or Connect
AppleInsider › Forums › General › General Discussion › Microsoft CEO Ballmer not worried about Apple's market cap
New Posts  All Forums:Forum Nav:

Microsoft CEO Ballmer not worried about Apple's market cap

post #1 of 106
Thread Starter 
After Apple's market cap exceeded rival Microsoft on Wall Street this week, the chief executive of the Windows maker, Steve Ballmer, noted that his company still rakes in more profits than anyone else in the technology business.

Ballmer was in New Delhi, India, on Thursday when reporters asked him about Apple's milestone, in which the Mac maker exceeded Microsoft in terms of market capitalization, making it the largest technology company in the world. According to The Wall Street Journal, the Microsoft CEO dismissed those questions.

"I will make more profits and certainly there is no technology company in the planet which is as profitable as we are," Ballmer said. "Stock markets will take care of the rest."

In the first quarter of calendar 2010, Microsoft had a net profit of $4.01 billion, from revenue of $14.5 billion. Apple, on the other hand earned $3.07 billion in profit during the same period, on revenue of $13.5 billion.

Ballmer told reporters he is more interested in launching new products and improving profitability than he is the market capitalization of his company with respect to Apple.

"We are executing very well," the chief executive said. "That's going to lead to great products and great success."

The market value of Microsoft has decreased from $556 billion in January of 2000, when Ballmer took over for Bill Gates as CEO, to $219 billion on Wednesday. In the same timeframe, Apple's market value has grown from $15.6 billion to $221 billion after the closing bell Wednesday.

"It's a long game," Ballmer was quoted as saying. "We have good competitors... We, too, are very good competitors."

Microsoft's market cap versus Apple. Source: The New York Times.

The Journal made no mention of a rumor that Ballmer could speak at Apple's Worldwide Developers Conference keynote on June 7. The claim was made this week by analyst Trip Chowdhry with Global Equities Research.

Ballmer in years past has caught the ire of Apple supporters, as the Microsoft executive has repeatedly dismissed the growth of the Mac platform as a "rounding error." Last July, he said gaining share from the roughly 10 million computers Apple sells a year is a "limited opportunity."

Of late, the CEO has been more complimentary of Apple. In a speech he made in March, he praised his rival for the creation of the App Store, which delivers software to the iPhone, iPod touch and iPad.
post #2 of 106
Maybe the MS Head of WinMobile 7 should have been more worried about Apple...same with the other MS Div. Head that was fired. He should have been more worried too!


Any CEO of any tech company, media/entertainment company that is not onboard with the largest tech company in the world and the second largest of any company needs to have their head looked at.

Balmer may not be worried but everyone else should be.
post #3 of 106
If Ballmer were on the Titanic, he'd deny it was sinking, claim "in fact" it will reach New York in half the time, while adding passengers along the way.
post #4 of 106
Any CEO should know that value is not only a function of current profit ('performance') but also the market's expectation of growth in future profits ('perception').

Any good CEO should worry about both.

MSFT does very well with the former, from its legacy businesses. It is the latter, the value from future growth opportunities, that seems to be their problem. (That is also why their PE ratio -- esp. The Forward PE ratio -- is so low for its being a tech company). It's not rocket science.
post #5 of 106
Quote:
Originally Posted by AppleInsider View Post

The market value of Microsoft has decreased from $556 billion in January of 2000, when Ballmer took over for Bill Gates as CEO, to $219 billion on Wednesday. In the same timeframe, Apple's market value has grown from $15.6 billion to $221 billion after the closing bell Wednesday.

I wonder what those numbers look like when adjusted for inflation?

EDIT: Although, to be fair to Microsoft, they will just become the new IBM, a company that continues to rake in significant profits, but isn't really a factor in the deciding the future of technology.
post #6 of 106
What's worrying going to do for Ballmer except give him "worry lines" in his face and he's got enough already.

Not worried... The Titanic wasn't worried about icebergs. Until...

The city of Chicago wasn't worried about any great fires. Until...

The city of San Francisco wasn't worried about earthquakes. Until...

Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

Reply

Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

Reply
post #7 of 106
Quote:
Originally Posted by Rot'nApple View Post

What's worrying going to do for Ballmer except give him "worry lines" in his face and he's got enough already.

Not worried... The Titanic wasn't worried about icebergs. Until...

The city of Chicago wasn't worried about any great fires. Until...

The city of San Francisco wasn't worried about earthquakes. Until...

Hahahahaha. Awesome. Rounding error my better half.
Groupthink is bad, mkay. Think Different is the motto.
Reply
Groupthink is bad, mkay. Think Different is the motto.
Reply
post #8 of 106
I wonder what he'll say when Apple's profits surpass Microsoft's....
post #9 of 106
With the exploding success of the iPad and the continued growth of the iPhone I suspect that Apple might also pass Microsoft in the profits category soon.
post #10 of 106
Quote:
"I will make more profits and certainly there is no technology company in the planet which is as profitable as we are," Ballmer said. "Stock markets will take care of the rest."

In the first quarter of calendar 2010, Microsoft had a net profit of $4.01 billion, from revenue of $14.5 billion. Apple, on the other hand earned $3.07 billion in profit during the same period, on revenue of $13.5 billion.

The market valuation aside, these words from Ballmer brings to mind the discussion about marketshare vs. profitability in the smartphone threads.

Quote:
"We are executing very well," the chief executive said. "That's going to lead to great products and great success."

Hmm. This mantra is reminiscent of his stock response after mocking the iPhone in 2007. The terrible fate of Microsoft is that its Windows Phone 7 would likely nosedive further. It is unlikely that phone manufacturers would pay $5-18 per phone, if they can have the Android OS for free.


CGC
post #11 of 106
Quote:
Originally Posted by Blastdoor View Post

I wonder what he'll say when Apple's profits surpass Microsoft's....

I suspect they will say that their future looks bright with Windows Phone 7, and ... um, what else do they have to be excited about? \
post #12 of 106
Quote:
Originally Posted by Steve Ballmer View Post

"I will make more profits and certainly there is no technology company in the planet which is as profitable as we are," Ballmer said. "Stock markets will take care of the rest."

If was a MSFT stockholder, this kind of remark from my CEO would worry the crap out of me -- the markets already having "taken care" of over 50% of their stock valuation.
Please don't be insane.
Reply
Please don't be insane.
Reply
post #13 of 106
I can certainly see how as the CEO he has to be the top cheerleader too. But his comments and choice of words..come back to haunt him so often. Now he just seems a little out of touch!\
post #14 of 106
"Ballmer told reporters he is more interested in launching new products and improving profitability"

New products isn't the same as better products. Improving profitability won't lead to better products either.

I question his vision \
post #15 of 106
Quote:
Originally Posted by christopher126 View Post

I can certainly see how as the CEO he has to be the top cheerleader too. But his comments and choice of words..come back to haunt him so often. Now he just seems a little out of touch!\

Was he ever in touch?
Please don't be insane.
Reply
Please don't be insane.
Reply
post #16 of 106
Quote:
Originally Posted by jeffreytgilbert View Post

Hahahahaha. Awesome. Rounding error my better half.

LOL. I remember that comment by him, saying Apple was a rounding error. Does this now mean his company is a rounding error?

Quote:
Originally Posted by Blastdoor View Post

I wonder what he'll say when Apple's profits surpass Microsoft's....

Say that his company makes more profit per dollar revenue than any other company on the planet?
post #17 of 106
apple = bag of hurt for microsoft
post #18 of 106
Quote:
Originally Posted by Dr Millmoss View Post

Was he ever in touch?

It certainly is damning when he took over 10 years ago MS' Market Cap was $500+Billion and now it's less than half that! Wow!

Best
post #19 of 106
Quote:
Originally Posted by roehlstation View Post

If Ballmer were on the Titanic, he'd deny it was sinking, claim "in fact" it will reach New York in half the time, while adding passengers along the way.

If he were on Titanic he would say: don't worry, just switch off the engines and switch them on again and everything will be okay.


Okay.... I know it's an old joke but they are the best (sometimes)
post #20 of 106
Quote:
Originally Posted by christopher126 View Post

I can certainly see how as the CEO he has to be the top cheerleader too. But his comments and choice of words..come back to haunt him so often. Now he just seems a little out of touch!\

Does he even need to be in touch. What is the worst that can happen. He gets fired and has to go live off of his billions in wealth. I guess when you have that much money you can say any stupid thing you want.
post #21 of 106
Convergence of Markets, is the only thing Microsoft needs to be worried about.

If I were a MS shareholder, I would be greatly concerned about MS recent efforts to "me too" some of Apple's most successful ventures. To me, this means that they are aware that convergence of previously separate markets is occurring, and instead of getting out ahead, are following far behind Apple.

Microsoft could still be innovating to keep some of its markets afloat, but we haven't seen much evidence of such an effort.
post #22 of 106
Quote:
Originally Posted by cgc0202 View Post

The market valuation aside, these words from Ballmer brings to mind the discussion about marketshare vs. profitability in the smartphone threads.

They are not really the same.

1) Market Cap and Market Share have to correlation

2) Ballmer is right that profitability is what's important and Apple is on the verge of passing them.

3) In the smartphone space Apple's profitability lead has been increasing each quarter. So yes, Android has been gaining market share rapidly, however, their profits haven't been growing enough to keep up with Apple's profits in that space (yet).
post #23 of 106
The graph says it all really, what has this guy achieved since taking over from Bill Gates? I would be fuming as a shareholder. To constantly dismiss a competitors products and then copy them badly? That is his vision as head of one of the biggest companies on the planet? Where is the vote of no confidence? Microsoft can do better than this...
post #24 of 106
MSFT may be the most profitable, but it's not like Apple is trailing them by much. Seems silly to just brush off Apple's revenue when it's roughly 93% of what MSFT made during Q1 2010. It's not difficult to imagine Apple equaling or surpassing MSFT's revenue in the near future.
post #25 of 106
"The iPhone will suck ass, Windows Mobile will rule, and I will lose 83 pounds in 2 months." --Steve Ballmer, 2007
post #26 of 106
Quote:
Originally Posted by Kovich View Post

If he were on Titanic he would say: don't worry, just switch off the engines and switch them on again and everything will be okay.

No, no. That wouldn't work, you would have to close all open windows first!
post #27 of 106
Fire Steve ballmer !
post #28 of 106
Quote:
Originally Posted by rfoap View Post

MSFT may be the most profitable, but it's not like Apple is trailing them by much. Seems silly to just brush off Apple's revenue when it's roughly 93% of what MSFT made during Q1 2010. It's not difficult to imagine Apple equaling or surpassing MSFT's revenue in the near future.

I fully expect that to happen the next holiday season.

Updated iPhone 4G. Potentially newer version of iPad (although that may not happen due to the current shortages). Updated iPods. Updated Macs.

These are 4 product categories that will just sell like blockbusters in that period.
post #29 of 106
Quote:
Originally Posted by AppDev View Post

I suspect they will say that their future looks bright with Windows Phone 7, and ... um, what else do they have to be excited about? \

I guess they continue to have 100% of the Microsoft Windows market...
post #30 of 106
Quote:
Originally Posted by christopher126 View Post

It certainly is damning when he took over 10 years ago MS' Market Cap was $500+Billion and now it's less than half that! Wow!

Best

Well, to answer my own question above, it seems the inflation rate since April 2000 is about 27%, making Microsoft's value back then, in today's dollars, about $700 billion, so it's actually down to less than 1/3 of what it was. Apple's value 10 years ago, adjusted for inflation (assuming my calculations are correct) would be about $20 billion, a greater than ten-fold increase.
post #31 of 106
Quote:
Originally Posted by Blastdoor View Post

I wonder what he'll say when Apple's profits surpass Microsoft's....

My money is he'll switch to banging on about units sold being most important (i.e. they shift loads of crap at low margin).

Quote:
Originally Posted by christopher126 View Post

I can certainly see how as the CEO he has to be the top cheerleader too. But his comments and choice of words..come back to haunt him so often. Now he just seems a little out of touch!\

That's a very good point. In Balmers defense he's hardly likely to declare, "oh my God, everything Apple does is better than us and we're going to get killed". Even if it is true!

Quote:
Originally Posted by anantksundaram View Post

Any CEO should know that value is not only a function of current profit ('performance') but also the market's expectation of growth in future profits ('perception').

Any good CEO should worry about both.

MSFT does very well with the former, from it's legacy businesses. It is the latter, the value from future growth opportunities, that seems to be their problem. (That is also why their PE ratio -- esp. The Forward PE ratio -- is so low for it's being a tech company). It is not rocket science.

You're right, but you also need to consider herd mentality. Some stocks are seen as inherently "sexy" whilst others are not. I suspect Apple are helped there too.
post #32 of 106
Quote:
Originally Posted by anantksundaram View Post

MSFT does very well with the former, from it's legacy businesses.... That is also why their PE ratio -- esp. The Forward PE ratio -- is so low for it's being....

it's -- a contraction of "it is"
its -- a possessive pronoun indicating association to an inanimate object
post #33 of 106
Keep in mind that MS stock trades at about 1/10th the price of Apple stock right now. So a $1 fluctuation requires a $10 fluctuation on Apple's part. Granted, MS has been going down these past few years, but adding a few cents to MS share price can change things overnight (either way, I might point out).

What Apple ought to do is institute a 10:1 stock split so their stock trades in the $25 range. Think of the psychological boost that will give to the stock price when people figure they can buy it for $25 (and remember the bad old days when you could get it for that price).
post #34 of 106
Quote:
Originally Posted by cincytee View Post

it's -- a contraction of "it is"
its -- a possessive pronoun indicating association to an inanimate object

could it be that we all know this already and it's just a typo?

You could work on something more useful like getting your City to use less consonants in its name!

Just teasing btw!

Best
post #35 of 106
Quote:
What's worrying going to do for Ballmer except give him "worry lines" in his face and he's got enough already.

post #36 of 106
Quote:
Originally Posted by Blastdoor View Post

I guess they continue to have 100% of the Microsoft Windows market...

post #37 of 106
Quote:
Originally Posted by Blastdoor View Post

I guess they continue to have 100% of the Microsoft Windows market...


Not really. The most cracked software ever. Pirates, Pirates, Pirates!

Life is too short to drink bad coffee.

Reply

Life is too short to drink bad coffee.

Reply
post #38 of 106
Quote:
Originally Posted by PaulMJohnson View Post

You're right, but you also need to consider herd mentality. Some stocks are seen as inherently "sexy" whilst others are not. I suspect Apple are helped there too.

Good points! The wind is certainly at Apple's back....Maybe MS needs more of a shake up than just changing to Division Heads?
post #39 of 106
Quote:
Originally Posted by christopher126 View Post

It certainly is damning when he took over 10 years ago MS' Market Cap was $500+Billion and now it's less than half that! Wow!

Would any other CEO survive that sort of performance, over such a long period of time? It can't hurt Ballmer's position that he's an old FOB and a major MSFT stockholder himself.

Quote:
Originally Posted by rhyde View Post

What Apple ought to do is institute a 10:1 stock split so their stock trades in the $25 range. Think of the psychological boost that will give to the stock price when people figure they can buy it for $25 (and remember the bad old days when you could get it for that price).

Think of what a pointless waste of effort that would be.
Please don't be insane.
Reply
Please don't be insane.
Reply
post #40 of 106
Quote:
Originally Posted by AppleInsider View Post


The market value of Microsoft has decreased from $556 billion in January of 2000, when Ballmer took over for Bill Gates as CEO, to $219 billion on Wednesday. In the same timeframe, Apple's market value has grown from $15.6 billion to $221 billion after the closing bell Wednesday.


Without question Steve J has done an amazing job at turning around Apple.

I'll be really impressed, though, when Apple surpasses $556 billion in market capitalization.
na na na na na...
Reply
na na na na na...
Reply
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: General Discussion
AppleInsider › Forums › General › General Discussion › Microsoft CEO Ballmer not worried about Apple's market cap