[99semaj]

Apple's market capitalization hit $222 billion on Wednesday, leaving it ahead of rival Microsoft as the largest technology company in the world when the closing bell rang on Wall Street.

The dethroning of Microsoft now makes Apple -- for now -- the second largest American company, behind only Exxon-Mobil. Apple has a ways to go to catch the oil giant, which has a market capitalization of nearly $280 billion

While market cap is but a single metric, it's an interesting factoid all the same...

 

[barcham]

Totally irrelevant when it comes to talking about computers. If Apple's numbers were based only on it's computer division and you moved the iPod, iPhone etc... to a different area, it wouldn't even be close. Besides, Apple sells hardware while MS sells software. To get a more realistic comparison you would have to combine all companies who sell Windows based computers and hardware together to get the real picture.

 

[CanuckBlue]

Exxon-Mobil sells oil so i guess we shouldn't call them #1.

 

[stampeder]

Since we're talking about market cap and not talking about computers, it is quite a role reversal for the two companies. Apple has the wind in their sails, while Microsoft... not so good.

 

[hugh]

All I can say is, wow!

A company given up for dead in the late 90's. I wonder what Michael Dell is thinking now?

from Oct 1997

And at the Gartner Symposium and ITxpo97 here today, the CEO of competitor Dell Computer added his voice to the chorus when asked what could be done to fix the Mac maker. His solution was a drastic one.

"What would I do? I'd shut it down and give the money back to the shareholders," Michael Dell said before a crowd of several thousand IT executives.

Dell's comments follow Steve Jobs's keynote address at the Seybold trade show last week in San Francisco, where the Apple cofounder seemed to win over attendees with his explanation of why he had made certain key decisions, killing the clone market and aligning more closely with Microsoft. The Seybold crowd--as well as some Apple employees--also seemed to be buoyed by the increasing role Jobs has taken on at the company as board member and interim CEO.

But others, like Dell, appear to think that Jobs's expanded role isn't helping. There is some concern that Apple will have a hard time recruiting a top-notch CEO because of Jobs's presence.

Others fear that Apple could end up completely in Microsoft's camp by deciding to use the NT operating system on its servers. Apple is reportedly planning to come out with network computers that would require high-end servers to function.

 

[Francois Caron]

Today, the "sheer power" of that 1997 era "high end" server can be found in the typical smartphone.

Like an iPhone.

While this is indeed a milestone, for how long can this new ranking be maintained?

Apple does have one clear advantage over Microsoft: diversity. Microsoft deals mostly with software for a single computing platform, along with the accessories that come with it such as keyboards, mice and music players. Apple however keeps pumping out new and different hardware products completely locked into their software platform almost each and every year under tremendous applause.

But imagine what would happen if Jobs was gone from Apple permanently. He is after all a liver transplant survivor, which has greatly affected his chances of leading a long and healthy life. After he dies (he'll never retire), how fast will the company go down the toilet? Jobs is still the master innovator at Apple, the one who makes it all work. The rest of the staff there couldn't innovate themselves out of a paper bag!

It'll be interesting to follow tthis one, especially with the corporate resistance against the latest version of Microsoft Office. Many more companies this time around are simply saying "no" to the upgrade and its associated costs.

 

[supergenius]

Totally irrelevant when it comes to talking about computers. If Apple's numbers were based only on it's computer division and you moved the iPod, iPhone etc... to a different area, it wouldn't even be close. Besides, Apple sells hardware while MS sells software. To get a more realistic comparison you would have to combine all companies who sell Windows based computers and hardware together to get the real picture.

But we're not talking just about computers, were talking about the largest "tech" company. And I would disagree that Apple only sells hardware while MS sells software. Apple sells an integrated experience which includes hardware and software. The hardware is really just a part of the equation. Without software, Apple would have been dead long ago. Microsoft and Apple both realized long ago that there is very little profit in only selling hardware which is why both companies are vigorously trying to enter and dominate other markets. If Microsoft continues to fail within these other markets it will continue to decline in overall market share while other companies surpass it (Google perhaps).

 

[hkaye]

I wonder how apple with fare without Jobs as well. He has put together quite a number of successful ventures - Apple (twice), Pixar, Next. He sold his vw van and convinced Wozniak to quit his job to start apple computers. Built on the success of the apple ][ went on to release the Mac. Left or was forced out of apple he started next which pioneered stuff like graphical email, wysiwyg programming which TBL used to invent the world wide web. Bought pixar from Lucas and turned that into CG animation powerhouse that Disney eventually bought making Jobs the largest single share holder of Disney. Comes back to apple and borrows 150 million dollars from Microsoft and then has one hit after another - iMac, OSX, iPod, iTunes, iPhone and now the iPad.

Don't know of any other person out there that has had so much success like this.

 

[jvincent]

Some interesting P/E data for some of the companies mentioned:

AAPL: 20.72
MSFT: 12.93
XOM: 13.49
IBM: 11.99

 

[Dr.Dave]

As anyone who lived through the tech bubble of the late 90s will tell you, stock price isn't always the best measurement of a company. Here are the sales and profit figures for a few tech companies that come to mind.

AAPL Revenue $36.54B Net Income $5.70B

MSFT Revenue $58.44B Net Income $14.57B

IBM Revenue $95.76B Net Income $13.43B

HP Revenue $114.55B Net Income $7.66B

 

[pappcam]

After what happened in the last decade I'd actually go as far to say that stock value may be the absolute worst way to value a company.

This story gets a HUGE "meh" from me.

 

[stampeder]

Two companies that were rumoured as potential Apple buyers way back when: Sun Microsystems in the late 1990s and Nokia about 3 or 4 years ago. Either of them could have bought that company for pocket change back then, but of course the road of the future would almost certainly have been quite different that what Steve Jobs has accomplished.

Anyways, as far as The Street is thinking, Apple has the midas touch right now.

 

[jvincent]

As the numbers show, there is still, and always will be, a lot of emotion in stock price.

AAPL is the darling right now and people will buy it just because it is AAPL.

 

[hugh]

stock value may be the absolute worst way to value a company.

How can stock price not be the best way to value a company?

A house, a car, a company etc are only worth what people are prepared to pay for it.

Sure short term conditions can appear to make a stock over or under valued, however, if you could spot when a stock was over or under valued, you'd be the richest person in the universe.

 

[Francois Caron]

Don't know of any other person out there that has had so much success like this.

Thomas Edison?

Their personalities weren't that much different either. Except maybe that Jobs never tried to rip off Wozniak like Edison had done to Tesla (which Edison later regretted).

 

[PokerChip]

I'm still kicking myself in the rear end for not having bought stock 10 years ago. Your 10 thousand would now be worth 100 thousand.

People who bought M$ at the time have actually lost money over the past 10 years.

As an Apple disciple, and a person who stuck with the platform since the Mac was introduced through thick and thin, this story has a nice, poetic justice tone to it.

 

[stampeder]

this story has a nice, poetic justice tone

Justice in another way too: add the de-fanging Microsoft has received over the last few years courtesy of the legal justice and regulatory systems worldwide and we are seeing that it is now a bit more possible for other tech companies like Apple to compete.

 

[jvincent]

I don't see Apple's resurgence having anything to do with MSFT's legal woes.

The iPod saved Apple.

They have, to their credit, been able to leverage that into multiple generations, the iPhone, etc. and I would argue that their laptop and desktop sales have been pulled along in the draft. I'm too lazy to look up the actual numbers but I'm pretty sure this is true.

Now that they are all hip and cool, people want to have an Apple product and own Apple stock, hence the price premium.

 

[hkaye]

I actually was thinking of Thomas Edison today, comparing him to Jobs.

I also thought a great comparison would be comparing Henry Ford to Bill Gates. Ford brought the car to the masses while Gates made it possible for everyone to have a personal computer with first DOS then Windows.

Living in a time to see two big industry tycoons is certainly a treat.

----------

Not that it really matters but the revenue/ net income numbers for AAPL posted in this thread are incorrect.

 

[CenturyBreak]

Thomas Edison?

Their personalities weren't that much different either. Except maybe that Jobs never tried to rip off Wozniak like Edison had done to Tesla (which Edison later regretted).

Except that Jobs did rip off his friend... at least once:

While still with HP, Wozniak describes his moonlighting development, with Jobs, of the prototype of the arcade game Breakout for Atari, Inc in only four days. He also describes, without bitterness, how Jobs shortchanged him on the job. Jobs, who worked for Atari Inc., said he would give Wozniak half of "whatever they paid him" for development of the game. Jobs subsequently gave Wozniak $375, saying Atari Inc. paid him $750 for the game. Later Wozniak found out that Atari Inc. actually paid Jobs five thousand dollars for the game.