or Connect
AppleInsider › Forums › Investors › AAPL Investors › Earnings Preview: Apple to surpass Microsoft in revenue this quarter
New Posts  All Forums:Forum Nav:

Earnings Preview: Apple to surpass Microsoft in revenue this quarter

post #1 of 88
Thread Starter 
After 30-years of living in the shadows of Microsoft, Steve Jobs and Co. will surpass its archenemies in Revenue this year. And as Apple’s staggering growth rate continues, its unlikely that Microsoft will be able to resume its dominance over the iPhone maker any time soon.

While doubts as to whether Apple (AAPL) deserves to hold the second largest market cap in the U.S. continue to mount, one thing it is clear: Apple has closed the revenue gap on Microsoft (MSFT), and looks to assume full supremacy over the software company. And though Apple still has a ways to go to compete with Microsoft in terms of net income due to Microsoft’s stunning operating margin, many will be surprised to learn that Apple will actually post more revenue than its rival in the 2010 and 2011 fiscal years.

In fact, when Microsoft reports second quarter calendar results after the bell this afternoon, its likely that Apple will have surpassed Microsoft in revenue for the first time in the company’s recent history - and that it will continue to do so in the future. Apple reported $3.25 billion in net income ($3.51) on a whopping $15.7 billion in revenue on Tuesday, smashing analyst expectations, and reporting more or less in line with my forecast.

Microsoft, on the other hand, is expected to earn $4.1 billion in net income ($0.46 in EPS) on $15.26 billion in revenue when it releases results after the bell today. That is nearly $500 million less than what Apple reported in revenue this quarter. And while Microsoft also regularly reports upside surprises making it very possible that it could edge out Apple in revenue, the gap between consensus estimates and Microsoft’s actual results is nowhere near as wide as it is with Apple’s results.

The chart below details a quarterly revenue comparison of Apple and Microsoft over the past few years. As one can see from the chart, Apple looks to surpass Microsoft’s quarterly revenue for the first time in recent history. More importantly, while Microsoft’s revenue growth appears to have slowed in recent years, Apple continues to post one record quarter after another. Since Microsoft and Apple are on a different fiscal year, the chart realigns their results to make them comparable on the calendar year.



So the big story in tech earnings this week is whether history will be made in the decades-long battle between Apple and Microsoft, or whether Microsoft will postpone the inevitable and maintain its dominance over Apple for at least one more quarter.

And even if Apple doesn’t beat Microsoft in sales this quarter, it will certainly do so next quarter and by quite a large margin. For the September quarter, analysts expect Apple to generate approximately $18 billion in revenue compared to a projected $15.16 billion expected out of Microsoft.

So even conservative analyst estimates already put Apple ahead of Microsoft by nearly $3 billion next quarter. My estimates put Apple ahead by $3.8 billion as I expect Apple to record nearly $18.9 billion in revenue.

What’s even more surprising is that Apple will likely far surpass Microsoft in revenue for the entire 2010 and 2011 fiscal year. In fact, I’m looking for Apple to record $81.6 billion in revenue in 2011 – that’s about $11.6 billion above the $70 billion I’m expecting out of Microsoft. Even the 2010 and 2011 conservative analyst consensus puts Apple well ahead of Microsoft. Thus, it’s looking increasingly likely that this quarter sets the beginning of a new age where Apple will regularly post higher revenue than Microsoft going forward.

The chart below compares Apple and Microsoft’s annual fiscal revenue for the past several years. While quarterly data must be compared on the calendar year to show a side by side comparison over a particular 3-month period, yearly data can be analyzed on the fiscal year.



Yet, when it comes to questions as to which company ought to have a larger market capitalization, total revenue is but a single of several factors that should be considered. Net income growth, total net income, total net cash, cash flow, book value, total assets and the economic sensitivity of each company’s primary operations are just a few of those other key factors.

So while Apple will be surpassing Microsoft in revenue in the near future, that in and of itself doesn’t necessarily mean that Apple automatically ‘ought’ to have a larger market capitalization. Though under closer scrutiny one will find that within the next year or so, Apple will soon not only record more revenue than Microsoft, but will earn more in net income, generate a larger amount of cash, and out-pace Microsoft in terms of growth in net income and revenue.

Still, Apple does have a ways to go before it will surpass Microsoft in net income. Due to Microsoft’s extraordinarily high operating margin, the only way Apple can beat Microsoft in earnings is by simply outpacing it in sales. Since Microsoft pushes more of its revenue to the bottom line, Apple will have to significantly outpace Microsoft in revenue to win on the net income front – something that Apple will probably do in 2012. The chart below compares Apple and Microsoft’s net income for the last several fiscal years, and offers projections for 2011.



Though these two companies no longer really operate in the same space as they once did in the past, Apple turning its focus on the consumer and Microsoft on enterprise spending, both companies are dominating their respective industries. Yet, several Microsoft investors have argued that it’s somehow inappropriate to compare Apple to Microsoft since Apple is a device maker and Microsoft an enterprise software maker. Nothing can be further from the truth.

Such arguments not only reek of the highest level of financial irrationality, but they are also rooted in a dangerously mislead ideology. Any two companies that make money are automatically comparable. For while the comparison may or may not be appropriate in a cross sector analysis, any two publically traded companies can in fact be compared on a fundamental return on equity basis. That much is clear. If a multi-trillionaire wanted to buy either of these companies, a fundamental comparison is not only appropriate but required for sound due diligence.

Moreover, even in a cross sector analysis where an investor wishes to determine which company is best in breed, Apple and Microsoft do in fact participate in the technology sector despite the little operational overlap between the two companies. It’s not as if Apple is a pharmaceutical company, and Microsoft an oil refiner. In fact, I’m actually shocked that I have to spell out such a rudimentary concept of finance to the average investor. If you believe that these two companies aren’t comparable, you should reconsider whether participating in the equity markets makes the most sense.

Thus, what’s left to be decided is which of these two tech giants deserves to be crowned the supreme leader of the tech sector as a whole? The answer to that question will be addressed in future articles I’ll be writing over the next few weeks. Stay tuned.
post #2 of 88
No surprise. Microjunk has lost its edge. Well, the "edge" that comes from their universal-licensing racket. You can only ride the coattails of that gig so long.
post #3 of 88
While doubts as to whether Apple (AAPL) deserves to hold the second largest market cap in the U.S. continue to mount


Do you have references to the above, have not read anything on this.
post #4 of 88
It's great to see Apple having its day once again, finally. Way back in 1982 I purchased my first Apple product, an Apple II+. Back then there were literally dozens of personal computers on the market, names the younger crowd have never heard of. I looked and looked and looked at most of them. It was plainly obvious that the Apple II+ stood head and shoulders above the rest in quality, features and design. It was also significantly more expensive. I thought long and hard and decided to pay my very first so-called Apple tax. I have never regretted that decision. Not once!

For those who weren't even born then the Apple II+ was headless and shipped with 48 kilobytes of ram. It was a one piece design with an integrated keyboard. The price for this beauty was $1295.00. You used a standard television as a monitor and a cassette tape player to input programs. When the Disk II arrived it was $695.00 for a storage capacity of 150 kilobytes on a single sided 5.25 inch floppy diskette.

To this day I believe Apple products to be superior to anything else on the market.
post #5 of 88
Quote:
Originally Posted by rbonner View Post

While doubts as to whether Apple (AAPL) deserves to hold the second largest market cap in the U.S. continue to mount


Do you have references to the above, have not read anything on this.

That's because you're ignorant, apparently. Try this thing called "Google." It's magical.
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
post #6 of 88
Who is this idiot writing these analyses? Anybody with an accounting 101 class under their belt could do this.
post #7 of 88
It is no surpise for me as apple is really the leader.. look at how advanced ipad is in muti-touch , ipad supports up to 11 muti-touches while iphone supports up to 5 which is super responsive and accurate. Ipad is what the most powerful muti-touch device consumer can buy ..And Apple is really knowing what they are doing with ipad. Ipad is for giving us the fresh new touch experience that desktop cant give. Apple knows ipad is for TOUCH...but those ipad killer , they just forgot the true meaning of a tablet device that is supposed to be TOUCHing it the different ways. Those ipad killer uses WINDOWS OS and say they have USB and say they are better ... this is totally bullshit . If I want a windows OS , why dont i buy a notebook? I want ipad to enrich my experience on touch..I want especially designed apps for better interacting very nicely with my 11 muti-touches! That is what a tablet meant to be here .

This is why i am proud of being an ipad and iphone user.

Tell me what other device gives you this powerful muti-touches...I believe NONE. the real "quietly brilliant" is apple instead!

Apple , I LOVE U! Thank for teaching me the true meaning of TOUCH.
post #8 of 88
Apple, good work!

Giovanni B. Saccone
Creativity is just connecting things (Steve Jobs)
> > > My wEb SiTe < < <

Reply

Giovanni B. Saccone
Creativity is just connecting things (Steve Jobs)
> > > My wEb SiTe < < <

Reply
post #9 of 88
Quote:
Originally Posted by AppleStud View Post

Who is this idiot writing these analyses? Anybody with an accounting 101 class under their belt could do this.

I would be interested in a link to your analysis. Perhaps your 101 is a summer course.
post #10 of 88
Quote:
Originally Posted by lkrupp View Post

It's great to see Apple having its day once again, finally. Way back in 1982 I purchased my first Apple product, an Apple II+. Back then there were literally dozens of personal computers on the market, names the younger crowd have never heard of. I looked and looked and looked at most of them. It was plainly obvious that the Apple II+ stood head and shoulders above the rest in quality, features and design. It was also significantly more expensive. I thought long and hard and decided to pay my very first so-called Apple tax. I have never regretted that decision. Not once!

For those who weren't even born then the Apple II+ was headless and shipped with 48 kilobytes of ram. It was a one piece design with an integrated keyboard. The price for this beauty was $1295.00. You used a standard television as a monitor and a cassette tape player to input programs. When the Disk II arrived it was $695.00 for a storage capacity of 150 kilobytes on a single sided 5.25 inch floppy diskette.

To this day I believe Apple products to be superior to anything else on the market.

It is no surpise for me as apple is really the leader.. look at how advanced ipad is in muti-touch , ipad supports up to 11 muti-touches while iphone supports up to 5 which is super responsive and accurate. Ipad is what the most powerful muti-touch device consumer can buy ..And Apple is really knowing what they are doing with ipad. Ipad is for giving us the fresh new touch experience that desktop cant give. Apple knows ipad is for TOUCH...but those ipad killer , they just forgot the true meaning of a tablet device that is supposed to be TOUCHing it the different ways. Those ipad killer uses WINDOWS OS and say they have USB and say they are better ... this is totally bullshit . If I want a windows OS , why dont i buy a notebook? I want ipad to enrich my experience on touch..I want especially designed apps for better interacting very nicely with my 11 muti-touches! That is what and why a tablet meant to be here .

This is why i am proud of being an ipad and iphone user.

Tell me what other device gives you this powerful muti-touches...I believe NONE. the real "quietly brilliant" is apple instead!

Apple , I LOVE U! Thank for teaching me the true meaning of TOUCH.

So, HP slate = Ifail ....
post #11 of 88
As with melting glaciers, the demise of Microsoft will accelerate. I doubt this will be a linear event.
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
post #12 of 88
Quote:
Originally Posted by AppleStud View Post

Who is this idiot writing these analyses? Anybody with an accounting 101 class under their belt could do this.

In my experience the professional trolls (i.e, those with deep understanding and probably paid by MS, RIM et al) avoid the really good AAPL news like the plague.
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
post #13 of 88
This is generally a good (if slightly over enthusiastic) article, but I must take issue with some terminology. Apple passed Microsoft in Apple's 3rd fiscal quarter which was LAST quarter, not THIS quarter (THIS quarter, the one we're currently in, is Apple's 4th fiscal quarter and results from THIS quarter won't be posted until October).

Finance is confusing enough without adding these mix ups.

Otherwise, I'm a happy (AAPL owing) camper...
post #14 of 88
Quote:
Originally Posted by raymondinperth View Post

This is why i am proud of being an ipad and iphone user.
Apple , I LOVE U! Thank for teaching me the true meaning of TOUCH.

I think you mean touched, as in touched in the head!

At least we know why there was no iPhone 4 recall. Steve Mobs doesn't want to be second banana to monkey boy so we have to keep the numbers up.

Too bad these figures don't include the iPhone 4 and iPad return rates. No one will ever see those. Apple wouldn't want freak out the fanboi community by reveiling how many people return the iPhone 4 that can't hold a call and the flashless iPad that can't render 75 percent of the Internet.

We must be drinking some columbian kool aid to believe Apple is beating Microsoft at anything.
post #15 of 88
Quote:
Originally Posted by elb View Post

This is generally a good (if slightly over enthusiastic) article, but I must take issue with some terminology. Apple passed Microsoft in Apple's 3rd fiscal quarter which was LAST quarter, not THIS quarter (THIS quarter, the one we're currently in, is Apple's 4th fiscal quarter and results from THIS quarter won't be posted until October).

Finance is confusing enough without adding these mix ups.

Otherwise, I'm a happy (AAPL owing) camper...

It will be very interesting to see what this quarter shows. If this is a trend or an anomaly. The FUD over phone reception may cause a false dip for Apple so we may have to wait a few quarters to see a true trend. My guess is MS is five years away from irrelevancy.
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
post #16 of 88
Quote:
Originally Posted by elb View Post

This is generally a good (if slightly over enthusiastic) article, but I must take issue with some terminology. Apple passed Microsoft in Apple's 3rd fiscal quarter which was LAST quarter, not THIS quarter (THIS quarter, the one we're currently in, is Apple's 4th fiscal quarter and results from THIS quarter won't be posted until October).

Finance is confusing enough without adding these mix ups.

Otherwise, I'm a happy (AAPL owing) camper...

Yea. This is why everyone should be on the calendar year. We're talking about the 3-month period ended June 30th. Which is the SECOND quarter. So despite Apple being in Q3 and Microsoft in Q4 on the fiscal year, they're both in Q2 on the calendar year. That's where we're comparing them. On the calendar quarter. THIS quarter during earnings season is Q2.

No one speaks in terms of "THIS" quarter as in Q3. They're referring to Q2 within the context of an earnings preview.

If you want to compare them on the fiscal year, you look at their overall revenue and earnings on the year. But the two companies aren't comparable on the fiscal quarter unless you want to spend your time referring to each of their quarters in different time periods. NO one does this in finance.
Andy M. Zaky
Bullish Cross
www.bullcross.com
Reply
Andy M. Zaky
Bullish Cross
www.bullcross.com
Reply
post #17 of 88
This is a shareholder viewpoint comment.

Apple has shown a stunning ability to invent markets where none existed before. The iPhone when it was released simply added to revenue. The same is true of the iPad.

This in direct contrast to:
1) Microsoft - They have been milking the same product for years. Even their "successful" new products are not successes from a shareholder's POV, since XBOX, Bing, etc. are all draining money.
2) Google - They have only been a 1 trick pony so far. They have not made money on anything yet, except search ads. Even their entry in mobile ads (which looks like only the 2nd area where they could create a decent revenue source) is widely regarded as an extremely overpriced entry. Besides, it got devalued almost instantly because it spurred Apple to create iAds. Additionally, Google is great at sucking value out of markets. A prime example is GPS location systems.

In effect, they are doing what MS tried to do with IE, but on a much larger scale. They are giving away products at a loss to sustain their 1 revenue generating (and not surprisingly, proprietary) product, search. MSFT was similarly giving away IE so they could keep users within the MS ecosystem. (although, MS screwed up by illegally using their monopoly to force hardware makers to bundle it in. Google has smartly stayed away from illegal procedures like those)


What happens when Apple releases the iOS based Apple TV?
post #18 of 88
Quote:
Originally Posted by Wovel View Post

I would be interested in a link to your analysis. Perhaps your 101 is a summer course.

aargh... response to the wrong person! (deleted; see below).
post #19 of 88
Quote:
Originally Posted by AppleStud View Post

Who is this idiot writing these analyses? Anybody with an accounting 101 class under their belt could do this.

Cut the snark, man. Yes, what Zaky covers here is not rocket science, but it is nice to have different perspectives and issues covered on AI.

More important, if you're so darned smart, write something on the topic and submit it to AI for publication. Shut up, o/w.
post #20 of 88
What a terribly written article! Could he repeat himself more? And does he think that hyperbole makes his points stronger?

"Such arguments not only reek of the highest level of financial irrationality, but they are also rooted in a dangerously mislead ideology. "

Really? THAT in response to the suggestion that Apple and Microsoft are not similar companies operationally? Talk about drinking the Kool Aid. This guy is in love.
post #21 of 88
Quote:
Originally Posted by SDW2001 View Post

That's because you're ignorant, apparently. Try this thing called "Google." It's magical.

What a horrible thing to say. It's not ignorant to ask for clarification about something you might not know.

Mindlessly insulting someone is reasonably ignorant however.

Quote:
Originally Posted by rbonner View Post

While doubts as to whether Apple (AAPL) deserves to hold the second largest market cap in the U.S. continue to mount


Do you have references to the above, have not read anything on this.

Here's an article from a couple of months back that details:

http://www.businessweek.com/news/201...-update3-.html
post #22 of 88
Quote:
Originally Posted by AppleStud View Post

Who is this idiot writing these analyses? Anybody with an accounting 101 class under their belt could do this.

Maybe, but I don't have accounting 101, so perhaps I'm the target audience.
post #23 of 88
Quote:
Originally Posted by rbonner View Post

While doubts as to whether Apple (AAPL) deserves to hold the second largest market cap in the U.S. continue to mount


...

Since when does deserving have anything to do with a company's worth.
post #24 of 88
Quote:
Originally Posted by digitalclips View Post

In my experience the professional trolls (i.e, those with deep understanding and probably paid by MS, RIM et al) avoid the really good AAPL news like the plague.

Quote:
Originally Posted by Blackintosh View Post

I think you mean touched, as in touched in the head!

At least we know why there was no iPhone 4 recall. Steve Mobs doesn't want to be second banana to monkey boy so we have to keep the numbers up.

Too bad these figures don't include the iPhone 4 and iPad return rates. No one will ever see those. Apple wouldn't want freak out the fanboi community by reveiling how many people return the iPhone 4 that can't hold a call and the flashless iPad that can't render 75 percent of the Internet.

We must be drinking some columbian kool aid to believe Apple is beating Microsoft at anything.

Exactly, this is the sort of pitiful thing that comes out for news like this.
post #25 of 88
Quote:
Originally Posted by AppleStud View Post

Who is this idiot writing these analyses? Anybody with an accounting 101 class under their belt could do this.

For your information, if you have followed stock analysis, Andy Zaky has been very acurate (usually in the top 10) in predicting the performance of Apple. The last quarter ending June 2010, he ranked #4 in predicting the revenue and EPS of Apple. There were quarters when he was even more accurate.

In fact, when it comes to Apple, there are more non-professional analysts who did better than those claiming to be professional financial analysts employed by big financial institutions.

The caveat is that these non-professionals focus mainly on Apple and a few other related companies. These non-professionals really take the time to go deeper into Apple.

CGC
post #26 of 88
Quote:
Originally Posted by cameronj View Post

What a terribly written article! Could he repeat himself more? And does he think that hyperbole makes his points stronger?

"Such arguments not only reek of the highest level of financial irrationality, but they are also rooted in a dangerously mislead ideology. "

Really? THAT in response to the suggestion that Apple and Microsoft are not similar companies operationally? Talk about drinking the Kool Aid. This guy is in love.

NO!? That in response to the suggestion that Apple and Microsoft are not comparable from a financial perspective BECAUSE they are not similar companies operationally.
Andy M. Zaky
Bullish Cross
www.bullcross.com
Reply
Andy M. Zaky
Bullish Cross
www.bullcross.com
Reply
post #27 of 88
Quote:
Originally Posted by andyzaky View Post

NO!? That in response to the suggestion that Apple and Microsoft are not comparable from a financial perspective BECAUSE they are not similar companies operationally.

Nit picking. The point is, you need to tone down the crazy rhetoric if you want to be taken seriously beyond the group of people whose hopes lie in AAPL going up.
post #28 of 88
Quote:
Originally Posted by anantksundaram View Post

Cut the snark, man. Yes, what Zaky covers here is not rocket science, but it is nice to have different perspectives and issues covered on AI.

More important, if you're so darned smart, write something on the topic and submit it to AI for publication. Shut up, o/w.

I have a real job at a real bank where i get paid to analyze companies, i don't need to freelance on apple fanboy sites.
post #29 of 88
Quote:
Originally Posted by digitalclips View Post

As with melting glaciers, the demise of Microsoft will accelerate. I doubt this will be a linear event.

I'm not sure what you were looking at but when I look at those graphs I see impressive growth from Apple, not the accelerated demise of Microsoft.
post #30 of 88
\ There is one thing about technology that disappoints me: That is tech-users' inability to get along, see eye to eye, or generally agree about much of anything. Every company has innovations, and every company has mistakes. It's the classic battle of the fanboys, but it NEVER ENDS.... I love Apple. There's never been such a centralized, clean integration of new technology into the mainstream. This is what pushes the boundaries of our lifestyle. Yet I own a Mac and a PC. People are so caught up in opinions that they don't WANT progress unless it's from their company of choice. Every big company has to contribute for things to advance smoothly, or we'll get stuck in a nasty loop.

Financials are fun but they're only part of the big picture.

keep it real AI
post #31 of 88
Quote:
Originally Posted by SDW2001 View Post

That's because you're ignorant, apparently. Try this thing called "Google." It's magical.

I searched "apple +deserve market cap" ON GOOGLE.

I found a Bloggingstocks.com article from last March, and a SeekingAlpha.com article from July. Add in the Appleinsder article, and it is fair to say that the question continues to mount.
post #32 of 88
Quote:
Originally Posted by raymondinperth View Post


This is why i am proud of being an ipad and iphone user.



Me too. It is the single biggest source of pride in my life. Any time I'm feeling down, I just remember that I own an iPhone, and I become proud of myself again.
post #33 of 88
Quote:
Originally Posted by digitalclips View Post

My guess is MS is five years away from irrelevancy.


Do you really think that there will be no PCs or servers in 5 years? What about word processing and spreadsheets?

We can only hope!
post #34 of 88
Comparing gross revenues of AAPL and MSFT is irrelevant. No two companies are exactly alike, and yes there are ways to compare two dissimilar companies.

While it is not "inappropriate" to compare a predominantly hardware-focused company with a predominantly software-focused company, it is inappropriate to tout gross revenues (as if it means something) while dismissing this fundamental difference.

In the end, a "fundamental comparison" would recognize that MSFT *can* "push more of its revenue to the bottom line" (i.e. profits) because APPL *must* push more of its revenue to the manufacturers that build its physical products.

AAPL will ALWAYS have a higher cost of revenue ratio because they must manufacture hardware. Unless AAPL can significantly grow its software and/or online services divisions, it will take *significantly* more gross revenue than MSFT in order to be more "profitable" than MSFT.

If you choose to ignore this basic concept when comparing these companies, you should reconsider whether participating in the equity markets makes the most sense.

AAPL has done an amazing job over the years, but using revenues as a measure for "full supremacy" and "dominance" seems like desperate Apple-vs-Microsoft fanboy fare. Both Dell and HP have much higher revenues than AAPL, so what does that mean?

"Crowning the supreme leader of the tech sector as a whole" when you've already arbitrarily narrowed down the list of candidates to the "two tech giants" AAPL and MSFT will certainly take a masterful combination of cherry-picked facts with convoluted, imbred logic.
post #35 of 88
Quote:
Originally Posted by Firefly7475 View Post

I'm not sure what you were looking at but when I look at those graphs I see impressive growth from Apple, not the accelerated demise of Microsoft.



Same thing.

There's an old joke:

Two campers saw a bear running towards them. ONe of them started to put on his running shoes. The other one asked him if he thought they would make him run faster than a bear.

The answer? I don't need to run faster than the bear. I just need to run faster than YOU!!!!


So all that Apple needs to do is run faster than Microsoft!!
post #36 of 88
Quote:
Originally Posted by AppleStud View Post

I have a real job at a real bank where i get paid to analyze companies, i don't need to freelance on apple fanboy sites.

Andy Zaky, whom you termed an "idiot" in your previous post leading to this latest, is on the basis of his record one of the best analysts of Apple performance. His quarterly revenue and EPS estimates for AAPL, along with his estimates of product line sales, have consistently scored among the closest to reality among all the amateur and professional analysts out there. See

http://tech.fortune.cnn.com/2010/07/...pple-analysts/

In the latest Fortune scorecard, he wasn't the closest of the bunch, but he was far from the worst. Some so-called Wall Street professionals make frankly terrible estimates time after time. Andy's been a lot closer to actual in previous quarters.

If a bank pays you to do company analysis, I have to wonder if your employer is getting its money's worth. Certainly your experience following AAPL is questionable; otherwise you'd know about the reputation of the individual you called an idiot. He knows what he's talking about. You don't.

I admit to being a Fanatical Moderate. I Disdain the Inane. Vyizderzominymororzizazizdenderizorziz?

Reply

I admit to being a Fanatical Moderate. I Disdain the Inane. Vyizderzominymororzizazizdenderizorziz?

Reply
post #37 of 88
Quote:
Originally Posted by AppleStud View Post

I have a real job at a real bank where i get paid to analyze companies, i don't need to freelance on apple fanboy sites.

This explains why most major banks have made such horrible investment decisions over the past few years. The quality of their analysts is obviously questionable.
post #38 of 88
Some things I agree with in the article:

It's fair to compare Apple and M$, not because it's fair to compare everyone. But because while apple and MS recieve most of their $ from different segments (business vs consumer electronics) both compete in the consumer electronics space with WinMo, Zune, XBox, Windiws.

MS's growth is slowing while apple continues to grow. This is not as obvious from the charts as made believe in the article, but in the area of consumer devices I think there is no question of who has been doing the most growth. I mean WinMo is one device launch from death, tablets are moving to android while netbooks run ubuntu.

Some things I'm skeptical on:

Apple will continue this type of growth well into 2012 and will for sure be far ahead of MS I think that apple has ridden the wave of transition to mobile devices. There has been a huge growth and innovation potential in the market and apple has taken the most of it. I don't think however such huge growth can be sustained through 2012.

Apple deserves to be a market cap leader in the industry. No question it does today, but keep in mind that the economy is hurting, which means the rich continue to spend as they are not affected, while the poor have held back. Rich want the best and go for apple products, while poor just want a machine that works. I think that when the economy comes back there will be a slight boost to apple and a big boost for PC industry, which might catapult MS back to the top. Hopefully that happens before 2012 (improvement in the economy that is).
--SHEFFmachine out
Da Bears!
Reply
--SHEFFmachine out
Da Bears!
Reply
post #39 of 88
Quote:
Originally Posted by shawnb View Post

Comparing gross revenues of AAPL and MSFT is irrelevant. No two companies are exactly alike, and yes there are ways to compare two dissimilar companies.

While it is not "inappropriate" to compare a predominantly hardware-focused company with a predominantly software-focused company, it is inappropriate to tout gross revenues (as if it means something) while dismissing this fundamental difference.

In the end, a "fundamental comparison" would recognize that MSFT *can* "push more of its revenue to the bottom line" (i.e. profits) because APPL *must* push more of its revenue to the manufacturers that build its physical products.

AAPL will ALWAYS have a higher cost of revenue ratio because they must manufacture hardware. Unless AAPL can significantly grow its software and/or online services divisions, it will take *significantly* more gross revenue than MSFT in order to be more "profitable" than MSFT.

If you choose to ignore this basic concept when comparing these companies, you should reconsider whether participating in the equity markets makes the most sense.

AAPL has done an amazing job over the years, but using revenues as a measure for "full supremacy" and "dominance" seems like desperate Apple-vs-Microsoft fanboy fare. Both Dell and HP have much higher revenues than AAPL, so what does that mean?

"Crowning the supreme leader of the tech sector as a whole" when you've already arbitrarily narrowed down the list of candidates to the "two tech giants" AAPL and MSFT will certainly take a masterful combination of cherry-picked facts with convoluted, imbred logic.

I guess you chose to patently ignore this part of the article which simply discredits your criticism:

"Yet, when it comes to questions as to which company ought to have a larger market capitalization, total revenue is but a single of several factors that should be considered. Net income growth, total net income, total net cash, cash flow, book value, total assets and the economic sensitivity of each company’s primary operations are just a few of those other key factors."

Sorry I didn't choose to write a full 350 page dissertation. I didn't cherry pick which variables to use either. This article is one about revenue. Not about which company is more fundamentally sound, or more deserving of the largest market cap in the tech industry.

You can in fact compare any two companies in the equity markets from a fundamental basis using financial ratios, and an assessment of economic risk. One company can be more fundamental sound than another company even though each company doesn't operate in the same sector. You can compare Apple to Walmart, Microsoft to Goldman Sachs and Exxon to Target.

Yet, when it comes to the portfolio theory of diversification, obviously a cross-sector analysis makes sense. But to patently conclude that two companies aren't comparable because they operate in different sectors is plainly wrong. I'm not going to keep addressing this issue because there's no point in quarreling with unresisting imbecility.
Andy M. Zaky
Bullish Cross
www.bullcross.com
Reply
Andy M. Zaky
Bullish Cross
www.bullcross.com
Reply
post #40 of 88
Quote:
Originally Posted by AppleStud View Post

I have a real job at a real bank where i get paid to analyze companies, i don't need to freelance on apple fanboy sites.

Good. Do your job, and spare us, AppleStud (not fanboy)!
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: AAPL Investors
AppleInsider › Forums › Investors › AAPL Investors › Earnings Preview: Apple to surpass Microsoft in revenue this quarter