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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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Apple's PE ratio is also 2x of MSFT, Walmart, IBM, GE, XOM etc...
Looks like an excellent bubble to take advantage of. Sell (or short) Apple, buy Microsoft.
The thing is, with near 10% unemployment and having just come out of the worst financial crisis since the great depression, Apple is doing well.
If a company that specializes in expensive, high-end computer products is doing well in a weak economy... what happens when the economy improves?
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.
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.
I see your point, but I'm not sure the current situation is analogous to the dot-com bubble.
Apple's stock has little momentum. It's not in a bubble in the classical sense. Apple's earnings ratio (20.6) is reasonable given their earnings growth of the last few years. Although Apple's stock has a higher earnings ratio than Microsoft's, that's because of anticipated future earnings and not fanboys driving up the price.
Here are their actual profits, from finance.yahoo.com, as of today:
MSFT:
Net Income Avl to Common (ttm): 17.29B
AAPL:
Net Income Avl to Common (ttm): 10.81B
If Apple grew their profits by 100% for even a single year, they would surpass Microsoft.
I don't entirely agree.
Don't get me wrong, Apple could easily collapse in value. Not because they're in a bubble, but because they make profits from having cool/aesthetic/etc products. But cool is fleeting. As a result, Apple's profits are less certain than Microsoft's. If Apple puts out a few crappy products, their stock will drop like a rock. On the other hand, if Microsoft puts out a few crappy products, people will buy them anyway, and Microsoft will just release a new version in a few years.
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?
On the other hand, if Microsoft puts out a few crappy products, people will buy them anyway,
What do you mean "if"???
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.
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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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/
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'.