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Apple Surpasses Dell's Market Value
bonch writes "Nine years after Michael Dell said he'd shut down Apple and give the money to the shareholders, Apple has passed Dell in market value, at $72,132,428,843 compared to Dell's $71,970,702,760. Analysts expect Apple to continue to outperform competitors, citing 2006 as 'poised to be the year of both iPod growth and, more importantly, Mac market share gains,' with earnings growing more than 35%. I should have bought stock two years ago!" We talked about the approach of this moment back in November of last year.
Dude, you're getting an Apple!
Situations change.
What this has shown is that Apple was viable back then, and that Michael Dell doesn't have the necessary vision to run a company such as Apple.
He has enough vision to run a business selling PCs. Enough capability to scale it up to its current dominant position. He may indeed be a better business person than Jobs - I don't know - but Jobs clearly has something he doesn't (apart from the emotional attachment to Apple).
I'm sure he wouldn't say that today. Indeed I doubt he would have said it in 2000. But in 1997 it was certainly an option. An option that would have removed a competitor.
Before you run out and buy your new Apple shares take a look at the P/E ratios.
Apple 54.87
Dell 23.71
The run up in the price at Apple while, commendable is predicated on the hype around iPod and the assumption that will translate into sales of desktop machines.
Tons of reasons to have concern.
It is interesting to note also that Apple is near its 52week high. And Dell is near its 52week low.
Apple
Price & Volume
Recent Price $ 85.59
52 Week High $ 86.40
52 Week Low $ 33.11
Avg Daily Vol (Mil) 25.269
Beta 1.403
Dell
Price & Volume
Recent Price $ 30.58
52 Week High $ 41.99
52 Week Low $ 28.62
Avg Daily Vol (Mil) 22.084
Beta 1.08
FYI. prices are competitive with Apple Products with DELL. I was wondering on the Price difference. So I matched similarly specked (I had to customize both to make them similar) laptops
Dell Inspiron 9400 $3,302
MacBook Pro $3,248
Now to be fare the Dell Inspiron did have a 17" display while the MacBook Pro was only 15. So I added the cost of the apple care program which is about the same as a size upgrade, when comparing older powerbooks of equal specs at different sizes.
Granted that with Dells and other PC you have a wider selection of options that allow you to customize them more closely to your budget. Vs. Apples one size fits group of people. But the Price of Apple Systems are about the same with as its equally match PC brethren.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Dell's aim is to have the best supply chain and produce computers cheaper than anyone else, this means they don't really do any innovation its more of a Wallmart sort of play. Now you can get very big being a Wallmart type of business but the challenge is that Dell are in a field where competition has almost always been around innovation. From a margin perspective the aim of Dell is to operate at low margin but sell in bulk, Apple are aiming at high margin and selling decent volumes. The reason people pay more for Apple's stuff is the innovation and design, the reason more people buy Dell machines than Apple's is because of the cost.
Two different models, its not comparing two similar businesses.
An Eye for an Eye will make the whole world blind - Gandhi
Apple's hardware prices are generally in line with market rates in the 'not cheap tat' market areas.
For example, the PowerMac is competitive price wise with any 4-core system you can configure from the major PC manufacturers.
And now the MacBook Pro is similarly competitive, price wise. The parent poster did rightly point out that you have many more options on the PC side however.
You can either save money on the PC side by going with a lesser manufacturer, building it yourself, or making use of a wider range of customisable options. For example, Acer's Core Duo laptop is supposed to be significantly cheaper than the MacBook Pro. OTOH IBM's ThinkPads are roughly on par.
Also don't forget that many people are fed up to the eyeballs with Windows XP, and hell, that Mac OS X keeps getting recommended, and there's all those applications, and my iPod is easy to use, hmm, maybe it is worth a couple of hundred dollars on its own to not get the XP stress.
It does show how overpriced previous PowerBooks were. I wouldn't have liked to buy one in the past few months just to have this come out.
At Macworld Microsoft stated that they have signed an agreement to continue for at least 5 more years. So it doesn't sound like it is going to die any time soon.
Well Unix was a smart shortcut for Apple. A relatively quick way to make a Stable and Secure OS. Take a Unix kernel Modify it for you OS. and there you have a stable OS in a lot less time from starting from scratch. I would say apples portable systems are the real grab. (iPods, iBooks, PowerBooks, MacBooks), Unlike most desktop systems, which you just put on your desk and work on, there is where price/performace is the key factor. But with portables design and style becomes a part of the factor.
With portable systems they tend to be accessories with your cloths that are functional, much like watches, you could ware an ugly plastic digital watch, or a shiny metal analog watch, they both do the same thing but one looks better. The same with portable systems, if you have to go to school with a laptop and you pull out some 3rd party Laptop which may be powerful but looks like a brick. Or you pull out a clean new Powerbook err um MacBook Pro, or some other stylish laptop such as a Sony Vio, even if the specs are not as good, you still look better to your class and other people. I am sure a lot of slashdotters don't care (or say they dont) about impressions to other people, but most people do, and they are the ones buying most of the computers now. Apple tends to understand the need for style. Secondly with portable gear you need to have what you really need integrated with the laptop and placed in a spot where you would use it. Things like needing to add Ethernet Dongles, or having to switch between Ethernet and Wireless cards, Easily accessible USB ports for Flash sticks, and things like Apples new magnetic Power Cord because you may be plugged in on a high traffic area. All these add up and are important to portable users. While the OS has some to do with apples success. I find that OS X is the best platform for Laptops, It detects new wireless hotspots easily, It changes networks without much of a hiccup, It works well on Windows, and Unix networks. But that is why it is doing so strongly lately. First people get the iPods because it is cool. Then while they are at the store they see the other cool things apple has and they realized how good much of their products are.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
... and give the money to the shareholders
Market cap or Equity Market cap, does it matter? I bet Michael Dell really hates it every time somebody brings that quote up in conversation and every body starts laughing. It must be the first thing every new employee at Dell HQ learns:"OK, iPods, PowerBooks and anything else with an Apple logo is off limits and whatever you do, don't crack that Apple shutdown joke when Mr. Dell is within earshot, the last time that happened he punched the guy who told it and cancelled our christmass bonuses!"
Only to idiots, are orders laws.
-- Henning von Tresckow
Dell 9400: 1.6" Thick
;)
Mac Book Pro: 1" Thick
Dell 9400: 7.94 lbs (3.60kg)
Mac Book Pro: 5.6 pounds (2.54 kg)
I'm not sure which Dell Screen you picked but:
Dell 9400 17" Screen Res: 1440x900
Mac Book Pro 15.4" Screen Res: 1440x900
Dell 9400: 4 Pin IEEE-1394 (I'm guessing)
Mac Book Pro: Powered 6-pin IEEE-1394
Dell 9400: Windows Mandatory
Mac Book Pro: OS X
Both can dual boot Linux, so that's not really an issue.
I've had my TiBook for 2.5 years now, and was shocked when I saw colleagues getting these huge, fat Dells. Maybe I'm a weak person, but when you can be carrying around a laptop that's 1" thick in place of a laptop that's 1.6" thick, and about a pound and a half lighter, why wouldn't you? I suppose if you like cheap looking plastic, you might prefer the Dells, though, and making sure Redmond gets their tax, and a nice big, low-res screen. I'll take the MacBook Pro
You are wrong, sorry. Equity value+debt is called "total capitalization." "Market capitalization" is the value that the market ascribes to the common equity value of the company. You are buying a share of this common equity. The fact there there exists debt is already baked into that determination in various ways based on how people think that such debt helps or hurts the company's future performance.
The calculation you describe is grasping at a concept called "Enterprise value" which is total capitalization minus cash. Think about it. If you are going to add on the debt that company has to the total amount someone would need to pay to buy the company, because they would be assuming the debt, you should also subtract the amount of cash on hand. Finance 101, dude.
A lot of their success hinges on his charisma alone. Charisma is hard to value or replace.
Apple has sold 42 million iPods, 14 million in the last holiday season. Everyone I ask who doesn't have one would like one. There seems to be some room for growth there.
"A language that doesn't affect the way you think about programming, is not worth knowing" - Alan Perlis
First of all, Apple has close to $9 billion in cash and cash equivalents, not $6 bn, about $12 bn in total assets, and no long term debt.
Then, you have the $5.7 bn revenue last quarter (not 5), including $1 bn in Apple Retail revenue, and the fact that revenues, profits, and unit sales are consistently increasing quarter over quarter, year over year:
Total revenues [and profits] for fiscal year, in millions:
2001 - 5,363 [(25)]
2002 - 5,742 [65]
2003 - 6,207 [69]
2004 - 8,279 [276]
2005 - 13,931 [2335]
Not to mention record (and increasing) sales of all of Apple's products, from iPod, to iTunes Music Store, to the Mac platform, including servers and enterprise.
You're also really wrong about Dell having "more profit in one quarter than apple's entire value":
Total revenues [and profits] for fiscal year, in millions:
2003 - 35,404 [2844]
2004 - 41,444 [3544]
2005 - 49,205 [4254]
Yes, Dell is a bigger company (surprise?) and has higher revenues and sales. But over the last two years, Apple is growing at a faster rate. Much faster. Also, when you say "market share" you'd do good to include the market share of all of a company's money-making products, not just the figure you like. It's funny when people keep going around saying things like "Apple, with 1.5% of the market" seem to forget that Apple has over 80% of another huge "market". Does that market not count?
Now we've got a transition to a commodity hardware architecture and platform, with the industry abuzz with what this could mean for Apple in the enterprise for a variety of reasons.
It's funny that you state exactly what is wrong with a lot of people in the financial sector: not being able to look past next year, or even next quarter, for what something is "worth".
Source for financial data: Apple Dell
Well, what your laptop says about your sense of style really does not matter if you show up to class in an old faded T-shirt and sweatpants now, does it?
Just "gittin-r-done," day after day.
Business Week... April 16th 2001:
6 /b3728067.htm
Q: That bad?
A: Maybe it's a little bit different. But if you look at proprietary computer companies, whether it's Digital or Silicon Graphics (SGI ) or Apple (AAPL ), I think the fates are all relatively similar. We know how the movie ends. It's just a question of what happens in the middle. Apple has a very little customer base. If you look at the economics, it has been extremely hard for Apple to get a return on its R&D with a shrinking volume base. It's not to say that Apple's products aren't innovative or cool, but the economic factors here are so overwhelming, it's very hard for them to swim against that tide.
Q: If you were running Apple, is there anything you could do to change that?
A: I would never take that job.
http://www.businessweek.com/magazine/content/01_1
Is what would happen if Michael Dell tried to run a company that had to make quality products to stay in business.
We've got dozens of dell servers (hundreds of servers total) where I work, and the dell servers have a 100% failure rate. That is, each and every dell server experienced a hardware problem that required replacing something. Although usually non-critical, no other vender even comes close. They may make passable desktops and laptops, but their servers are from hell.
"We are all geniuses when we dream"
- E.M. Cioran
"Sony is an R&D and manufacturing juggernaut and could outengineer Apple to build a better iPod."
So why haven't they done it yet? I mean, it's not for lack of trying. They've released 'ipod killer' after 'ipod killer' and Apple has gone from strength to strength. The reason that nothing has 'killed' the iPod is because it is a cool gadget. People want an iPod, not an MP3 player, and thats the main reason why Sony and Creative probably won't be able to 'kill' it for a long time.
While I might get flamed for this one, in the home market at least, it's not Unix that people are buying, it's an experience. Unix is an important part in the scientific communities and for some hard core techies, but the people who buy the mac mini, iMac and iPod's aren't worried about the underlying technology.
Apple has created a brand experience that most marketing people try to copy harder than eCommerce sites copy Amazon and eBay. Everything about an Apple product lets you know your dealing with a company that puts the user experience first. That's Apples brand niche.
When I bought my first mac some 8 years ago... I was awe struck by the packaging - not of the computer - the card board box it came in was user friendly. It was perfectly clear what was in each box. It was intuitive which piece needed to come out next - the foam that was around the monitor was easy to hold on to and take out. Nothing about unpacking the computer was frustrating.
When Apple retail stores hit the scene, did anyone note that the UI on the electronic signature box matched that of Aqua? Did anyone notice that your receipt font matches the fonts on the box / os x / sales literature etc?
I bought a G4 tower a few years ago and the little details that go into engineering the case and hardware are what diferentiates Apple from any other manufacture I know. I lift a little handle on the side of my case and the whole thing flops open and I have access to clean the entire machine. Additionally, all of the edges of the stamped steel were de-burred so I didn't cut any of my knuckles open as I poked around inside the case. I understand most non-slashdot-reading users will not ever open their case, but much like a Mercedes-Benz, when you look under the hood or at any small corner of the car, you know no expense was spared to ensure whatever level you interface with the product it is solid, reliable and nice.
Even the iPod I bough 3 years ago came in a package that was clearly labeled. It was clear that designers had thought about the process of opening the package, puting the iPod on the left (since we're a left to right society here in the US) where we would look first when orienting ourselves to the two halves of the box.
I expect Jobs and the rest of the crew at Apple to continue making an experience that is every bit as robust and consistent with their products as my last few years of experience with the company has been.
AF-Design, web development.
This is the problem with CEO's and their big mouths:
6 /b3728067.htm
--
From: http://www.businessweek.com/magazine/content/01_1
Q: What is the future of Apple Computer?
A: Silicon Graphics.
Q: That bad?
A: Maybe it's a little bit different. But if you look at proprietary computer companies, whether it's Digital or Silicon Graphics (SGI ) or Apple (AAPL ), I think the fates are all relatively similar. We know how the movie ends. It's just a question of what happens in the middle. Apple has a very little customer base. If you look at the economics, it has been extremely hard for Apple to get a return on its R&D with a shrinking volume base. It's not to say that Apple's products aren't innovative or cool, but the economic factors here are so overwhelming, it's very hard for them to swim against that tide.
Q: If you were running Apple, is there anything you could do to change that?
A: I would never take that job.
--
I would love to hear his response to those questions today...
Style, flair, and innovation are Apple hallmarks with Steve Jobs at the helm. Dell is just another PC maker, nothing more. When Apple suffered through those other CEO's, the style, flair and innovation were missing. Apple never was, nor will it ever be just another personal computer company. Gil Amelio and John Sculley never really understood that.
Dell has no real style, flair, nor innovation. Michael Dell sells PC's, nothing more, nothing less. The most creative thing he has done is build an odd sense of customer loyalty where Dell owners believe that their computers are better than other Windows PC's. There is a place for that, but in the end Apple excites the consumer PC market, and Dell along with others ride the waves.
I mean look at KMart and Sears. Very good store with very good prices. Both added some value to through the product initially, through selection and location, but failed to continue to push that value. Walmart can in and they were toast. Dell is the same thing, but worse. Dell has the added cost of repackaging, but limited flexibility in terms of managing costs. OTOH, Apple has shown that will act aggressively to manage hardware cost, and is able to make changes to the OS to so do.
Dell is succesful becuase they are able supply large number of cheap computers to large firms. As long as they can win contracts, they will survive. However growth is out of their hands. Growth depends on MS maintaining a release schedule that encourages fast upgrade schedules, which they have not done. Growth depends on firms growing enough to add machines, which has happened. Growth depends Windows providing enough value so that large firms double license at least some machines. Growth depends on new machine running Windows, and not *nix, unless of course Dell is so cheap that even with the MS license the machine is a good value.
That is to say Dell has little control over it's future. It may decide to risk the MS gravy train and set out on it's own, but no one at Dell sounds that creative. At some point someone else will do MS Windows machines better, perhaps MS, or the desktop PC may become a thing of the past, and we will see how Dell does on low margins and low volumes. I mean, is anyone actually going to buy Dell at even a 10% markup?
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
Sony _could_ have revived the 'walkman' name with a stylish portable mp3 player.. remember when everyone had to have a walkman? but sony was at odds with itself over DRM etc etc.. the last thing they wanted to be making and selling was a product that could be used to illegally trade mp3's. so, there were a lot of people trying to make a name in the portable mp3 market, and that's when apple hit with the ipod. and the ipod it was good, and people loved it, and the ipod became the 'walkman' of this generation. 'oh you're not cool, that's just some crappy mp3 player, too poor to get an ipod huh?'
a sh/neoflash-review.htm
The cat is already out of the bag, and yeah, sony was well aware of mp3 players, and had the hardware and engineering guys who could have designed an efficient one. they were banking on the mp3 format to 'just go away' so their record label could make more money selling CDs. or something like that.
Besides sony was focusing it's effort at dominating the video game sector, they've done an awesome job at it, and they've managed to 'launch' the psp (against nintendo's iron grip on the handheld market) in every major country except the UK. And all this for a system that won't have a respectable* game title for another year, and has no back catalog of compatable games.
I know people who are very happy with their PSPs but most of them have hacked the firmware and are playing ROMs on emulators... frankly I'd rather buy a flash linker and play them on a cheap GBA SP, since DS linkers are still immature, and GBA linkers work with more systems than DS ones. http://www.gameboy-advance.net/nintendo_ds/neo-fl
for $300(or less) i can get a very nice car/portable dvd player with detachable screen(s). and i don't need to buy movies that only play on a psp, plus i can play dvd+-r's i've burned, or movies i've rented from netflix. so the movie playback capabilites don't impress me.
the NDS however has several games i love, and several i wouldn't mind owning.. plus works with my old gba titles, which i have about 20 of or so. I am still worried about nintendo's long term strategy, but they've beaten everyone else out of the portable market, so if they keep on making awesome systems with awesome games, then sony will remain the 'other' portable gaming device.
*= IMNSHO psps launch titles suck, a look at gamefaqs doesn't show much promise til you look at games with no us release dates, or release dates a year or more from now.
https://www.gnu.org/philosophy/free-sw.html
While I might get flamed for this one, in the home market at least, it's not Unix that people are buying, it's an experience. Unix is an important part in the scientific communities and for some hard core techies, but the people who buy the mac mini, iMac and iPod's aren't worried about the underlying technology.
Generally true, but "the experience" runs on Unix. When my non-techie friends ask what kind of computer they should buy, and I tell them to get a Mac, I don't say, "It's really cool to have a great GUI as well as access to all the great command-line Unix tools, all in one carefully thought out integrated package." What I do tell them is, "You get the best, most modern interface, plus it's much more secure and stable than Windows because it's based on Unix, which is the operating system that actually runs the Internet.* So you can just do what you want to do with your computer instead of spending half your time dealing with crashes, viruses, and spyware. Also, if you ever do decide you want to get into some more advanced stuff, let me know." Which is a pretty successful sales pitch, and has the virtue of being both true and relevant to "the experience" they'll have with the computer.
* Yes, I know this is a horrible oversimplification, but it's essentially true, and I'm always happy to go into more detail if people ask.
The correlation between ignorance of statistics and using "correlation is not causation" as an argument is close to 1.
Actually, Apple gets value from the combination of style and solidity.
Consumers resent a crappy product in a pretty box. They feel, with justification, that the company should have spent more money on "making the damn thing work" rather than just slapping on a few go-faster stripes.
That makes style a big market advantage for Apple. It doesn't matter how much you case-mod your Winbox, you'll still be on the patch-and-virus treadmill, and still have the same risk of BSODs as someone using a POS white box. Likewise, a KDE box in a gorgeous enclosure will have exactly the same function set as a built-in-the-basement wonder.
Apple's products are solid enough that their style is worth considering. People freaked out over the Nano because you could scratch the screen if you put it in a pocket full of change, not because it randomly locked up, or because they couldn't transfer some of their files, or because it stopped working in cold weather, or any other basic function issue.
Once you hit the point of diminishing returns on 'making it just work', style is the next playing field on which you compete. But you can't play in the 'style' arena until you've aced the 'it just works' level.
"Unix is the only way"? Eh, Microsoft is very successfull with it's own non-Unix operating system.
Basically, yes. Every good operating system I know of or have used in the past 10 years is unixy. I did not do pre OS X Macs, I did do Apple squiggle squiggle in for 10 years before this time, and had no UNIX experience. The first MacOS was pretty cool, because there simply wasn't anything else remotely like it available. I didn't use it, I just played with it on other people's computers and in stores. I did occasionally use pre-OS X MacOSes, and I did not like them. Bombs from memory mismanagement, other stability issues, and whatever. I thought they were behind X windowing systems and even Windows in terms of cosmetic looks. The OS wasn't 3d-like until 8, but I crashed 8 within 10 minutes of using it, and was not impressed.
Hell, even Microsoft is starting to add UNIX features like better headless support, scripting, a real shell, remote access, periodic commands (cron), etc. They have had SFU, etc. These are standard unix features that have been around for about 30 years. I work with UNIX and Linux systems, and use Macs as my personal machines. At work, we have Windows, Macs, and UNIX and Linux, more on that later.
I'm not sure what "market value" is really an indicator of.
Actually, when first reading the headline and stuff, I was thinking what commodity OS are people going to use after Windows?
I don't see OS X being the standard any more than Ferrari or Porche or other high-end cars being standard. Even though the price (TCO for the PHBs) is about the same as other systems now, I just don't see Apple with 90% market share, and I'm not sure if they want to either.
But, IMNSHO, Windows is dead. Bear with me. At work the Windows admins, have mostly switched to Macs for their personal machines. I don't talk to them or see them that much, but I see that their emails are coming from Mail.app (Mac default mailer), and I have heard of people switching. Honestly, I can't think of one of our Windows admins that does not have a Mac now, I could be wrong. All of the UNIX admins have Macs.
I'm a geek, and a computer guy by trade. I simply don't have the need to use any Microsoft software for my personal or professional needs. The only MS software I have on my computers is IE and WMP. Both are basically EOLed, and horrible on the Mac.
Maybe people will still use Windows because it has been "good enough" and maybe that will stay the same. If Apple breaks the bond between the hardware and software integration since they now use commodity processors like Dell and others, then maybe OS X will become the standard. I just don't think Apple wants to have the issues with 3rd party hardware and the associated stability issues and support costs and possible tarnish their reputation. Maybe people will use Linux if the fundamental issues of conformity, ease of use increases with software installation, and a good GUI. However, there does not appear to be enough focus on that end. Maybe a commercial company will put these things together, and it will be the commodity OS. Don't know.
Interesting times for computers. There is still plenty of room for improvement across the board though.