Slashdot Mirror
Apple Surpasses Microsoft In Market Capitalization
je ne sais quoi writes "Today Apple surpassed Microsoft in market capitalization, a metric of the perceived worth of a company. At around 2:30 pm EDT, the total number of Apple shares were worth $227 billion, whereas Microsoft's were worth $226 billion. Both companies' stocks ended the day in the red, and have dropped in value since the Greek crisis began, but Apple's share price has been falling less quickly. Of American companies, only Exxon-Mobil has a higher market cap at this point at $278 billion. According to the article: 'This changing of the guard caps one of the most stunning turnarounds in business history, as Apple had been given up for dead only a decade earlier. But the rapidly rising value attached to Apple by investors also heralds a cultural shift: Consumer tastes have overtaken the needs of business as the leading force shaping technology.'"
Consumer tastes have overtaken the perceived needs of business as the leading force shaping technology.
There, fixed that for you. The day of the PHB making decisions based on the novelty of the promo mugs and pens they just received is coming to an end. Thank god.
I work for the Department of Redundancy Department.
Looks like an excellent bubble to take advantage of. Sell (or short) Apple, buy Microsoft.
Apple's PE ratio is also 2x of MSFT, Walmart, IBM, GE, XOM etc...
And don't forget that they're the underdog and can't be investigated for anti-competitive behavior!
meep
"It was ten years ago today, all my tech stocks blew away,
they've been going in and out of style, but you're guaranteed to lose a pile"
apologies to Sir Paul...
But seriously, folks, this is a bubble price. Like the $656,565 valuation on that crappy three-room clapboard box-house that you almost bought in Fresno three years ago. *I hope that you passed that one by*.
Bubbles exist in markets. When they burst, the people who believed that the price was a realistic valuation lose most if not all of their money.
Now is the time to sell your Apple stock. EXXON owns the world's energy supply: Apple owns some coolness. Is Apple the second most valuable company in the world behind Exxon?
No f***ing way.
A lot of people lost a lot of money believing in tech stocks ten years ago. Heed their lesson.
Serious question: Windows had fanboys? I always figured Windows was for people who didn't care (I mean that in the nicest possible way).
"Microsoft hasn't really been growing for a decade" is only true in the broader, "hahahahahaha" sense:
http://www.microsoft.com/msft/download/Yearly%20Income%20Statements.xls
Deciding just how much they grew is sort of a difficult exercise, as both 2000 and 2009 had 'interesting' business events, but the low end argument is that they increased earnings by $5 billion, which is about 50% of their 2000 income. It is also about 80% of Google's earnings (which is an interesting comparison, because Google is widely hailed as a success, whereas people often say that Microsoft hasn't don much).
It wouldn't be insane to argue that they increased income by $7 billion, a 100% increase over their 1999 earnings, and it wouldn't be shocking to see them back near $18 billion for 2010 (they have already reported $14 billion of income), which is a $9 billion increase over 2000.
Of course, none of those numbers account for inflation.
So really, what happened is that Apple grew a whole bunch more.
Nerd rage is the funniest rage.
when the vast majority of them can surf the web/IM/email with an iPad.
Yes, because of course web/IM/email are the *ONLY THREE THINGS* done on any PC in an average home... absolutely no-one writes or prints out any documents, plays any 3D accelerated games, uses their home PC to stream movies to a media player, uploads and edits photos from their camera, rip movies and music for convenient storage, etc. etc.
And *OF COURSE* nobody ever has more than one application running at once on a home PC, laptop or netbook.
So an iPad is a *PERFECT* replacement for them.
Gentoo Linux - another day, another USE flag.
Only foolish (lowercase f) investors believe market capitalization (or number of shares times share price) is meaningfull as any real metric of the value of a company or it's stock. It can be a valuable indicator of a company that's price is way to high though (usually because of stupid investors).
Let me give in you an example, it's a test I call the Walmart Test. Walmart does billions in revenue a year and make billions in profit, they are a highly successful business with solid growth in earnings every quarter, reliable profits and has a massive book value (the total value of assets). At the peak of the Dotcom era Cisco had a market capitalization that was the highest on the stock market, close to 500B IIRC. This exceeded the Walmart Market cap by more than 5 times (~76Billion IIRC) and edged GE by several dozen Billion. Even if every dollar of revenue for Cisco was profit and that profit was passed directly to shareholders they weren't even a 1/5th of the earnings per share Walmart was making. In the ideal world all profit from the enterprise passes onto the stockholder, in fact that's the basis of the worth, the promise of future dividends for companies that are reinvesting capital rather than paying a dividend (but that's another lecture all together)
Because Cisco was valued so much higher than Walmart with significantly less earnings it was apparent that the stock was highly overvalued. Later at the dot-boom correction Cisco lost nearly 90% of their market capitalization (falling to less than 10Billion from 500Billion). That translated into a decline in price of the stock by about 90%. The same can be said for Apple, compared against real (boring) companies making solid profits they are extremely overvalued. Even if Apple were to grow sales 100% a year for 5 years they still couldn't match Microsofts actual profits. If you are looking for a long time short Apple is your game boys and girls. It's going to correct some day and it's going to be a brutal correction.
This over-valuation is quite common in tech stocks, people invest in companies whose products they like (terrible investment strategy BTW). Stocks of this nature are almost 100% over valued and when they correct due to bad news it's a very vivid correction. Beta on these stocks can be 3-5 because of the casual investor who panics at the bad news, that and the stocks usually have high short percentages that will exacerbate a drop.
The lesson of this post People is don't invest based on meaningless metrics and in tech stocks with rabid fan-bases that invest in the company. They are almost always over priced, and react much faster to negative news with the potential for much larger declines in the price. Put simply the market cap of Apple should scare you away from investing in it easily.
This "story" is either an intentional troll or it was posted by someone who has no clue.
Market capitalization means dick in the overall scheme of things, especially since it can change at the drop of a hat. Changing of the guard? What the hell does market capitalization have to do with that? It might mean something if you had two companies who compete in exactly the same market segments, but Apple and MS only compete in a couple.
You can't compare Apple to Microsoft unless you specify what market segment your talking about. Going strictly by market capitalization alone is idiotic. You might as well compare Boeing to Walmart and then claim there is a changing of the guard.
~X~
And... we're still using the borg icon for Microsoft and yet using the actual Apple logo. Maybe we can get some update graphics on the site?
Is that AAPL is grossly overvalued. Especially when you consider price to earnings and return on equity. Microsoft sells 8 billion more per year than Apple (59 bn vs 51 bn), and keeps a larger percentage of it as profit. Sales growth has also been greater for MSFT than for AAPL. And Microsoft pays a dividend to boot, Apple doesn't.
But I guess like everything else Apple, it's no surprise that their stock is overpriced as well. Feel free to buy it.
Seven puppies were harmed during the making of this post.
At least Microsoft can program an OS, unlike Apple who had to get Unix, since there old OS sucked worse than Win3.0
Ability to code an OS may be nice to brag about, but your customers can't care less. They appreciate only results, and if you build your product from best components users like that.
There are thousands of computer manufacturers in the world and only ten or so OS kernel manufacturers (if you count all Linux flavors as one.) Years ago it was common for a manufacturer to build their own OS (and I worked for one such company) but eventually they saw the light and migrated to a supported commercial RTOS, just because it was so much better, and cheaper too.
I'm wondering if Microsoft has simply plateaued. Yes, they'll sell lots of the flagship products, but I suspect for the most part these are people buying new computers and/or upgrading Windows or Office installs. There's a point at which growth is going to stall out, which is why Microsoft has burned considerable amounts of money trying to branch out, and burned money they have. How much money have they blown on the Xbox, on the rebranding of MSN every four or five years, on Zune?
I'm no fan of Apple, but where Microsoft seems at times like a crazed octopus just wildly flinging out its arms trying to hit on the next BIG THING, Apple has taken a much more disciplined approach, and for the most part over the last decade has simply kicked ass. Jobs has steered the company in an extremely profitable direction, translating Apple's hardware expertise into product niches that exploded. There was a time when Gates was that good at reading the market, but Ballmer is just a mean-spirited one-dimensional bean counter (to be fair, even Gates screwed up plenty, nearly missing the growing importance of the Internet, but Microsoft had the sheer dominance to push out a horrible OS with the worst TCP/IP layer in history and sell it). Jobs is a monopolistic megolomaniacal whackjob, but he goes got a good market compass.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Not that I'd argue MS has done anything different than they always have, just seen a lot more press on Apple and rather dubious strong-arm moves. For example
http://www.sevensidedcube.net/business/2010/apple-investigated-for-abuse-of-power-in-the-online-music-market/
You're just being short sighted if you don't consider smart-phones and tablet devices to be computer equipment.
Before the iphone, nobody would have considered a non-user-programmable phone a smart-phone, same thing with pda's, tablets etc
no, these things have general purpose input capabilities, general purpose programs and installable 3rd party applications
Without jailbreaking? or requiring cash for the apple development kit and abiding by their rules? apple has set back general purpose computing more than any other company, what they are great at, is making 'appliances'.