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Apple's Market Cap Exceeds Google's
Lawrence Person writes "Mac Daily News was one of many Apple-followers to note that Apple Inc.'s market capitalization exceeded Google today. That means that the combined value of all Apple's outstanding shares of stock exceeded the combined value of all Google's outstanding shares of stock. Apple's stock is worth $157 billion and change vs. Google's $156 billion. Other companies Apple has surpassed in market cap include Cisco, HP, and Intel. Also, Apple is now worth 3 times the value of Dell Computer, despite Dell's founder and CEO declaring over a decade ago that if he ran Apple, he'd 'shut it down and give the money back to the shareholders.'"
... it's amazing that a company like Google, that has been on the stock market for only a few years, can have a market capitalization about equal to that of a technology powerhouse like Apple.
On the other hand, is there anyone in their right mind who thinks that Google will be as valuable after 30 years as Apple has proven to be?
Seriously, if you bought Apple stock when it was first available and sold it all in the early 80's you would have been incredibly rich. Then, if you would have bought it all back in the 90's and sold it again today you would have replenished what you would have spent in the mean time.
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A web business that has MICROSOFT shitting bricks.
If Microsoft had a magical "one-hit-kill" bullet that could eliminate just ONE major competitor, they'd pick Google, not Apple.
+1 IDisagreeSoHeMustBeATrollOrAnAstroturferOrAShill
The funny thing is that I've seen a lot of Mac fans cheering each quarter at the new record profits and at the same time get very defensive (or even offended) when someone suggests that Apple is selling their products for a lot more than it costs them to produce (yes, including fixed costs like R&D etc) compared to most of their competitors.
Actually, Apple has $4.6 billion in profit.
Usually, market caps are much greater than yearly profits. If they were the same, then that would mean the investment could yield 100% per year in earnings, which is much higher than usual.
Right now, Apple would pay about 3% per year if they distributed all their earnings as dividends to investors. That figure isn't very high, so why is Apple's stock price (and market cap) so high?
Apple's stock price is high because wall street expects that Apple's profits will increase substantially in the future. The high stock price is based on anticipated future returns. If Apple were a "no-growth" company then it's market cap would be about half what it is.
(If you subtract the cash and assets from the market cap, you have $120B, which is what wall street thinks the risk-adjusted discounted net present value of all future earnings from Apple will be. Wall street expects those earnings to increase.)
I'm not sure I would invest in Apple at current prices. I'd rather put my money in intel or even microsoft.
The difference between Microsoft and Apple, is that Microsoft is seen as a NECESSITY for business, whereas Apple's products are seen as COOL. But cool is fleeting. I could see young people dropping their iPods 5 years from now the same way young people dropped acid-washed jeans, Doc Martens, and Walkmans. But businesses will never drop Wintel. Never.
I'm not sure that the risk of "suddenly uncool" has been adequately factored into Apple's share price.
The problem is there's a few things at work there:
1. Apple seems to have accumulated a cult-like following of people who self-identify with the corporation. It's weird.
2. Apple only competes in high-margin markets, where they often are price-competitive.
3. Apple doesn't disclose internal costs like R&D.
If "smartphones" evolve to become the dominant computing platform over the next decade - as I think is likely - Apple has the potential to grow until it dwarfs Microsoft . . . and everybody else in the business. Looking at the market as it stands right now, Apple is in a position to become a sort of Microsoft on steroids over the next 10 years.
For years the tech press has been nattering on about "convergence" devices. Microsoft and Sony sank tens of billions of dollars into their game console business in part because they'd hoped their devices would become a ubiquitous digital hub, a move I always found questionable, since many households would never purchase a game machine and neither company has shown any skill in providing interfaces users enjoy working with.
Unfortunately for them, in the meantime increasing miniaturization and decreasing power requirements made it practical to produce full-fledged personal computers you could fit in your pocket. The iPhone is a tiny Macintosh with a built-in touchscreen that just happens to come with an integrated cell phone, and as such represents a far better bet as an ideal convergence device than a videogame machine.
Apart from the appeal of the cell phone as a convergence device, the other problem for the remaining players in the market, like Dell, HP and Microsoft, is that margins on dedicated personal computers are crashing. The same technology which makes it possible to cram a fully-functional (if not state-of-the-art) personal computer into your pocket has also slashed the price of even relatively high-end desktop PCs to well under $1000. At these low prices - you can get a fully capable desktop these days for around $300, and a laptop for $200 more - the devices are becoming commodities with little if any margin left. Low PC prices are also making it increasingly difficult for Microsoft to justify its outrageous software prices - on a PC loaded with Vista and MS Office, the cost of the Microsoft software can easily exceed the cost of the hardware itself.
Apple has the advantage of producing and selling both the hardware and the software. As such, the declining cost of hardware won't necessarily erode their product margins, or at least won't erode them as much as it will their competitors. They can also have the cost of the unit subsidized by the carriers themselves, allowing them to charge consumers more for their products than rivals like Dell and Microsoft, who either don't have access to such subsidization (Dell and their PCs) or who have to split it with the hardware manufacturers (MS and the smartphone makers themselves). While Apple's overall margins are likely to decrease as most customers migrate away from more expensive, traditional desktop and laptop PCs, their market share and overall number of units sold will explode. And their margin situation will still be vastly superior to that enjoyed by the likes of Dell and HP in the (dying) dedicated personal computer business.
Apple's other advantage is their focus on the customer experience. Whereas Microsoft has spent the past 20 years trying to lock customers inside the Windows jail, Apple's focus has been on trying to lure customers onto its Macintosh platform. It shows with the iPhone, which has an interface that puts the jumbled, klunky Windows smartphone interface to shame. The iPhone sports an interface consumers are willing to pay a substantial premium to enjoy.
I suspect at some point in the next 2-5 years Apple will move to make the iPhone a true PC. They'll make some kind of docking station available, so you can connect it to a full-sized monitor and keyboard and wired network when you're at home or at the office, the way laptop docking stations currently allow users to connect. It'll have the advantage of allowing corporations to replace not only their existing desktop and laptop PCs, but also their telephones and employee cell phones, since the iPhone will be able to function as all of these devices. Mobile users who require a keyboard and larger mon
Nokia would be in a really good position if they started listening to their HCI people, but I wouldn't be surprised if we see some Indian and Chinese hardware manufacturers starting to produce 'white box' phones running an open source stack and relying on external developers to do most of their software work for them.
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I hate Apple because Every product I have owned, or belonged someone close to me, have failed within two years. Apple does not respect or honour Norwegian consumer laws. You are required to provide 2 or 5 years of warranty at no additional cost beyong the initial investment in the product, but Apple insists on 90 days.
Yes, Apple should honor Norwegian law if they want to sell products there. But 90 days? Every (non-refurb) Apple product I've owned has had a 1 year warranty. Do they really reduce it in Europe? I find that difficult to believe. Also, why would the Norwegian gov't not pursue them for warranty law violation?
That, plus your other claims have me verging on calling shenanigans. Apple products are MORE reliable than the competition. The internet is rife with people using Macs after 6, 8, even 10 years because they just won't die. But the question is, what products are you referring to? I suspect they are iPods, and a lot of people do not realize that the expected lifespan of an iPod is only 18 months. The devices, after all, do get carried around, subjected to fluids, bumps, scrapes, drops, crushing, etc. And I suspect your sample size is two--you had an iPod and a friend did too. I'm sorry they failed but without more info, I'm not sure your post tells us more than we knew without it.
"We can categorically state we have not released man-eating badgers into the area." - UK military spokesman, July 2007
do you have any idea of how many companies had tried to put out 'rio' style portable music players? literally hundreds, so why has apple sold 150 million or more ipods? because they got it right, and they combined a sleek sexy music player with a cheap source of music, through the itunes store. I've explained to countless people they can make mp3's from most audio cds, and in general instead of learning a new program they ask ME to do the leg work of encoding their music. it takes money to use itunes, but it's easy to use.
and now, the ipod brand is more famous than the walkman brand was in the 80's.
the iphone is a huge printing press for money as well, they get money from the sale of it, and even more from the contract with at&t. jobs coming back to apple, and as the CEO really worked out great, so far. although i think even apple will start to feel the pain that so many tech companies are feeling from the global economic downturn that seems to be happening.
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