Apple 'an amazing company' says Microsoft's Bill Gates
The Microsoft co-founder, Steve Jobs sparring partner, and one-time savior of Apple said that the company in its current incarnation is "amazing" while speaking to the media.
Bill Gates, over the years, has had quite a complicated relationship with Apple. But the man who spent years going toe-to-toe with Steve Jobs in some of the most contentious battles in the history of American business now has effusive praise for his longtime rival.
"It's an amazing company," Gates said on CNBC Monday, in an interview at the Berkshire Hathaway shareholder meeting. "The multiple's not gigantic, it's not like a tech-speculative company that's still losing money or anything."
"The top tech companies do have a very strong profit position right now," Gates added. "But Apple has the strongest position of all."
The comments were a reference to Warren Buffett's recent investment in Apple; during the interview, Gates was seated next to Buffett and Berkshire's vice chairman, Charlie Munger. Gates, who left Microsoft in 2014 and devotes most of his energies to his foundation, is a Berkshire Hathaway board member.
Buffett, in the same interview, added that the reason for the investment was more about how consumers react to it than any kind of commentary on the quality of the products. In fact, Buffett admitted in the interview that he didn't own an iPhone until someone sent him an iPhone X recently.
"It's the consumer behavior with the product, what they do with it, how it becomes part of their lives, that I observe and primarily reason from," Buffett said. "It has a position in customer's minds, and a utility to them, that's very, very useful, and it's an incredible ecosystem that they've found ways to profit from as they've gone along."
Apple accused Microsoft of ripping off the Macintosh with Windows, while there was even a long-running copyright infringement lawsuit claiming that Microsoft had stolen ideas for graphic user interface elements.
But things weren't always contentious between the two companies. In 1997, shortly after Jobs' return to Apple, he announced a controversial deal in which Microsoft invested $150 million in Apple, agreed to support Office for Mac, make Microsoft Explorer the default browser on Macs, and settle that lawsuit.
In their later years, especially after Gates stepped down as CEO in 2000, he and Jobs would occasionally appear together at conferences and for on-stage interviews, such as at the 2007 D conference.
The Gates/Jobs relationship was the subject of the 1999 TV movie "The Pirates of Silicon Valley"; a Broadway musical about the two of them, "Nerds," was planned in 2016 but cancelled before it was produced.
Bill Gates, over the years, has had quite a complicated relationship with Apple. But the man who spent years going toe-to-toe with Steve Jobs in some of the most contentious battles in the history of American business now has effusive praise for his longtime rival.
"It's an amazing company," Gates said on CNBC Monday, in an interview at the Berkshire Hathaway shareholder meeting. "The multiple's not gigantic, it's not like a tech-speculative company that's still losing money or anything."
"The top tech companies do have a very strong profit position right now," Gates added. "But Apple has the strongest position of all."
The comments were a reference to Warren Buffett's recent investment in Apple; during the interview, Gates was seated next to Buffett and Berkshire's vice chairman, Charlie Munger. Gates, who left Microsoft in 2014 and devotes most of his energies to his foundation, is a Berkshire Hathaway board member.
Buffett, in the same interview, added that the reason for the investment was more about how consumers react to it than any kind of commentary on the quality of the products. In fact, Buffett admitted in the interview that he didn't own an iPhone until someone sent him an iPhone X recently.
"It's the consumer behavior with the product, what they do with it, how it becomes part of their lives, that I observe and primarily reason from," Buffett said. "It has a position in customer's minds, and a utility to them, that's very, very useful, and it's an incredible ecosystem that they've found ways to profit from as they've gone along."
Gates and Apple
The cofounder of Microsoft, during his years in charge of that company, frequently squared off against Apple. They fought for market share, they fought in court, and they battled over larger questions of what the direction that computers would take.Apple accused Microsoft of ripping off the Macintosh with Windows, while there was even a long-running copyright infringement lawsuit claiming that Microsoft had stolen ideas for graphic user interface elements.
But things weren't always contentious between the two companies. In 1997, shortly after Jobs' return to Apple, he announced a controversial deal in which Microsoft invested $150 million in Apple, agreed to support Office for Mac, make Microsoft Explorer the default browser on Macs, and settle that lawsuit.
In their later years, especially after Gates stepped down as CEO in 2000, he and Jobs would occasionally appear together at conferences and for on-stage interviews, such as at the 2007 D conference.
The Gates/Jobs relationship was the subject of the 1999 TV movie "The Pirates of Silicon Valley"; a Broadway musical about the two of them, "Nerds," was planned in 2016 but cancelled before it was produced.
Comments
In 1997, Microsoft bought 150,000 shares of Apple preferred stock, convertable to common shares of Apple stock at a price of $8.25, redeemable after a three year period, for $150 million. Apple was worth ~ $3B at the time.
By 2001, they'd converted all of the shares into common stock, netting the company approximately 18.1 million shares.
By 2003, they'd sold all of it.
It was mostly optics.
Please REMOVE the phrase "and one-time savior of Apple" from the opening statement, it's a blunt and proven lie!
Of course other things matter, such as building great product. But anyone who doesn't like talking about profit is either a troll or someone who shouldn't be running businesses.
As you said it was all about optics.
Apple really was in trouble at the time. There were calls for Apple to either shut down and give the money back to shareholders or sell itself to a company like Sony, which demonstrates how analysts and industry insiders were just as dumb (if not dumber) back then as they are now.
I've posted this before, but here's some brilliant quotes by these geniuses over the years:
Apple just had two record breaking sales and net-income quarters at a time when the analysts and press claimed the iPhone X wasn't selling. Apple Services alone, if spun off, would make the Fortune 100 list and it's rarely even mentioned. Apple's net income in fiscal 2017 was LARGER than their net sales in 2009 and before. One quarter of Apple's Services revenue is LARGER than annual sales of the entire company before fiscal 2004. And yet the analysts keep trying to imply that Apple is somehow failing. Either they're completely stupid or this is clearly stock manipulation.
I don't care what the article says - Buffet didn't buy more Apple stock because he saw that customers liked Apple and bought into the eco-system - there's no doubt in my mind that he looked at the numbers, which are extraordinary. There's a good chance Apple will beat the fiscal 2015 net sales record of $233.715 billion as they're already at $149.44 billion after two quarters. But having said all that, there is a question of what Apple is going to be ten years from now. I've predicted for some time that 15 years from now, Apple will be an A.I. and robotics company, but with Siri still being so lame, I'm not so sure anymore.
Apple needed the money, but a company like Apple spends that type of money fairly quickly. More importantly it needed Microsoft’s commitment to Internet explorer and word. At the time Microsoft was threatening to abandon the Mac, and Apple would have a hard time selling Macs without those programs. The Mac would’ve died without it. And we would’ve never seen the iPod iPhone and iPad .
Does anyone know what this means?(espessially the ‘multiples’ part)
Buffet gets it. This sentence explains why the iPhone X has done so well, despite the “supposedly” high price. Smartphones have become our primary computing devices and are, for most people, the most useful piece of tech they own. When you make the best smartphone and ecosystem, revenues and profits are bound to follow.
Like it or not, there is no question that the money, the development deal to make sure that Office (and Internet Explorer!) remained on the Mac, plus the cessation of the QuickTime lawsuit saved Apple's ass.
Yes it may have been short sighted, however, I suspect that part of the deal was that MS had to exit, the agreement most likely had a clause which required MS to sell its stake in Apple after some time or when a milestone was hit. Apple did not want MS holding a vote share in the company too long.
This is something most people forget was going on at the time. MS could not afford for Apple to die, if Apple die MS would have been the only OS other than Unix which very few were using and MS would have been stepped on by governments. Too many time people try to make complex situation simple or simple thing complex. In the case of Apple and MS there was a lot going on. I give Jobs and Gates lots of credit for sitting down and focusing on what was important and working a deal with benefitted everyone involved including consumers.
Funny how not a single word of your rant actually addresses his post. He made a factual observation that anyone who has even been partially paying attention can confirm. It's not a "conspiracy" to acknowledge that this happens with Apple - a concerted negative media campaign that happens a couple times a year- nothing like that exists with any other tech company. But yeah, because he has enough braincells to observe this, he needs to "get a life" and get on board with your tired, intellectually lazy "all sides are the same!" horse-shit.