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Apple's Market Cap Exceeds Google's
Posted by
samzenpus
on Thu Aug 14, 2008 02:45 AM
from the big-apple dept.
from the big-apple dept.
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.'"
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Well let's just be honest here (Score:5, Insightful)
Re:Well let's just be honest here (Score:5, Interesting)
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.
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Re:Well let's just be honest here (Score:5, Insightful)
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.
They are probably worried that this fact will detract people from buying Macs. The simple truth is that people buy the computers and other hardware despite this fact, even first time buyers. While you could save a few bucks by going elsewhere, it isn't always about saving money.
To bring in the car analogy: people still buy Mercedes cars, even though you probably get just as much out of a Honda. It is the seemingly unimportant things that make a difference.
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Re:Full disclosure: I'm a Mac user (Score:5, Informative)
Huh? It's right in their 10-Q [edgar-online.com] under Operating Expenses.
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Re:Full disclosure: I'm a Mac user (Score:5, Funny)
Is "shooting from the hip" a euphemism for "making shit up to sound correct" or "spreading bullshit to suck apples dick"?
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Re:Full disclosure: I'm a Mac user (Score:5, Funny)
> So, you're a fan of plastic crap, as long as it's not overpriced
Yes, indeed! I have a flock of pink flamingos on my front lawn that I got from the dollar store! wooooooooooooo!
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Re:Full disclosure: I'm a Mac user (Score:5, Insightful)
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Re:no research to speak of (Score:5, Interesting)
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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Re:Full disclosure: I'm a Mac user (Score:5, Interesting)
Since we're shooting from the hip... :)
In my case, I "root" for Apple for two reasons:
1. More money means they will have plenty of money to make more cool shit.
2. I was a Mac user back when they almost folded, and it sucked. I wasn't sure if I'd be able to buy a Mac the next time I needed a computer, and software makers started to abandon the platform. In fact, I bought a PC instead of a Mac during that period because Apple looked done for and the OS had stagnated.
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Re:Full disclosure: I'm a Mac user (Score:5, Funny)
I hereby announce that henceforth I will self-identify with Advanced Machine Parts Co.Ltd. of Fort Wayne, Indiana.
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Re:Full disclosure: I'm a Mac user (Score:5, Informative)
With Dell it is always "devil in details."
Apple has the "attention to details" thing on their product development plan.
I understand that most geeks only look at specs.
But I also consider day to day routine important. And for many things Macs with Mac OS X are magnitude better compared to Dell with Vista. Devil in details, so to say.
Point is, newly bought Mac is ready out of box for average Joe Six-Pack. Newly bought Dell with Vista has to be brought to your geek friend to make out of it something the Joe Six-Pack can use.
You can't like Dell - because it is albeit useful but only a tool. But you can like Apple products because they are made to be liked. And they are also useful. That's why I can easily imaging that some people might get religious over stuff which "Just Works" (c).
P.S. To be frank, I have seen the Macfanboism only in US. US is in particular over-religious place. People get there religious over different things all the time. Apple is literally religious about making good stuff, so some people start following: and it is only logical.
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Re:Full disclosure: I'm a Mac user (Score:5, Funny)
The rootkit generates much erratic behavior. Known system calls trigger repeatedly are abstinence(), shutthefuckupandobey(), and, most importantly, iBelieve().
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Re:Full disclosure: I'm a Mac user (Score:5, Informative)
Point is, newly bought Mac is ready out of box for average Joe Six-Pack. Newly bought Dell with Vista has to be brought to your geek friend to make out of it something the Joe Six-Pack can use.
Having set up Macs for my family, I have to say: that's a myth. Macs do not come with all the software people need, and finding and installing that software is something "Joe Six-Pack" can't do.
That's why I can easily imaging that some people might get religious over stuff which "Just Works" (c).
Macs do not "just work"; that's a marketing fiction created by Apple. They do work a little better than Windows, but that's a far cry from "just work".
But you can like Apple products because they are made to be liked.
Yes, that they are. They look nice, they have nice themes, the sound nice, and they are nicely packaged. And Apple has successfully created an association in people's minds that their machines are easy to use and are the right choice for smart people who have better things to do with their time than fiddle with computers.
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Re:Well let's just be honest here (Score:5, Insightful)
That's just it if you bought an HP you would have the exact same problems if you spent the same amount of money.
You want a really high end notebook your going to shell out for it one way or another.
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Re:Well let's just be honest here (Score:5, Insightful)
Why would you hate Apple?
They have succeeded with products that people want to pay for.
They have contributed much to the open source community.
They have raised the bar for software/hardware technology in general.
They give developers a great platform for either open source development or Mac development without charging for developer tools.
They have created an exceptional market for independent developers to make REAL money writing for the iPhone.
I guess Apple is bad because they make money.
Mod this guy up to a ten.
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Re:Well let's just be honest here (Score:5, Insightful)
And right now, Macs are the wedge in the door of the Microsoft stranglehold. Linux might slip in, but it's Macs doing the ramming. For example this report [4sysops.com] puts Macs at 7.9% and Linux at 0.8%. Maybe it's envy that Macs are so popular, but it's stupid. I've very long been a fan of Opera the web browser, but it got a lot more pleasant when we passed 10% "not IE" due to Firefox. I'm quite certain that running Linux as I am will become a lot more pleasant if we pass 10% "not Windows" due to Macs. The positive thinking rrowd could say it would promote cross-platform solutions. The machiavellians can say it's divide and conquer. In any case, Macs are good for Linux. Including shamelessly copying the good parts while still letting you run xfce if you want...
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Re:Well let's just be honest here (Score:5, Informative)
I see you worship at the church of Apple.
Or, maybe he provided a well thought-out list of specific, quantifiable, verifiable reasons why Apple is a company worthy of respect. You might want to go re-examine "worship" in the dictionary. (Hint: It does not mean "someone who disagrees with me.")
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Re:Why I hate Apple (Score:5, Interesting)
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.
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Re:Why I hate Apple (Score:5, Insightful)
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Re:Well let's just be honest here (Score:5, Funny)
how did the weight and build quality of the two machines compare?
I took apart a HP laptop, and it was made of components (transistors, capacitors, circuit board, gold linings and such), you know, the boring usual result of the miniturisation process. When I took apart a Mac, I stumbled upon a world was full of little elves and unicorns who were playing on rolling green hills surrounded by snow-tipped mountains and fields of beautiful flowers that danced in the wind like a Russian ballereena. There was also a rainbow or two there as well.
The HP laptop was surprisingly a little bit heavier, but that's to be expected. Mactops were sprinkled with faerie dust for taking off most of the weight.
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Not too much of a shock, really. (Score:5, Insightful)
Not really a shock.
One company's based on ubiquity and mindshare. The other's the same though less so, but actually retails physical items.
Re:Not too much of a shock, really. (Score:5, Funny)
Well then, it's a good thing Apple doesn't have a company image largely leveraged on hype.
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Re:Not too much of a shock, really. (Score:5, Insightful)
You're right, a company that sells services rather than goods can never be sustainable in the long run. That's why all power companies, telephone companies, cleaning companies, shipping companies, security companies, doctors, lawyers, and accountants all went out of business decades ago.
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Re:Not too much of a shock, really. (Score:5, Insightful)
hence the command: "DO NO EVIL!"
Google's motto is "Don't be evil". The difference is subtle but significant.
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insane (Score:5, Insightful)
How can a company with $24B in sales, $3B in profit, and $40B in cash and assets (2007 figures) have a market cap of $160B?
Re:insane (Score:5, Insightful)
Because in today's economy, the worth of a company isn't what it is, but what it could be. Or rather, what analysts expect it to become.
And when analysts don't know jack about what they analyse and assess, you get a dot.com bubble.
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Legs to stand on (Score:5, Insightful)
Well, when you factor in a rapidly growing computer market (for Apple) with lots of growth potential left, a rapidly growing music market with lots of growth potential, a rapidly growing smartphone market, a rapidly growing mobile applications market...
And so on.
The thing of it is, Apple can still miss in a few categories and still have tremendous room for growth. They have many legs of stability holding up their table of success (I daresay that's the most awful metaphor you'll encounter this week).
The market rewards innovation, mindshare, and success. Apple has all three...
If after that you are still mystified - buy mutual funds.
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More... (Score:5, Insightful)
How about this....
What business is Harley Davidson in? Not Motorcycles. They're in the image and fantasy business. Middle aged professionals buy them and pretend to be careless free spirit rebels on the weekends and then on Monday, they're back to being the Sam the accountant or lawyer or engineer. I saw quite a few "bikers" with their Harley Davidson logo'd leather attire (huge business for Harley!) and Rolex watches. Real motorcycle enthusiasts, from what I'm told, prefer BMW or something Japanese: Harleys are junk.
What business is McDonald's in? Business process. When someone buys a franchise from McDs, they're buying a way to do business and a name for the burger joint that they open.
Estee Lauder was famous for saying that she was in the business of hope not cosmetics. She sold women the hope that they can look young and beautiful like her models.
My point is that if Apple were a computer company, they'd be making the crappy margins that Dell and the other PC makers are making.
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Re:More... (Score:5, Informative)
>McDonald's food sales compare with the profits from the sale of its unwanted real estate and so on.
Ray Krog is on record as stating that McDonald's core business is PROPERTY - not burgers. As he put it: everyone I ever met can make a better hamburger than McDonalds- none of them are rich though.
What McDonalds did so well was to let you finance the cost of the franchise (with it's massive brand recognition and marketing power) by using the bond on the property where you wanted to put it. The result is that McDonalds corporation now owns many of the most valuable street corners in all the biggest cities in the world: and that lets you finance any other investment you care to make. When the franchise no longer works in the region (it became less residential and more commercial as an area) - you can rent or sell out the property you got there at massive profits over the cost of giving somebody a franchise there ones.
If the franchise never fails, you ultimately end up earning not only repetitive franchise-fees but rent on the property as well !
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Re:insane (Score:5, Informative)
Most companies trade at a P/E much, much greater than 1. Historically, a P/E of 14 counts as "fair value", the point considered neither high nor low. For comparison, the average for the tech sector as a whole varies over time between 40 (at the height of the bubble) and 25 (currently in that range). Apple, at 35, falls a bit higher than its sector, but not so much that you'd call it extreme.
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Re:insane (Score:5, Interesting)
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.
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Re:insane (Score:5, Insightful)
But businesses will never drop Wintel. Never.
Just like they would never leave IBM?
In the last 5 years, I have seen significant uptake in Apple computers in the corporate world, from small to large. I work for a fairly large financial services firm and all of our Unix/Linux admins have Macbook Pros. And they are spreading to other groups as well.
Never say 'Never'!!
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Re:insane (Score:5, Informative)
I would be more worried about an economic recession taking away Apple's market, but if that happens then any stock you choose will be toast.
Lousiest piece of economic advice I've heard today. A recession means a great shift in consumer demand where high-margin "fashionable" products to low-margin "cost concious" goods across the line, both in terms of what products people buy and which products of a given type. If you don't see how that'd affect some stocks way more than others, you should really stay out of it.
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Re:insane (Score:5, Informative)
How can a company with $24B in sales, $3B in profit, and $40B in cash and assets (2007 figures) have a market cap of $160B?
You used the 2007 figures of $3bn profit. The last figures are $4.6bn profit for the last year. That would be 50 percent growth, which is the key factor. Someone posted that you'd need 53 years to make $160bn if you make $3bn profit a year. Obviously we would need to subtract the $40B in cash and assets firsts, leaving $120bn. And divide by $4.6bn per year, making it 26 years which is about equivalent to 3.9% interest per year. But now we have to factor in the growth: If Apple managed the same growth for the next three years, then profit could triple and the 3.9% interest goes up to 12%. That is why Microsoft is valued so low: Because the market doesn't expect any growth anymore.
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Re:insane (Score:5, Insightful)
But even then: say I bought all of Apple's stock. If I relied on dividend alone, it would take me 53 years to make a profit on my investment. The only way I could profit in the short term is by trading the shares. It's devolved from a long-term profit projection into a pyramid scheme, IMO.
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Re:insane (Score:5, Insightful)
...it would take me 53 years to make a profit on my investment.
Given it's been 13 years (Nov-1995) since they last paid out a cash dividend it's going to take you a lot longer than that! They use the profit they make to re-invest and increase shareholder value. In the last 4 years alone the share-price has gone up by a factor of 10!
Seriously though, market valuations are very much based on market sentiment and prediction of future market sentiment based on projected company performance, i.e. how people "feel" and expect to "feel" about the company. It's messed up but its how the market seems to work.
It's better to look at relative performance of various companies to gauge whether prices are sane. Google's P/E (price/earnings) ratio (~30) is still high compared to other mature tech companies, which can be translated as meaning that Google is still expected to grow pretty quick, it's just that Apple (~35) is expected to grow slightly quicker.
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Re:insane (Score:5, Insightful)
Actually, money is just a marker for value and worth. It is true that more money then value or worth can exist and cause an inflation scenario. But as long as people are creating value and worth (lets call it wealth from here out), they are creating money. This is especially easier to do with the banking systems in place that allow loans from debt.
And no, the total amount of money isn't limited. Well, it is but not buy an arbitrary number of printed bills and coins. It's limited to the amount of wealth in circulation which is why factors like the GDP and so on are so important in gaging a countries wealth. It is also a main reason why the easiest way to spur a stagnant economy is to lower taxes and capitol gains rates.
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Yes (Score:5, Insightful)
The stock market is a mechanism by which monetary inflation is captured and transferred to the wealthy.
HTH
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Re:Yes (Score:5, Funny)
I should add that Boston Market is a mechanism by which saturated fat is captured and transferred to the obese.
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On the one hand ... (Score:5, Interesting)
... 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?
Re:On the one hand ... (Score:5, Interesting)
I'm unsure. It all depends on whether Google will continue to attract the best heads in the business and continue to be able to use their talents in the best way possible. If their profits slip significantly, shareholder drones might insist on cutting costs..
Then again, will Apple manage to maintain and refine their secret sauce when Steve Jobs is gone?
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Re:On the one hand ... (Score:5, Informative)
Google provides services for free?
You've got the model backwards. *You* (and I) are the products Google is selling to advertisers. The freebies are just fluff to keep the product happy.
It's a fair model, and I sound more cynical than I actually am, but it's worth remembering in any dealings with companies like Google.
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Re:On the one hand ... (Score:5, Insightful)
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Roller coaster stock! (Score:5, Interesting)
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.
Other market cap comparisons (Score:5, Informative)
Apple is also larger than oracle, sap, and cisco, and nearly as large as IBM. The only tech company larger than Apple by any significant margin is Microsoft; but even then, Apple is more than 60% as large as Microsoft and is growing considerably faster.
Re:Other market cap comparisons (Score:5, Interesting)
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
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Re:Other market cap comparisons (Score:5, Interesting)
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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Too be fair (Score:5, Insightful)
A little over ten years ago, liquidating Apple would have made sense, whatever else I might think about the company and the products, Jobs is a fucking miracle worker, and we need more business leaders with his ability (if maybe not ethics).
Re:hardly a meaningful measure (Score:5, Interesting)
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.
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Re:Google (Score:5, Funny)
yeah, the beta version has a known bug... it bytes.
*ducks*
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