I agree it is impossible to say this for sure because so many things can happen.
But what we do know is that PC sales are expected to stagnate into the future. That will effect MS OS and Office revenues. You guys are mostly looking at the past while the future is going in a different direction that will give Apple a new chance.
UMPC and Smartphone are expected to outpace PC sells into the future. Apple is just gearing up for this market. This is the future battleground. MS has been in this market for a number of years, but has had nowhere near the success it had of Windows PC.
The largest OS marketshare in Smartphones in Symbian at 71% while Windows only holds around 5%. Windows is mostly grabbing marketshare from Palm. If the iPhone were to gain 1% of the mobile market that would be 10 million phones and around 15% of the market which in one year would put Apple well ahead of MS on this new platform and new battle ground.
With in that 10 million iPhones sold Apple would earn at least $500 million in new revenue. In this recent quarter MS has lost $289 million in its currently unprofitable consumer electronics division. While Apple gained 4 billion in revenue from iPod and iTunes related products.
I think you're taking the analysis too literaly. The author even concedes that it's a purely mathematical exercise. However, it's still valid to look at how much Apple has closed the revenue gap over the last few years. It's also fair to say that Apple's prospects for sustained (not necessarily exponential) growth look bright, with a spread of new products/markets and a widely anticipated OS release in the near future. Certainly, MS is not about to collapse in financial ruin, but they do not have such a wide range of growth opportunites.
Either way, it's interesting to see Apple's recent success in comparison to MS. However, these days, it would possibly be more appropriate to compare them to other lifestyle companies, such as Sony?
I'm as big an Apple fan as they come, but that sort of analysis is just patently wrong. An X% growth rate achieved at a base of $5b is simply not transferrable to a base of, say $40b. Sometimes this is referred to as "the law of big numbers" or from the bottom side of the sheet as "the law of diminishing returns". It's why Dell's price has been so stagnant (among other reasons, of course)... they just have to work so very hard to achieve any measurable growth as a percent of their revenue, because their denominator is so considerable. Suffice to say, it will be an immense challenge for Apple to achieve that sort of scale in the time frame they project. But hey... don't get me wrong.... I'd love for Apple to make me eat crow
So you're basically arguing in favor if it happening, though you don't know it. What you're saying is that it's likely for MS to stagnate due to its size. Apple however has 1/3 to 1/2 the revenue though, so they have room.
What i've NEVER understood is this. Why do non-stock holders get so excited when their favorite company is making record breaking profits? Doesn't that directly say that these people are charging too much for something?
It just seems that people forget that they are consumers. And as consumers then we should be upset that we're overpaying for products rather than praising a company for their ability to mark up a product and con their loyal followers.
WOW... judging from some of the angry responses, a lot of Microsoft fans read AppleInsider.
Don't worry fellas... even if Apple passes Microsoft in overall revenue somewhere down the line, MS will probably still have near-dominant marketshare in PC operating systems. Apple changed the game by going into the consumer electronics market, an area MS is finding difficult to make profits in (don't EVEN bring up Xbox, MS is still trying to pay off the $5 billion or so they lost on their first-gen console).
I don't think the big boys in the Redmond boardrooms will care too much if the day comes when Apple beats them in revenue- its not that important, except symbolically. They are probably much more concerned about maintaining profits and wishing that their stock price could go somewhere else besides sideways. \
I got an email last week that said Islam is the fastest growing religion in the U.S. and that we will therefore soon have a large enough Muslim population to elect a Muslim president.
Same basic logic.
The likelier scenario for Apple to catch Microsoft in the revenue department is either a continued and accelerating erosion of Windows' share of the OS market or a (Google-style) shift from the OS paradigm to something else along with Apple growing its OS market share and continuing to make good choices in consumer product markets.
Why do non-stock holders get so excited when their favorite company is making record breaking profits? Doesn't that directly say that these people are charging too much for something?
Much of this new profit is coming from people who are buying their first Mac, not from people buying a new Mac.
Quote:
It just seems that people forget that they are consumers. And as consumers then we should be upset that we're overpaying for products rather than praising a company for their ability to mark up a product and con their loyal followers.
You get what you pay for. Most Mac people have used PC's while most PC people have never used a Mac. So their obviously is some difference that is worth the price.
My friend and I recently convinced her mother to retire her 8 year old blue iMac. It was running fine with Panther 10.3, Office 2004, iLife 05. She did not really want new computer, but honestly that iMac had just gotten too slow. She's used it for so long she didn't understand that it was slow. She bought the 17" iMac. Now she sees how slow that older computer was, but it still worked.
A friend of mine edits on Premiere Pro with a four year old Pentium 4 PC. He told me its takes about 4 hours for his computer build and burn a 2 hour DVD. On my three year old G5 with DVD Studio Pro it take about 20 minutes to build and burn a 2 hour DVD.
The likelier scenario for Apple to catch Microsoft in the revenue department is either a continued and accelerating erosion of Windows' share of the OS market or a (Google-style) shift from the OS paradigm to something else along with Apple growing its OS market share and continuing to make good choices in consumer product markets.
Its predicted that PC sales will slow and UMPC/Smartphone sales will surge.
WOW... judging from some of the angry responses, a lot of Microsoft fans read AppleInsider.
Don't worry fellas... even if Apple passes Microsoft in overall revenue somewhere down the line, MS will probably still have near-dominant marketshare in PC operating systems. Apple changed the game by going into the consumer electronics market, an area MS is finding difficult to make profits in (don't EVEN bring up Xbox, MS is still trying to pay off the $5 billion or so they lost on their first-gen console).
I don't think the big boys in the Redmond boardrooms will care too much if the day comes when Apple beats them in revenue- its not that important, except symbolically. They are probably much more concerned about maintaining profits and wishing that their stock price could go somewhere else besides sideways. \
Its not angry responses its just people are actually realistic and the curve on that graph is insane. It would be nice if it was true not because im a MS fan or a Apple fan but compitition breeds innovation and it also breeds pricing that is far more competitive.
However I believe ipods have peaked and can do nothing but drop in sales, the Mac/Intel craze is over any news is no big deal anymore, the iphone will fail badly and so will itv.
2006 is about as good as Apple will ever see. My prediction which isnt worth any more than anyone elses. Three years from now for all we know both could be out of business.
I think you're taking the analysis too literaly. The author even concedes that it's a purely mathematical exercise. However, it's still valid to look at how much Apple has closed the revenue gap over the last few years. It's also fair to say that Apple's prospects for sustained (not necessarily exponential) growth look bright, with a spread of new products/markets and a widely anticipated OS release in the near future. Certainly, MS is not about to collapse in financial ruin, but they do not have such a wide range of growth opportunites.
Either way, it's interesting to see Apple's recent success in comparison to MS. However, these days, it would possibly be more appropriate to compare them to other lifestyle companies, such as Sony?
J
No, there is nothing valid about this analysis.. it's not even an analysis.. it's guessing or putting non related info together or using only parts of info.. something people like to do with figures. especially online.
Although I'm very happy that Apple is doing well and I also think Apple is going in the right direction (away from the clumsy computer that has to do everything towards small and embedded computer based devices) There is nothing as unpredictable as technology.
Apple's market share is 80% in the iPod world, without which that curve would look dramatically different. Apple needs to maintain a reasonable market share in order to keep top-shelf software titles available on the platform. One could argue based on the software availability that their market share has been just above that line recently, and needs to stay there or grow to keep the platform viable.
I think your numbers are off. My rough guess is that in the iPod world, Apple's market share is about 100%...
However I believe ipods have peaked and can do nothing but drop in sales, the Mac/Intel craze is over any news is no big deal anymore, the iphone will fail badly and so will itv.
I think you're right in the rest of your analysis, but I think that iPods will continue to sell decently, the AppleTV will do OK, and the iPhone will do OK as well. Apple's stellar performance may be an anomaly, but they will still see solid growth for the near future. My feeling is that if Apple fails to do fantastically in either arena, then they will be seen as having failed to do well at all, regardless of the small success. That could be a real PR problem for Apple, since with the G4 cube, it was more the shame at having produced a flagship computer that was problematic and expensive than the actual economic issue with building it.
Its not angry responses its just people are actually realistic and the curve on that graph is insane. It would be nice if it was true not because im a MS fan or a Apple fan but compitition breeds innovation and it also breeds pricing that is far more competitive.
However I believe ipods have peaked and can do nothing but drop in sales, the Mac/Intel craze is over any news is no big deal anymore, the iphone will fail badly and so will itv.
2006 is about as good as Apple will ever see. My prediction which isnt worth any more than anyone elses. Three years from now for all we know both could be out of business.
I dunno... people have been saying 'Apple has peaked' for the past several years now, and they've always been wrong.
I don't think iPods have come anywhere near peaking, actually... the vast majority of people, even if we're talking just US/Europe/Asia, still don't have one. And let's not forget about Apple's entry into the billion-unit a year cellphone market. Mac marketshare also could continue to increase, provided Apple gets a bit more aggressive in their pricing.
If I had to lay odds, I'd say its 5 to 2 that '07 is even better than '06, and better than that for '08 being gangbusters (when iPhone hits full stride). But we'll see. 8)
Comments
For your information, the first flying car was prototyped around the close of 2009. That's all I can say without messing up your future.
Wrong. Flying cars... he didn't say hovercraft, or jet-powered cars, or spinnners, mind you... have been around since the 1910s.
But what we do know is that PC sales are expected to stagnate into the future. That will effect MS OS and Office revenues. You guys are mostly looking at the past while the future is going in a different direction that will give Apple a new chance.
UMPC and Smartphone are expected to outpace PC sells into the future. Apple is just gearing up for this market. This is the future battleground. MS has been in this market for a number of years, but has had nowhere near the success it had of Windows PC.
The largest OS marketshare in Smartphones in Symbian at 71% while Windows only holds around 5%. Windows is mostly grabbing marketshare from Palm. If the iPhone were to gain 1% of the mobile market that would be 10 million phones and around 15% of the market which in one year would put Apple well ahead of MS on this new platform and new battle ground.
With in that 10 million iPhones sold Apple would earn at least $500 million in new revenue. In this recent quarter MS has lost $289 million in its currently unprofitable consumer electronics division. While Apple gained 4 billion in revenue from iPod and iTunes related products.
Wrong. Flying cars... he didn't say hovercraft, or jet-powered cars, or spinnners, mind you... have been around since the 1910s.
He said 2009 which hasn't even gotten here yet. Sarcasm......
Either way, it's interesting to see Apple's recent success in comparison to MS. However, these days, it would possibly be more appropriate to compare them to other lifestyle companies, such as Sony?
J
I'm as big an Apple fan as they come, but that sort of analysis is just patently wrong. An X% growth rate achieved at a base of $5b is simply not transferrable to a base of, say $40b. Sometimes this is referred to as "the law of big numbers" or from the bottom side of the sheet as "the law of diminishing returns". It's why Dell's price has been so stagnant (among other reasons, of course)... they just have to work so very hard to achieve any measurable growth as a percent of their revenue, because their denominator is so considerable. Suffice to say, it will be an immense challenge for Apple to achieve that sort of scale in the time frame they project. But hey... don't get me wrong.... I'd love for Apple to make me eat crow
So you're basically arguing in favor if it happening, though you don't know it. What you're saying is that it's likely for MS to stagnate due to its size. Apple however has 1/3 to 1/2 the revenue though, so they have room.
.....
How many versions of Office and Windows can consumers and corporations buy?
Long Answer: A PHUKIN BOAT LOAD!
Short Answer: A LOT.
Just how do you think MS makes a hefty profit while burning money on projects such as XBox and Zune?
26M Game Consoles
94M Digital Cameras
135M MP3 Players
209M PCs
957M Mobile Phones
Keep in mind that Apple's revenues are primarily based on 2 things
About 5% of the PC market
About 75% of the MP3 Player market
Each contributes about half of Apple's revenues
Microsoft's revenues are based on a more diversified base
Windows desktop OS 30%
Office 25%
Servers & Tools 25%
Home & Entertainment 10%
MSN 7%
Business Solutions 2%
Windows Mobile 1%
As you can see Microsoft's Windows Mobile strategy hasn't really taken off.
This market is still wide open and looking for the killer solution.
Who is best positioned to deliver?
It just seems that people forget that they are consumers. And as consumers then we should be upset that we're overpaying for products rather than praising a company for their ability to mark up a product and con their loyal followers.
Don't worry fellas... even if Apple passes Microsoft in overall revenue somewhere down the line, MS will probably still have near-dominant marketshare in PC operating systems. Apple changed the game by going into the consumer electronics market, an area MS is finding difficult to make profits in (don't EVEN bring up Xbox, MS is still trying to pay off the $5 billion or so they lost on their first-gen console).
I don't think the big boys in the Redmond boardrooms will care too much if the day comes when Apple beats them in revenue- its not that important, except symbolically. They are probably much more concerned about maintaining profits and wishing that their stock price could go somewhere else besides sideways.
Not only has Apple been increasing revenue but it has also achieved record profitability.
Same basic logic.
The likelier scenario for Apple to catch Microsoft in the revenue department is either a continued and accelerating erosion of Windows' share of the OS market or a (Google-style) shift from the OS paradigm to something else along with Apple growing its OS market share and continuing to make good choices in consumer product markets.
Why do non-stock holders get so excited when their favorite company is making record breaking profits? Doesn't that directly say that these people are charging too much for something?
Much of this new profit is coming from people who are buying their first Mac, not from people buying a new Mac.
It just seems that people forget that they are consumers. And as consumers then we should be upset that we're overpaying for products rather than praising a company for their ability to mark up a product and con their loyal followers.
You get what you pay for. Most Mac people have used PC's while most PC people have never used a Mac. So their obviously is some difference that is worth the price.
My friend and I recently convinced her mother to retire her 8 year old blue iMac. It was running fine with Panther 10.3, Office 2004, iLife 05. She did not really want new computer, but honestly that iMac had just gotten too slow. She's used it for so long she didn't understand that it was slow. She bought the 17" iMac. Now she sees how slow that older computer was, but it still worked.
A friend of mine edits on Premiere Pro with a four year old Pentium 4 PC. He told me its takes about 4 hours for his computer build and burn a 2 hour DVD. On my three year old G5 with DVD Studio Pro it take about 20 minutes to build and burn a 2 hour DVD.
I'll pay a little more for that.
The likelier scenario for Apple to catch Microsoft in the revenue department is either a continued and accelerating erosion of Windows' share of the OS market or a (Google-style) shift from the OS paradigm to something else along with Apple growing its OS market share and continuing to make good choices in consumer product markets.
Its predicted that PC sales will slow and UMPC/Smartphone sales will surge.
WOW... judging from some of the angry responses, a lot of Microsoft fans read AppleInsider.
Don't worry fellas... even if Apple passes Microsoft in overall revenue somewhere down the line, MS will probably still have near-dominant marketshare in PC operating systems. Apple changed the game by going into the consumer electronics market, an area MS is finding difficult to make profits in (don't EVEN bring up Xbox, MS is still trying to pay off the $5 billion or so they lost on their first-gen console).
I don't think the big boys in the Redmond boardrooms will care too much if the day comes when Apple beats them in revenue- its not that important, except symbolically. They are probably much more concerned about maintaining profits and wishing that their stock price could go somewhere else besides sideways.
Its not angry responses its just people are actually realistic and the curve on that graph is insane. It would be nice if it was true not because im a MS fan or a Apple fan but compitition breeds innovation and it also breeds pricing that is far more competitive.
However I believe ipods have peaked and can do nothing but drop in sales, the Mac/Intel craze is over any news is no big deal anymore, the iphone will fail badly and so will itv.
2006 is about as good as Apple will ever see. My prediction which isnt worth any more than anyone elses. Three years from now for all we know both could be out of business.
I think you're taking the analysis too literaly. The author even concedes that it's a purely mathematical exercise. However, it's still valid to look at how much Apple has closed the revenue gap over the last few years. It's also fair to say that Apple's prospects for sustained (not necessarily exponential) growth look bright, with a spread of new products/markets and a widely anticipated OS release in the near future. Certainly, MS is not about to collapse in financial ruin, but they do not have such a wide range of growth opportunites.
Either way, it's interesting to see Apple's recent success in comparison to MS. However, these days, it would possibly be more appropriate to compare them to other lifestyle companies, such as Sony?
J
No, there is nothing valid about this analysis.. it's not even an analysis.. it's guessing or putting non related info together or using only parts of info.. something people like to do with figures. especially online.
Although I'm very happy that Apple is doing well and I also think Apple is going in the right direction (away from the clumsy computer that has to do everything towards small and embedded computer based devices) There is nothing as unpredictable as technology.
Apple's market share is 80% in the iPod world, without which that curve would look dramatically different. Apple needs to maintain a reasonable market share in order to keep top-shelf software titles available on the platform. One could argue based on the software availability that their market share has been just above that line recently, and needs to stay there or grow to keep the platform viable.
I think your numbers are off. My rough guess is that in the iPod world, Apple's market share is about 100%...
However I believe ipods have peaked and can do nothing but drop in sales, the Mac/Intel craze is over any news is no big deal anymore, the iphone will fail badly and so will itv.
I think you're right in the rest of your analysis, but I think that iPods will continue to sell decently, the AppleTV will do OK, and the iPhone will do OK as well. Apple's stellar performance may be an anomaly, but they will still see solid growth for the near future. My feeling is that if Apple fails to do fantastically in either arena, then they will be seen as having failed to do well at all, regardless of the small success. That could be a real PR problem for Apple, since with the G4 cube, it was more the shame at having produced a flagship computer that was problematic and expensive than the actual economic issue with building it.
What i've NEVER understood is this. Why do non-stock holders get so excited when their favorite company is making record breaking profits?
Actually, I own Apple stock. Am very happy about it too, obvously. Cigar?
.
Its not angry responses its just people are actually realistic and the curve on that graph is insane. It would be nice if it was true not because im a MS fan or a Apple fan but compitition breeds innovation and it also breeds pricing that is far more competitive.
However I believe ipods have peaked and can do nothing but drop in sales, the Mac/Intel craze is over any news is no big deal anymore, the iphone will fail badly and so will itv.
2006 is about as good as Apple will ever see. My prediction which isnt worth any more than anyone elses. Three years from now for all we know both could be out of business.
I dunno... people have been saying 'Apple has peaked' for the past several years now, and they've always been wrong.
I don't think iPods have come anywhere near peaking, actually... the vast majority of people, even if we're talking just US/Europe/Asia, still don't have one. And let's not forget about Apple's entry into the billion-unit a year cellphone market. Mac marketshare also could continue to increase, provided Apple gets a bit more aggressive in their pricing.
If I had to lay odds, I'd say its 5 to 2 that '07 is even better than '06, and better than that for '08 being gangbusters (when iPhone hits full stride). But we'll see. 8)