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Apple Passes $300B Market Cap, 2nd In the World
An anonymous reader writes "In May, Apple surpassed Microsoft in market capitalization to become the second largest company (by that measure) in the world. Today, with its shares riding high, Apple passed $300 billion in market cap, entering a club of two along with the still-gigantic ExxonMobile. And investors' targets could bring Apple beyond where Exxon is now (though Exxon continues to soar as well). Perhaps Wall Street is catching on that, despite the discontinuation of their underused Xserve, Apple is in fact becoming one of the key tech providers to enterprise, a position that even a year ago seemed laughable. If you consider the iPad to be a PC (which enterprise increasingly is), then suddenly you realize that Apple is expected to climb to 12% market share in 2011. Plus, of course, they have those little things called iPods, and iTunes..."
"We have to let go of the notion that for Apple to win, Microsoft has to lose." --Steve Jobs
All Apple had to do was stop trying to climb the fence to play in Microsofts yard, and apply some ingenuity to marketing and manufacturing. They've done well in these regards. You don't need to be an iFanboi to tip your hat here.
Apple will never replace Microsoft in the workplace, because they don't want to, there's not nearly as much money in it as replacing Microsoft in the home.
There's a spot in User Info for World of Warcraft account names? Really?
Buying stock in a company that doesn't pay dividends is just gambling - you're buying in the hope that you can find a chump who'll pay more to buy it off you at some point in the future. You can only make money by selling the stock. Apple isn't unique in this regard: most major tech companies and oil drilling companies don't pay dividends. But to me it just looks like a house of cards. You're just gambling on investor confidence in a company.
Market capitalization is only one metric. There's also gross revenue (which Wal*mart wins) and net profit (which Exxon wins again). At current prices, AAPL still seems a bit overpriced compared to its peers.
High market capitalization doesn't mean anything other than people are interested in owning a piece of this company. It doesn't mean that the company is successful, or even profitable. It's a common fallacy (some would argue, THE common fallacy) that stock price has anything to do with the underlying company's intrinsic worth.
It's the same problem that sacked the mortgage market. The system is set up so that the bits of a company, called stock (or the mortgage) are entirely unconnected to the supposed underlying item of value, which is the company itself (building, property). With the stock market, people don't expect company dividends (anymore), and, even more bizarre, the supposed owners of the company aren't liable for any company crimes. Market capitalization is as meaningful as Twitter trends are.
That being said, it's interesting from a purely social point of view.
I don't respond to AC's.
Especially fanboys.
At least in 2009 (I haven't looked up 2010)
The Blackberry phones outsold iPhones (revenue and units sold) and as usual, Nokia dwarfs them all (in market share).
Granted Apple has done quite well in the MP3 player market, and with its excellent profit margin it is certainly an extremely successful company. But let's compare Apple (market cap $296 billion) to Exxon Mobil (market cap $377 billion).
Exxon Mobil's 2010 profits of $19 Billion on $285 Billion in revenue completely dwarf Apple's 2010 profit of $6 billion on $36 billion in revenue. Granted Apple has a higher profit margin than Exxon Mobil, but in 2009 Exxon Mobil's profits were greater than Apple's revenue.
Both companies are certainly successful, but I suspect Apple's stock price has more to do with its image than its value.
> Why does someone have to be a "chump" to pay more for it?
Because they're not actually going to get any money outside of selling the stock to someone else (see also: "no dividends").
> Those earnings... do you realize they belong to the shareholders even if they just accumulate in the company's bank account?
Unless the company loses them, gets sued, goes bankrupt, spend it on a foolish merger with a company that has lots of debt, is involved in fraud, bad accounting, and lots of other risks I can't think of right now (see also: Enron & anyone who invested in all those bad mortgages but didn't get a bailout).
In short, money in your pocket is worth more to you than money in someone company's bank account.
> Dividends are a "feel good" disbursement for companies that aren't supposed to grow.
So why didn't my portfolio of properly diversified assets with *good* P/E ratios collapse when everything else did? You remind me of the guy saying that the Dow would hit 20k before the crash. This news proves on thing to anyone sane: Apple stock is massively over-valued. But it's going to stay that way, Wile-E-Coyote style, until the masses realize that, too.
> If you want to invest in dividend paying companies go for it.
You're right that dividends aren't the only or even the best measure of value, but they're still a good one. And there's no question to me that Apple is over-valued. This is the time when smart people get fearful (Warren Buffet: "when people get greedy, be fearful; when people get fearful, be greedy" ... we're in "fearful" territory with Apple's stock). But that's just me. Any holding I have in APPL is probably part of some mutual fund and I couldn't rightfully tell you how much, if any, I have of their stock.
P/E for Apple is actually not all that high. What you are overlooking is that Apple's valuation is so high because they are doing great in :
a) media sales
b) portable music player sales
c) smartphone sales
d) laptop sales
e) tablet sales
The thing is that Apple has a lot of products in very new and rapidly growing markets. If you think about pretty much any one of those categories and think about room for growth, you'll realize the apple share price is still pretty conservative.
Oh, and don't forget about the massiv Apple cash reserve which they've not even deployed to any great extent.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Where does security, stability, and manageability fit into this?
The thing is, those were never really that distinct from consumer needs. We have all seen what happened when the "enterprise grade" Windows was used by the world. It's pretty obvious the enterprise for all the bluster doesn't ACTUALLY require the level of security you call for, as much as they might wish for it.
Of utmost importance for enterprise users is security. It seems that Apple often botches this. Consider just the security problems with iPhones that have been discovered in the last year. We learned that iPhone email security is farcical and that their on-disk encryption doesn't really work
If you read to the bottom of your own link, FDE works in iSO4.x. The device is properly encrypted, and can be remote wiped as needed.
It's as good as any other device out there; better than most and I would argue better by far than Blackberry since company data doesn't have to go through a RIM server.
Dependability, too, is often not a feature of their products
Oh right, that's why the Apple consumer product ratings are so high. Because they are so "unreliable". Well sir then please explain how so many companies stick with POS Dell boxes that fail if you sneeze and sometimes if you don't. I know, I had to deal with them for years on end.
Your whole post is just so much trolling a view of Apple from way back in 2005 or so. It ignores the very real use of iPads across the enterprise, the substantial management features and Microsoft integration in place today. In short, it totally ignores the reality of modern IT departments and the needs of business units in real companies.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
If you mull it over, you'll realize that consumers actually require a HIGHER level of security than do enterprises. Enterprises can afford to be a little lax because they have full-time people dealing with security issues that arise, and maintain boxes.
Consumers have noen of that; they have only themselves. Would not the blood of any corporate IT manage run cold at the thought of a system that had to be maintained by a user, for years on end? But that is exactly what happens with hundreds of millions of consumers. Computing devices aimed at them must be FAR more solid and robust than any product targeting an enterprise, if they are to work well for any length of time.
Furthermore employees are a lot easier on equipment than a home user, a home user moves stuff around and takes it with them. Office equipment generally vegetates in one location, and is handled with more care.
And that is why the enterprise is starting to adopt Apple gear, because Apple has had to build software and hardware secure and robust enough for real world use, not coddled managed enterprise land. In the end business people want solutions to work and it simply cannot be overlooked anymore that Apple gear is providing real solutions that work for everyone.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
A friend asked me to help get their new Christmas MacBook Pro to print photos with a 8-yr-old Canon printer. First, I go to the Canon website looking for drivers. Canon doesn't have them for download for that model anymore, though, not even for Windows. Googling finds the 'download-driver' websites offering drivers...but they are for older OS versions and won't download without the obligatory 'signing up' etc. Frustrated, I plug the printer usb cable into the macbook and expect to see a pop-up screen about finding new hardware and where should it look for a new driver but...nothing. Click through to 'printers' and...it says the printer is not only recognized but ready to print. Yeah, sure. Click on the iPhoto app and select 4x6 borderless print and...in a few seconds out pops a beautiful print. I'd been so conditioned by the Windows way of doing things that I expected it not to work with OS X 10.5. What does this have to do with the TFA? Only that Apple has got it going on right now. Someone else might beat them but it won't be because Apple wasn't offering good products...the someone else will have to be offering much better products and that is going to be very, very difficult to do.
MS has a very small, nominal, holding in Apple and several other tech companies. They sold the $150Million in non-voting stock as soon as they were allowed (around 2002 IIRC). The punitive purchase was in settlement of the IP suit Apple had against MS for using Quicktime code in Windows. Jobs, on his return to Apple, wanted to clear the decks of all the cross-suing between Apple and MS.
Does anyone else remember when AOL had a market cap of $222 billion, because the Internet was the new big thing and AOL, with its acquisition of Netscape and Time Warner, was sure to dominate that space forever?
http://money.cnn.com/galleries/2010/fortune/1002/gallery.biggest_losers.fortune/8.html
Yeah.
If Steve Jobs so much as sneezes Apple loses 20 percent of its market cap. Not because he's so essential, but because investors want to get out ahead of the gigantic Hype bubble deflating. We've seen this before. When will people learn?