Apple's Market Cap Exceeds Google's 689
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.'"
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.
Full disclosure: I'm a Mac user (Score:4, Interesting)
The problem is there's a few things at work there:
1. Apple seems to have accumulated a cult-like following of people who self-identify with the corporation. It's weird.
2. Apple only competes in high-margin markets, where they often are price-competitive.
3. Apple doesn't disclose internal costs like R&D.
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.
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"?
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!
Re:Full disclosure: I'm a Mac user (Score:5, Insightful)
Re:Full disclosure: I'm a Mac user (Score:5, Insightful)
Just like the "usability" argument that Mac users like to trot out died about 13 years ago......
Spoken like someone who hasn't been to a usability or UI design conference... ever. Apple designed UIs are the gold standard of the industry, including the OS X interface. It sure isn't perfect and experts discuss the flaws regularly, but compared to everything else out there it's not much of a contest.
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.
Re:no research to speak of (Score:4, Informative)
Where the iPod won it from the competition was ease of use.
Something like an iRier might have more features, and better specs, but have you ever tried to use one? I have.
I got my first Mac a year ago, but the first time I used one was in 1997 and after that I knew I would end up on a Mac eventually.
It was the time of win3.11 and win95, winNT4, (and I think Mac system7). I was at university and helped a lot of people with their computers. I was used to first having to "figure out" someone's computer before I could help them.
I also did some DTP work. At one point my computer couldn't handle what I was doing, and I ended up finishing my project at a professional DTP firm, who happened to also have QuarkXpress but on a big powerful dual head Mac. I was productive from the get go, and if I needed something, it would just be where I'd expect it to be and work intuitively, even outside the software I had experience with on Windows. At that point I understood that Apple is just miles ahead of the competition in UI design.
They are just very good in removing all things from an UI that you don't really need. Some rarely used options and a reduction in choice comes with that, but I'll do without an optic output for my digital music player if it means I have an interface that is easy to use.
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.
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.
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.
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().
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.
Re: (Score:3)
And with the exception of a small (but obnoxiously vocal) minority of computer users, the phrase highlighted above in bold describes the computer-using public. The computer is a tool for most people - a means to an end, not an end in itself. If you're a carpenter, is what you do best desc
So what? (Score:3, Informative)
Every dollar Apple makes, whether its revenue or profit, is a dollar that doesn't go to Microsoft.
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.
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.
Re: (Score:3, Insightful)
your post used the word probably, which means you havent bothered to get off your ass and back your argument up with facts.
try that first.
last time i saw _comparably_ equipped mac vs pc pricing, they were at least equal.
dont try to make the claim that some entry level loss leader is equivalent to a macbook pro.
Re:Well let's just be honest here (Score:5, Informative)
Can't resist a challenge!
Mac Book Pro 15":
Black Case
2.5 GHz C2D
2GB RAM
250GB 5400RPM SATA HDD
15.4" Screen, 1440x900, LED backlight
8x DVDR/CDR
Wireless-N
Bluetooth
Dimensions: 1"x14"x10", 5.4 lbs
Price - $2500
Dell Studio 15:
Black Case
2.5 GHz C2D
2GB RAM
250GB 5400RPM SATA HDD
15.4" Screen, 1440x900, LED backlight
8x DVDR/CDR
Wireless-N
Bluetooth
Dimensions: 1"-1.3"x14"x10", 6.1 lbs
Price - $1269
So the Dell is slightly heavier, and slightly thicker at one end, but costs basically half the price. Every other spec I could find is equivalent.
Re:Well let's just be honest here (Score:5, Insightful)
OK. I don't normally swear on /., but this is bullshit.
And I don't normally reply to posts replying to mine, but hey - yours is special :)
First, the $2500 MacBook Pro you price has a 512MB video card, an option that is not available on any of the Dell Studio series. You should be comparing to the $2000 Macbook Pro, which has the 256MB video card
OK, fine, the graphics cards are different - my mistake. $1200 different? If you say so! But whatever, if you want to use the $2000 Macbook Pro that's fine, just add the $50 for the HDD upgrade. But then we only have a 2.4GHz cpu, so the Dell is now faster and still something like $800 less.
And once you include things like Wireless-N to match the Mac
Did you even read my post? It was a pretty easy to comprehend list. Wireless N was already included in my price.
and the Ultimate version of Vista to match OS X,
OK if you insist, add $150 for Vista Ultimate (wouldn't we be installing Ubuntu anyway??). Now we're down to $650 difference.
And most Mac users don't buy RAM from Apple
So Apple overcharge? Say it isn't so!! I thought that was the whole point of this discussion :) Regardless - 2GB is the least you can spec on these machines so your argument is redundant.
And then you end up paying more to Dell for a backlit keyboard, camera etc
$50 for the keyboard (didn't see that), camera is included. Now we're at $600. Keeping count at home?
OK, so the final tally by your specs (some of which I don't agree with - such as Vista Ultimate) still has the difference at $600 for a $2050 Macbook Pro. That's what, 30%? Quite a markup (particularly as with your spec I have to have the case in white, Dell let me choose!). I personally don't think magsafe is worth that much but YMMV.
But dishonest exaggerations like yours are just stupid.
Pot, meet kettle.
Re: (Score:3, Informative)
SEK = Swedish crowns, or "kronor" in Swedish. 1 SEK is around $0.16.
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.
Why I hate Apple (Score:3, 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.
Apple is all about silos and locking in the user. Look at the iPod, iTunes and the iPhone for the best examples. It's a good business strategy for t
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.
Comment removed (Score:5, Insightful)
Re: (Score:3, Funny)
It is considered normal for some people to hate Microsoft, the PC, Budweiser, France or Hollywood, but... ... if someone hates Apple, a moral panic breaks out among its disciples. A call to arms is cried from the towers and the torches are lit to defend the faith by flame.
It's just a brand of gadgets ffs! Your mother wasn't insulted, your religion wasn't oppressed. Save your energies for a fight that really matters, such as flaming people who don't like starbucks or adidas.
Re: (Score:3, Funny)
absolutely :)
Nothing more dangerous than religious nuts with torches...
Re: (Score:3, Funny)
How about religious torches with nuts?
Re:Well let's just be honest here (Score:4, Insightful)
My biggest problem with Apple is their culture of silence. They very often don't even admit they have bugs that are talked about in forums etc (for example, pre 10.5 printing to windows printer shares were broken for a while).
This gets VERY bad when you start talking about security vulnerabilities.
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...
Re: (Score:3, Insightful)
That's a good point.. Because Mac and Linux is different, they can't take the same approach to developing a product as they do for Windows. I.e., a company could previously build for a Windows base. In order to pursue the sizeable non-Windows market they will need to design to standards because it's often cost-prohibitive to design specifically for Linux, Mac or the host of other non-Windows based devices coming online.
Re:Well let's just be honest here (Score:4, Informative)
I don't hate Apple, I hate their fanbois (Score:3, Informative)
As for raising the bar, which bar did they raise? Aside from prices, nothing was really raised at all. Their hardware is equivalent to what I am using, and their software can only compete on looks
Re: (Score:3)
Apple has decent products, but they are not as magnificent as many of the devoted users claim them to be, especially if you look at the value that they are offering.
If one were to conduct a no-bullshit trade study before making
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.")
Re:yes, let's be honest (Score:5, Insightful)
Apple is using a lot of open source code, and they have released some open source code themselves. But what have they actually contributed to the open source community? I can't think of any significant piece of Apple software that runs on any Linux distribution.
Apple has made very significant contributions to what is now Webkit, to zeroconf, to the shared BSD subsystem, etc. But you have a very real point. When Apple invents something from scratch and contributes it (like LaunchD) it is occasionally cloned, but rarely do developers take Apple's code and run with it. This is important, but ties into your next comment.
They have raised the bar for software/hardware technology in general.
With what? Quartz, HFS+, Cocoa, Darwin, and XCode do not "raise the bar" on anything. Apple fans like to point to USB, OS X, Bonjour, Quicktime, and similar technologies, but Apple's contributions there were either to adopt an existing standard that was coming anyway, or to take an existing technology, tinker a little with it, and release it under their own name.
Apple has raised the bar. They took many rough standards and turned them into powerful and usable tools (zeroconf). They introduced innovative UIs (dock and expose). They took old and crufty parts of UNIX and redesigned them (LaunchD, basic directory structure, ACLs). They introduced powerful technologies that are all their own (OpenStep, signing framework, system services).
Despite all this and despite their popularity, the OSS community has a lousy track record of adopting those technologies and ideas. Their still isn't a dock clone that has all the functionality of Apple's. There still isn't a major Linux distro that ships with a dock or expose working by default. None of the Linux distros I've used have successfully cloned Apple's ubiquitous application of zeroconf. No Linux distro has yet copied OpenStep or even tried for compatibility with OS X. If you talk to Linux on the desktop users (people who should know what the competition does) 99% of them don't even know what Apple's system services are and if you explain it, they eventually agree it is really cool, but way too much work for them to try to clone.
There are a lot of reasons for this state of affairs. In some cases Apple has not played as nicely as they could, with licensing issues and their culture of secrecy. In many cases Apple makes sweeping changes to optimize OS X for the desktop and there is no central authority in the rest of the OSS community to mandate the same or even develop a real consensus. In many cases, Linux developers are a lot more interested in Linux as an appliance or server and specifically don't want to make changes that will help for a desktop but may add bloat for other uses. In some cases the OSS community is simply ignorant of what Apple does because they don't use Apple products due to philosophical differences or simply because Apple is not as common as Windows.
Whatever the reason, my perspective is Apple gives and takes from the OSS community about as well as many other mixed contributors, but because they are working in the desktop OS space and because of the reasons above, their contributions are ignored by Linux on the desktop developers (which is the only relevant market they're innovating in). Apple has been pretty good about adopting useful stuff from Windows and Linux (virtual desktops, filesystem improvements, misc code) but while their are projects to try to clone some of Apple's new tech, for the most part those are small projects and they are not integrated into mainstream Linux distros. That's one of the reasons why gOS's adoption of the dock was both encouraging (yay OS X feature parity) and disheartening (poorly done with only a little bit of the functionality).
In short I think you're right that the OSS community is not benefiting much by what Apple has been doing, but I think that is largely the fault of the OSS community for not takin
Re: (Score:3, Interesting)
Personally I wouldn't rate them above Intel in "future profit expectations" or whatever to call them. I see Intels product as something harder to copy / worth more.
It's harder to compare with Google since I don't really see Googles product, yeah I know, ads, but well.. It's not something real =P
Vs Dell it's more understandable, Dell doesn't offer any unique, they don't have their own product so to speak, if Dell died someone else would make similar PCs with similar software and no-one would care.
But then I
Re:Well let's just be honest here (Score:4, Insightful)
how did the weight and build quality of the two machines compare?
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.
Re:Well let's just be honest here (Score:5, Funny)
Given the choice of OS X and Windows Vista, give me Vista any day. I know that's not a popular opinion on Slashdot or anywhere else on planet Earth.
Fixed that for ya.
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.
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.
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.
Re: (Score:3, Insightful)
It is probably impossible to find a person who has not done a thing considered "evil". Yet most people don't think of the whole population as "evil".
Reasons for doing evil things include being forced to choose between a lesser evil and a greater evil, or simply making mistakes.
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: (Score:3, 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?
Just taking wild guess here, but... long-term profit projection? Some investors look beyond the next fiscal quarter, you know.
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.
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.
Re: (Score:3, Interesting)
Money IS a pyramid scheme.
Face it : who gives out money ? The government. The amount of money printed is the inflation.
The total amount of money is limited. This means that when some people get more money, other people will have less money.
However, banks make the money that people have circulate around the system. This in contrast to most other pyramid schemes, where the bottom dwellers lost their part.
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.
Re:insane (Score:5, Informative)
Oh, no... Ron Paul is back.
Please take an entry level econ course, and convince Ron to as well.
The total amount of money is NOT limited. Wealth is not finite. Even if you DID hold the money supply constant, then the value of the money would simply go up as wealth was created.
Money is just a means to simplify barter. Don't get too hung up on it's "value". You shouldn't be holding on to piles of cash - especially not under the mattress.
Re:insane (Score:5, Insightful)
What you say is true in an innovating economy. However, the point Ron Paul makes is that because the government does NOT hold the money supply constant, there is a severe punishment to anyone who saves or invests their income rather than spending it through consumption. There is even a school of thought that gains more and more steam every year that the government inflates that says you should save next to nothing and spend everything, since (the school of thought says) you are more likely to be saved by the government's social programs than by trying to fight the government's inflation through retirement savings.
Take away the idea of inflation and replace with a 5% yearly tax on your savings accounts (of any type). Do you get it yet? It's the same damn thing (except worse since that 5% doesn't get fed back into the economy by the government).
Re: (Score:3, Insightful)
Some investors look beyond the next fiscal quarter
And rightfully so. A company's stock is its promise of profitability, and the shares are shards of this promis. Stock market are really places where people buy and sell promises. The valuation of these promises has thus everything to do with the future, and not the present.
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.
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.
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.
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 !
Re: (Score:3, Insightful)
It's because there is no fixed correlation between "monetary value of the company outside of the stock market" and stock price within the stock market. The price of a stock is set by the current collective opinion about what the future price of that stock will be - which itself can be predicted to be set by the collective future opinion of the future future price of that stock - if that makes any sense at all :)
Setting aside stocks which pay dividends, which can at least claim to have some definite value,
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.
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.
Re:insane (Score:4, Interesting)
ummm, no. Apple's stock is high because Wall Street expects Apple's stock to be ever higher in the future. Stock price is only tenuously connected with expected profits - it's speculation that drives todays market.
If iPods ever become uncool then Apple will make something else. People stopped carrying walkmans and wearing stonewashed jeans, but Sony and Levi are still with us today. 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.
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.
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'!!
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.
Yes (Score:5, Insightful)
The stock market is a mechanism by which monetary inflation is captured and transferred to the wealthy.
HTH
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.
Re: (Score:3, Interesting)
I don't know for sure but are share/stock options included in what a "market cap" is?
Options are not shares. Options are a guaranteed option to buy/sell a share. It's speculation on the rise/fall of the share value, without the ownership of the actual share itself. That's why options are cheaper and riskier than shares.
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?
Re:On the one hand ... (Score:4, Insightful)
On the other side we have Apple. They produce gadgets and computers, that do have quality, but also a lot of brand hype. And are very expensive.
If there is a recession coming up, people will soon find that they can make do with their old gadgets a bit longer, or go with the cheaper option.
Re: (Score:3, Insightful)
It really depends how much of Apple's target market is severely affected by a recession. Not everyone is affected equally.
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.
Re:On the one hand ... (Score:5, Insightful)
Re:On the one hand ... (Score:4, Insightful)
You nailed it. Saying Google isn't a real business is like calling your local TV station a sham.
That's a good comparison. Although Google seems to be more honest about it, and it's nicer to us than many TV stations.
Re: (Score:3, Insightful)
That's a good comparison. Although Google seems to be more honest about it, and it's nicer to us than many TV stations.
I find that a dubious assertion. Your local TV station is far more benign than Google.
1. They don't know everything about your browsing habits.
2. They don't know who emails you, who you email, what you email etc.. or your IM, your documents etc.
3. They don't know what products you prefer to buy, how much you are willing to pay for them (if you are using google checkout)
These are just some of the ways that Google could screw you over. An average TV station doesn't have as much information on you nor does it
What will Apple do with all their cash? (Score:4, Insightful)
Not only do they have an insane market cap, they also have tons of cash. The former means that it would be completely stupid to buy back shares with the latter.
So what are they going to do with that cash? Expanding the product line significantly would mean diluting the brand. Even buying / Starting a low end brand would have the same effect.
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: (Score:3, Interesting)
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
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.
Re: (Score:3, Insightful)
Top news story at 11: "Chair seen in orbit around Pluto"
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: (Score:3, Interesting)
To be fair, selling Apple off piecemeal would have been the right decision. The Jobs-Apple machine has completely replaced everything from that period (and earlier) from product line to store layout. The branding of Apple hurt iPod sales in 2001 but whatever branding was on it would have done just as well in the long run due to their new product lines. The success of the iPod's interface is largely the result of a contracted company called Pixo that any other company could have hired (as long as they had Jo
As a ~20 year Apple Fanatic (Score:3, Interesting)
Then we saw the awesome Second Golden Age, a.k.a. the Return of Jobs - something we never thought could come to pass. We got the G3 (a terrific processor for its time) and the iMac. Of course it wasn't all rosy, we also had the The G4 MHz stall and the MHz Myth. But since Jobs' return there have been few misses and many outstanding hits. The greatness of OS X returned the Mac to its original place of software technological leadership. The iPod was a game changer, and even those of us who were among the hard-core Apple faithful never predicted what game changer it would prove to be in short order. And yes, the Intel defection proved to be (despite my anger toward it) a galvanizing force behind Mac platform growth. Now we have the iPhone (and iTouch) platform making history in its own right.
Apple has successfully captured so much market share in the last few years, people who will not likely return to the non-Apple world. Yes, the company is probably moderately overvalued right now, but with such growth and market saturation, a high valuation is sensible as long as the broader market can sustain recent rallies. Look at the iPhone sales estimates and then think about Apple's valuation. Google is a great company - unquestionably so - but it's an Internet property that can be replaced by a simple click of an address bar if a superior solution becomes available. (I'm not trivializing Google's place in the market but rather pointing to the fact that Internet leadership can change in quick order with disruptive technologies.) Not so with Apple, which isn't just a creative hardware vendor nor just a leading software producer, nor just a cultural business icon, but all that and more put together.
The only real question is, going forward, how long will Steve Jobs continue to lead the company. For he has always been the driving visionary force behind Apple's success, and without him Apple's value would take a substantial hit. I wouldn't want to be an AAPL share holder on the day he announces his retirement. Until then though, one can make a lot of money by buying Apple toward the bottom of market lows and holding on for almost inevitable new highs.
Re: (Score:3, Funny)
AAPL actually hit $3-4 at one point in the 90's.
I really need to know now: did CERN invent a time machine or not?
This just in... (Score:3, Insightful)
News at eleven.
Re: (Score:3, Informative)
With 160B cap and 3B profit, and assuming a dividend share of 50%, you'd get less than 1% of your stock's value in dividend. That's not much.
Re: (Score:3, Informative)
How much stock you own is completely irrelevant, 1% of one share and 1% of 1,000,000 shares is still not a lot in comparison to the VALUE of the shares.
Re: (Score:3, Funny)
You're too kind, I would have tried to sell him a bridge.
Re: (Score:3, Funny)
First, you don't know how much stock I own.
Second, 1% is infinitely more than 0%.
Then sell 1% of your shares. There's your dividend.
Do you know there are companies that pay dividends in shares? I'd consider that the biggest con ever, if I didn't know the stockmarket pulled much weirder shit every day.
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.
Re: (Score:3, Funny)
...or possibly their own foot.
Re: (Score:3, Informative)
Re: (Score:3, Insightful)
No it is not. It puts Apple's current success into context: it shows that it has been a tremendous turnaround of a company that was once - in the estimation of the very successful businessman, Michael Dell - ready for the scrapheap. It shows the turnaround has been so successful that it has even surpassed Michael Dell's own business. Devoid of this context, the current market cap is pretty meaningless to most people who don't follow the stock market.
Re:Google (Score:5, Funny)
yeah, the beta version has a known bug... it bytes.
*ducks*
Re: (Score:3, Informative)
I'm right there with you. I was very happy with the entire idea of apps... and i liked my iphone despite its shortcomings but this problem has remained unfixed. Apple has released a 2.01 update but it did not solve any of these issues. These bugs are all based around the installation of apps through the iphone, crashing of apps, the app store itself on the iphone, and interrupted installs. For example while installing an app on the phone, entering the app store on the phone at the same time "bricks" the pho