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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 $278 billion. According to the article: 'This changing of the guard caps one of the most stunning turnarounds in business history, as Apple had been given up for dead only a decade earlier. But the rapidly rising value attached to Apple by investors also heralds a cultural shift: Consumer tastes have overtaken the needs of business as the leading force shaping technology.'"
Consumer tastes have overtaken the perceived needs of business as the leading force shaping technology.
There, fixed that for you. The day of the PHB making decisions based on the novelty of the promo mugs and pens they just received is coming to an end. Thank god.
I work for the Department of Redundancy Department.
...and?
"Destroy science and religion. Science would re-emerge exactly the same; but not religion." - Penn Jillette, paraphrased
the mother of all flame wars. The only way this article could only be more dangerous is if it were posted to 4chan.
Good people go to bed earlier.
Please don't tell the Apple fanboys about this, or we'll never hear the end of it.
There's no -1 for "I don't get it."
Microsoft hasn't really been growing for a decade, while Apple has. The market capitalisation often reflects this, because people are more willing to buy shares in a growing company, expecting that their value will increase over the next few years. People only buy shares in a stable company based on the expected dividends. This means that Apple's stock price is likely to be more volatile than Microsofts and, as long as the continue to be perceived as growing, greater than the current 'real' value of the company.
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Looks like an excellent bubble to take advantage of. Sell (or short) Apple, buy Microsoft.
Apple is now officialy THE ENEMY here at slashdot. M$ is just another bad guy now.
The only thing this tells me is that investors are very slightly more confident in Apple's future.
Apple has a good business model for the current market, a vertically integrated company is well suited for fluctuation during violent market turns because investors worry less about shortages, missed financial targets and product competition. Microsoft is *hardly* moved by this in reality, though, and still makes most of their money on business licensing - and they are doing fine. MS employees are still having the private jet weddings to the caribbean with ice fountains flowing with rum.
I said no... but I missed and it came out yes.
...we're all seriously fucked.
Apple's imaginary value is greater than Microsoft's imaginary value. Now I'll have to spend some of my imaginary money to buy an imaginary Apple to get some imaginary work done.
Apple's PE ratio is also 2x of MSFT, Walmart, IBM, GE, XOM etc...
"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.
Steve calm down.
I'm sure you guys'll release Windows 7+1 and bounce right back.
*snicker*
Mod me down, my New Earth Global Warmingist friends!
Serious question: Windows had fanboys? I always figured Windows was for people who didn't care (I mean that in the nicest possible way).
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~
Wolfram|Alpha is great.
According to that excellent tool, Apple was valued higher than Microsoft through the '80s, as high as 3.2x as much as Microsoft. Then, right around the turn of the decade to 1990, Microsoft pulled ahead.
By 1998, Microsoft was worth 100x Apple.
Now, they're back up to even.
Another non-functioning site was "uncertainty.microsoft.com."
The purpose of that site was not known.
...imagine a whole Beowulf cluster of Apple companies!
Gentoo Linux - another day, another USE flag.
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.
http://www.apple.com/pr/library/2010/01/25results.html
Um, Apple generates billions of dollars in profits each quarter as well. Sorry, what was your point?
I think the high point in the history of Microsoft was when they released Windows 2000. Here was an operating system that multi-tasked well, had perfected integrated networking and didn't blue screen. I remember a lot of people who had been using Redhat 9, which was crap, switched back to Microsoft and noticed that it didn't crash that much and they were pretty happy using it.
Then came WindowsXP and IE6, which gave everybody pretty much everything they wanted in an OS. It was easily pirateable and spread all over the world.
Then came malware, botnets, and the ensuing security disaster of science fiction proportions and Microsoft spent the next 10 years plugging security holes. Those were the big feature with Vista and Windows 7 remember-- more secure. This was all the fault of Microsoft demanding that unmanaged x86 code with full access to the win32 api run everywhere. It's an enormous, outlandish security hole just waiting to happen.
Meanwhile, I went to visit a relative in the hospital and all the computers are running Win2k. If you look at OS share online, WinXP still dominates. Nobody really knows what's new in Office 2010, except you can read Office 2010 files and that ribbon thing. China was a total disaster for Microsoft too. They even shared their source code and it's only 1 percent of their revenue.
Meanwhile Apple and Linux really got their act together and improved massively. Then the 3g and portable device boom happened and Microsoft was caught with Windows Mobile, in the face of Android and Iphone. They couldn't leverage their massive x86 code base and had to start over with a new OS from scratch. That's their problem, they have to start over on a new chipset and they just can't get anywhere meaningful without relying on the enormous barrier to entry that is the win32 api legacy.
Honestly, Windows 7 is pretty nice, I think that the developer tools, from a get it done perspective are some of the best available. Beyond this, I don't see much real benefit to windows over other systems in this day and age (beyond the compatibility, and massive software base). Most of the applications I use daily outside of work have non-windows alternatives, and for those left, there's always Citrix or Terminal Services. I think a lot of the management tools are easier to use as well. I actually see better use of windows in large corporate networks than smaller ones, and most home users not playing newer (resource hungry) games.
So, aside from the huge number of available applications, compatibility with older versions of applications, more polished system management tools for enterprise deployments, better support for newer hardware, for gaming, and the best security record in OSes for the past couple years, I couldn't possibly see why someone who's informed would choose windows.
Apple tries it on but they simply don't carry the industry clout that say MS had/has, but the same tactics are shown on a more micro perspective. Granted all IT vendors pull the same crap. Its only when MS does it the ground shakes.
Not to me. Apple hasn't actually actively tried to destroy other companies yet.
Adobe? Amazon? Google (indirectly)?
And they haven't held back the industry for years (ie6, windows, office).
Because they haven't been a position too, but if they were with the product range they have/had, they would of held it back more. Limiting technologies to simplify them to be easy-to-use is primarily what Apple does. This simplicity has a weltering weakness, simple means less flexible.
They don't have such an important tie in (music is movable now, iphone apps aren't so important).
No, but they'd like to, iPad's marks an attempt at print media world. Using connections to Murdoch to help sell it.
They are still not dominant where it counts (desktop/laptops).
They are one brand among many, this wont change any time soon.
Apple haven't used dirty tactics to get what they want (threatening PC manufactures who included more than one OS).
No, they create FUD instead. http://www.apple.com/hotnews/thoughts-on-flash/. Their price gouging stint on Amazon is another.
Apple haven't done any of the abuses that Microsoft was convicted and let off for.
Microsoft got ass raped by the EU, but if you think about the SUSE incident or the Netscape battles, Apple does just as bad or is doing just as bad to Adobe at present.
Apple are big on the consumer side, not on the business side (mores the shame).
Because they simplify and limit things too much, their attempts at introducing things into the business world have been a failure because of the lack of versatility. Not to say Microsoft is the most flexible (I'm a Linux person) but it's considerably better.
Call me when Apple's PE ratio gets back down to 14 or so. Then maybe I'd buy it.
Apple's income last year $5.7B. IBM's income last year $13.4B. Apple's PE is 22, IBM's is 12. And IBM pays a dividend rather than back dating options for Steve Jobs
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There are no Windows fanboys, but there are people who hate OS X and Linux more.
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So what, you ask? Everyone thought Apple was dead a decade ago. Little did they know that Steve Jobs was merely pining for the fjords. And now he has reached the fjords and waved to Microsoft on the way by. Tie this in to Steve Jobs recent statement that he will reveal something surprising at the upcoming WWDC keynote, and this indicates that Steve Jobs will unveil a new product: the iFjord.
Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
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.
Really? Let's see:
Microsoft - Year ending December 31, 2009, Net Income $16.26 Billion on Revenues of $58.69 Billion
Apple Inc. - Year ending December 31, 2009, Net Income $7.477 Billion on Revenues of $42.05 Billion
According to you, if Apple grew sales 100% per year for 5 years, over that period they'd earn $16.26 billion in net income on revenues of more than $1.3 Trillion. Let's assume Apple's net income remains 17.78% of revenue. On sales of $1.303 Trillion, they'd show net income of $231 billion, not $16.26 billion as you assert.
We're supposed to take any part of your post seriously? You're spouting bullshit in such an authoritative manner you'd be right at home behind the anchor desk of Fox News.
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/
Last year, Exxon made about 2.5 times the profit of Apple, and had about 8 times the revenue. They also pay a nice dividend on their stock. How Apple is valued so close to Exxon really is a mystery. You need energy to live; mp3 players and iPhones? Not so much.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Good luck with that. Apple's been a growth company for the last decade and seems to intend to remain so. IBM isn't a growth company, it's in utility mode for more than 20 years turning good dividends but not trying to take over the world. As a result, Apple has more cash on hand today than 3x the entire value of the company 10 years ago and no debt. As a growth company that doesn't dominate most of the segments it's in, Apple's upside potential is huge.
IBM is still a strong conservative investment for folks who want to be confident their investment will grow into enough of an asset to retire on - especially if they reinvest their dividends.
There are several modes for companies, but Growth, Utility and Salvage modes are the commonest. In Salvage mode the folks with the most influence in the company get what they can out of it, and to hell with the common investor. This subsector of corporate governance is quite interesting for the morbidly curious. For companies that have achieved the heights we're talking about it turns into a freeding frenzy where a school of lawyers turn into a feeding frenzy of zombie sharks. It becomes a cancer that affects every company the giant ever touched. The lawyers eventually take conditional fractional options on the success of hopeless suits against unrelated third parties, because what else are they going to do with their idle time - work?
Growth companies pull more PER because they're agressive about growth. Duh. You want some of those in your folder if you're going to retire with something more in your retirement account than you put in.
Microsoft though? One big dividend ever on Bill's retirement from CEO (Coincidence? I think not.), and some symbolic trivial dividends since. Microsoft isn't managed to be a good value for all investors - it's managed to be a good value for a specific set of five investors, all of whom have incidental investments in related companies and who are incidentally on the board of directors. It's clear the company isn't managed for the benefit of the common investor.
Q: If a public company like Microsoft's Board of Directors chose to offload all of the value of a company onto affiliated companies in unwise for the company but wise for the boardmembers deals, how long would it take? A: an afternoon.
Q: How likely is this to happen during the course of my investment? A: Follow the money. Nature abhors a vacuum.
Q: If this huge value transfer happened how soon would it be public information? A: Several months later.
Help stamp out iliturcy.
Their profit margin is around 20%, which is insanely high for a hardware company. For comparison, Dell's profit margin is under 3%. Microsoft's may be around 30%, but Adobe's is over 10%, so Microsoft's margins are only a bit higher (factor of two or three) than is normal for a software company, while Apple's are around ten times those of the rest of their industry.
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