple seems to disagree. God forbid MS does, but from what Ive been hearing about Windows 8, they're going down the same road, at least in tablets. MS needs to realize it needs to differentiate itsself from Apple in EVERY WAY POSSIBLE instead of trying to pull some half-ass emulation of what Apple's up to.
Apple bought Next and with it Avie Trevanian and NeXTStep. I had a Next box and the beauty of the OS was its layered model which meant the OS could support any processor as needed. Likewise, the UI was a brilliant concept sitting on top of a unix core and way ahead of the other UIs of the time. It made unix user-friendly. To me as an engineer, this was heaven-sent design. Sadly, NeXT failed to get enough sales to survive. Fortunately, Apple bought NeXT and the rest is history.
It's nice to see that good OS design was one of the factors that helped Apple succeed. I doubt they could have done it if they'd stayed with OS-9.
I'm not a fanboy at all, i buy what's best for my needs.
So i own a windows 7 dell inspiron duo (tablet-top) and own an X10 running android 2.1, soon to be android 2.3.
Just thought i had to mention that to safely ask what the value of Google is since my guess would put them either slightly below Microsoft or far above.
Their product is advertising space, and that is DEFINITELY not free.
They are giving Chrome OS away free also, to gain more consumers that they can advertise to. It's less than a perfect solution and the initial batch of Chrome machines aren't even that cheap. Don't count on it's success (IMHO Android stands a better chance).
Market Cap is not the factor, Market Share IS, everyone uses Google products and services every day and every day they find new ways to exploit that Android is one of those ways. The vast majority of computer users use Microsoft and/or Intel products (including Apple users). Market Cap is just a bullshit factor for ignorant city types.
MS desperately needed cover in the ongoing Anti-trust lawsuit and so they invested in Apple and promised to provide ports of the latest version of Office (which had been allowed to fall far behind)
Jobs returned in early 1997, and the MS investment (of 150mil in preferred equity) was in Aug 1997. Ironically MS had sold that stake by 2001, which is yet another bad financial decision for them.
To paraphrase; in the short term, the stock market is a voting machine, in the long run it's a weighing machine. The undecided bit is which is it currently, a voting result or a weighing result. I imagine it is a little of both. While AAPL has a pretty good P/E ratio, both MSFT and INTC are better but where the rubber meets the road what counts is which is a better buy. If we make some basic assumptions, such as the forecasts for all three are correct and nothing strange happens in the meantime (good luck with that); we can do a basic analysis to indicate the better buy.
Taking numbers straight from the nasdaq.com for 1 year target estimates and current dividend yeild an investment of $1000 today would be worth $1310 if invested with AAPL, $1275 for INTC and $1490 for MSFT. Going further we see the estimates show that the expected market cap of AAPL to be about $27.7B behind MSFT+INTC. So what does that all mean one year down the road? The same thing it does now, jack shit unless your a fainboi of one of the companies involved.
Balmer says, "Developers, developers, ..." Microsoft has a long history of screwing their partners. There is no VC market in the Microsoft space, because there is little way to have a successful medium to large company. The VC market is in Linux/Android and Apple, because they are far better partners.
Microsoft is the closed garden, in comparison, Apple is open and Linux/Android are the open sky.
If Microsoft can't do it all in house, they are going to fail. Reminds me of General Motors of 5 years ago really.
"Earlier this spring, the folks at WTVD-TV, the local ABC affiliate in Durham, N.C., had a bright idea. To drum up interest in the station -- and raise its profile on Facebook, Twitter and Google Buzz -- it organized a sweepstakes contest and gave 11 lucky winners the hottest prize in consumer electronics: an Apple (AAPL) iPad.
What the contest organizers didn't realize -- but would have quickly learned if they'd done their due diligence -- was that they'd just run afoul of Apple's Guidelines for Third Party Promotions. Operating on the theory that its brand is one of its most valuable properties, Apple has laid out some pretty strict rules about what companies can and can't do with its products. Among them: (I quote)
•iPad, iPhone and the iPhone Gift Card may not be used in third-party promotions.
•iPod touch is only allowed to be used in special circumstances and requires a minimum purchase of 250 units.
•You may NOT use the Myriad Set font on or in connection with web sites, products, packaging, manuals, or promotional/advertising materials.
•The use of "free" as a modifier in any Apple product reference in a prominent manner (headlines, call- outs, etc.) is prohibited.
•You must submit all marketing materials related to the promotion of Apple products to Apple for review.
The two-page document that lists these guidelines -- and many more -- has been around at least since January, but it seems that Apple has begun reaching out to companies to enforce them only recently. Earlier this year, Cult of Mac's Nicole Martinelli counted more than three dozen active iPad sweepstakes and giveaways, including contests run by Mashable, MacMall and Mahalo. None of them, as far as she knows, was ever told not to do it.
Apple declined to comment."
So guess the Apple law department will be hiring
This past decade those things are true. You can't blame day-traders and speculators for a decade - it just won't hold up. At some point you have to step back and assess that yes, one of these companies is getting more things right and fewer things wrong than the other one. As someone above put it, "This is what you get when you sell people what they want rather than what you want to let them have."
I would like to recommend that Steve Ballmer remain CEO of Microsoft forever.
Somebody already mentioned it but it's true that a lot of the articles cited in Rik's story were published pre Apple-Intel shift. Before that happened in '06 Apple looked like they were struggling to compete in terms of processing power, tdp etc.
Obviously if you have a level playing field using the same parts as your competitors and you choose to go down the premium route, there will be people willing to buy.
Time for tech people everywhere to call it like you see it. An Apple PC is exactly that - it's wrapped up in a pretty package but at it's core are all components you could easily buy and assemble for yourself. The only thing that seperates it from the rest is the mac os. Apple on their own website state OS X is "what makes a mac a mac". Which in this era of hackintoshes must make my pc a mac.
Now that we've dealt with that side of it, can we address why this 'gloating' is heavily centered towards those who predicted that mac+os x share wasn't going anywhere and if it was it was going down? In fairness to all concerned we can at least admit that a large chunk of that $317.6 billion is not the result of mac sales. Seems to me that the turning point for Apple was when the great unwashed were allowed to get their hands on Apple tech. A mac/macbook might be well out of their budget - or even a mac mini (worthless compared to the spec + upgradability of an equivalent priced desktop pc) but they can afford to buy a ipod/iphone on contract/ipad and they can afford to get it now. Microsoft have totally missed this 'essential' life gadgets market so kudos to Apple for this revenue stream, but the comparisson in market caps is bogus.
Anyway, enjoy your time in the sun fanbois - eventually prices will be such that macs will be in the hands of virtually everyone and then you will just be 'one of us'. Then the only flame wars will be between 'us' and 'them' (the few soldiers of the linux hold-out resistance.)
I own apple kit, but I wouldn't charaterise myself as a fanboy (I think jobs is a douche).
Given the assets owned, and product produced by both MS and Intel when compared to Apple just seem to prove the old adage that the stock market isn't about valuing companies, it's just a fancy popularity poll.
You'd think that the whole thing was run by a bunch of amateurs using a dart board to price stocks the way that they go on. Stock prices are set based on current earnings and expected future earnings potential combined (and there's lots of smart people and computer power looking for over and under valued stock). You'd expect to see an averagely performing company have a price/earnings (PE) ratio of between 10 and 17 (lower is underpriced, higher is overpriced). Historically the average for the last 100 years has been 14. Looking at a quick sample of companies from the Dow Jones:-
Boing: PE 18.1
Cisco: PE 11.6
Coca Cola: 17.0
Home Depot: 15.0
Apple? 13.9 EXACTLY where you'd expect to find them right in the middle of the pack, and not due to a one-off sale of some asset or other.
Appl€ might be valued more, but it certainly isn't worth more. This fashion bubble created by iPhone owning traders will burst soon.
It's also more of an illustration of how much all these saddos who think that they're "living the Appl€ lifestyle" are being exploited by a giant mega-corporation.
Apple's moment of genius was in realising it couldn't beat Microsoft and Intel at their own game. The overwhelming majority of proper computers currently run Windows, will still be running Windows in ten years time and may still be running Windows at the turn of the next millennium. The same is true of servers. Both will also be using Intel architecture for the foreseeable future - in fact, Apple now pay lots of money to Intel, an idea that would have been ridiculed by Mac fanbois just ten years ago.
No, the real fight of the 21st century has been between Sony and Apple... and Sony have had their butts well and truly kicked.
Now that the battle with Sony has been won, Apple face their biggest opponent yet: Samsung. Samsung is a global behemoth - one of the world's biggest conglomerates, its electronics arm has a revenue twice that of Apple and it's breaking into areas where Apple have been making most of their money. The Samsung Galaxy S is currently outselling the iPhone 4 in the UK and the eagerly awaited new Galaxy Tab is shaping up to be the first serious competitor to the iPad.
Whether the American corporation can hold out against Samsung and other competitors is a serious question. Apple have so far been playing the role of the plucky underdog, but now they are one of the big players. Unfettered growth can no longer be expected and the maintaining of market share is now what Apple need to focus on. Will the iPhone 5 and iPad 3 be able to hold their own against the next generation of Samsung, HTC, Blackberry, Nokia etc etc products? The early teasers of Windows 8 suggest another big ground-shift in mobile computing with the hybridisation of mobile and traditional OSes - a one-size-fits-all OS that will allow seamless transition between PC, tablet and smartphone. Google's Chrome OS promises a cloud-based seamless experience which should offer PC level computing on tablet hardware, thus cutting the cost of hardware well beneath that of both Apple and MS computers. It's no longer enough for Apple to focus on leading the way. The lack of innovation in the iPhone 3G S and the iPhone 4 has shown that Apple's dynamic edge has suffered under a desire to diversify - there's only so much creativity to go round at Apple, and perhaps their sales and revenue figures have grown faster then their product development base can support in the long run.
Very interesting post. It is perhaps indicative of the situation that Apple now find themselves in that they have become unusually keen on reaching for their lawyers. Whether it is patenting *very* generalised concepts designed to do little more than plant a series of legal minefields all over the mobile communications market space or picking quarrels with the others amongst the big boys like, of course, Samsung. When a company's reaction to challenging circumstances is to try and control the market by brute muscle (Microsoft and Intel in the nineties) or by a whole series of what can only be described as vexatious misuses of the patent system (Apple amongst others today), that is a company that is losing its way/confidence when it comes to innovation and leading the market.
Market Cap is great but market share is what matters, Apple is still operating in Niches as it always has since the days of DTP. OK I'll grant you that the technophobic is a big niche but it is still not a patch on Windows. The other factor missed in the article is GOOGLE, Apple is facing serious competition in all its markets and is beginning to feel it. The difference is that ist competitors won't lock people in, force them to use iTunes and bleed them dry. Apple was on the brink of going bust, it was Microsoft that saved it, they must have wished they hadn't.
This is exactly what we say. Apple's hardware is not valued by its inner qualities but from the hype around the brand. For it is a regular middle range pc inside. And has no other value whatsoever.
A 3 years old MacBook is about as powerful as my 3 years old Toshiba, but i paid it about 3 times less (400 euros, stuffed with same level hardware).
And i actually KNOW they are about as powerful for running on both CPU intensive (integers and floating points) scientific calculations for hours.
It took 24 064 seconds for the cheapo PC,
and 25 251 for the pricy Mac.
I still want to know what is it about Apple kit that gets right up the nose of Windows people and too a lesser extent the Linux/BSD crowd? I am not talking about the stereotypical image of a Mac buyer, all West-coast attitude, GAP khaki's and buying into the BS spewed by the Apple ad-men , but what is it about the actual products makes Apple like the desktop equivalent of Marmite, setting brother against brother, spouse against spouse?!
Answers on a postcard please!
its rather expensive for what you get, especially if you dont care about the design and looks of stuff. Other then that, nothing. I have used/use all 3 OS's(windows, linux, OSX).
And to be honest, some of the Mac owners I have met are the most annoying people that are not capable to accept the fact that there could be a flaw in a mac product. The mac owners group seems to have a larger % of idiots like that compared to other OS's.
MS are king. Apple is king, Linux is King,......
Jeez people, they are just operating systems and you lot are acting like these are your babies.
Then again, for many of you the only experience of sex you will ever have is with your computers. ;-)
Just remember, whichever OS camp you are in, what goes up MUST come down and NOTHING lasts forever.
like Fidelity perhaps? (biggest investor 18billion stake)
State Street? (12billion)
or maybe Vanguard? (12 billion)
71% of Apple shares are held by institutional investors, compared to 63% of Intel, 64% MS, 62% oracle etc.
What about CALPERS, biggest single pension fund in the USA?
They own 860mil$ of APPL, 624mil$ of MSFT, 330mil$ of Intel.
I could probably get more hard data proving the point but I've wasted 5 minutes already
Market cap is simply a measure of what shareholders value a company at.
Unfortunately a comparison of Apple shares vs Microsoft and Intel shares isn't exactly fair as there is a key difference between them: Apple does not pay dividends.
For shareholder return on investment, they can only sell for a profit, which drives the share price up. As Apple is the golden boy of the market, prices will remain high, and people will continue to drive up share prices. But this means Apple's valuation is artificially high.
For a better indication of company size, try looking at equity (total assets minus liabilities). Apple may have a wickedly high market capitalization, but it has a smaller equity than Intel.
How funny then, that Bill Gates is richer than Steve Jobs and that Apple are only still with us because Microsoft bailed the company out to the tune of $150M US http://www.nytimes.com/1997/08/08/opinion/the-apple-of-microsoft-s-eye.html back in 1997.
(here in glorious (OK, YouTube) TechniColor http://www.youtube.com/watch?v=WxOp5mBY9IY )
Really sums up Church of Jobs rather well.
They made peace. Apple had been at war with MS since the Windows look and feel lawsuit which MS won in 1994. The bad blood between the two was extreme, with MS subsequently letting the Mac version of office go to seed and Apple joining Netscape and friends in complaining about MS' behaviour to the DoJ.
By 1997 this was a serious problem for MS, the DoJ was getting heavier and heavier, a full prosecution under the auspices of the Sherman act was only months away, and MS realized that the one thing that they couldn't afford was for Apple to be bleeding all over the court with Bill Gates' fingerprints on the knife. Jobs had returned a few months earlier and was looking for some big splashy PR, and so the two firms negotiated a peace.
As part of a deal where Apple would drop all lingering legal complaints against MS and they would cross license patents, MS promised to properly support the platform, and to invest 150mil. If anything saved Apple it was the application support rather than the 150mil.
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