I have stock in both Apple and MS and this is some good news. Apple's stock has dropped huge recently and been hanging around $96, I actually purchased more @ $87, while MS has stayed within the $25 range.
I know this is an Apple biased site but there is some haters here to a point where you see rage instead of sensibility.
I'm invested in both since they are both great companies. I use both Vista, no problems to date on my HP desktop and Vaio laptop, and OS X with my wife's macbook. I like both operating systems and have no biased to one as long as I have MS Office available. I have encountered the same amount of crashes on both systems but have the patience to reboot, no biggie. I can say this about Vista, it may have stubbled out the blocks but the system presently has been stable IMO. Vista has the stereotype of the hospitality industry where one complaint = 10 complaints, while OS X problems are characterized as "glitches" where it will fix itself but continue on. I have some friends who can't comprehend that OS X has problems also just like Vista, it's just not magnified as much.
This is my first post, it may seem I'm defending MS but I'm not. I'm just speaking of experience. I currently own two iPhones, one iPod classic, plus my wife's Macbook.
I think Apple fans are the most sensible people but there is also fans that have hatred of MS running in their blood.
Software unti sales, sure, but if you only add up Apple's personal computing revenue and Microsoft's personal computing revenue wouldn't Apple still have about 1/4 of the revenue MS makes from 90% marketshare? MS' still kicks financial butt, but not nearly as much as OS marketshare would imply.
i'm sorry but are you comparing apple's hardware + software sales vs. MS's OS license sales? so if you're comparing units where it's priced at $1000-$3000 (hardware + OS) versus a Dell license of $100-$300, then you don't have to sell many bundled units to look respectable against the smaller units
i'm sorry but are you comparing apple's hardware + software sales vs. MS's OS license sales? so if you're comparing units where it's priced at $1000-$3000 (hardware + OS) versus a Dell license of $100-$300, then you don't have to sell many bundled units to look respectable against the smaller units
i.e., there is no "Microsoft computer"
Yes, you made a post suggesting the removal of Apple's and MS' non-PC business. You then stated that "MS still dwarfs everything". I then pointed out that if you remove the products you suggesting (ie: only focusing on personal computing revenue) that MS is only takes in about 4x the revenue. The point being that OS percentage may look impressive, but HW sales count for a lot more in both revenue and profit.
Whoever wrote this is an idiot. MS is more profitable (both overall and by revenue), has a greater market share and distributes cash back to shareholders. Boasting about how much cash Apple has is idiotic. Anyone in finance will tell you that holding on to cash like that is inefficient, irresponsible and bad for shareholders. It's called a lazy balance sheet. The cash is going to earn a low rate of interest and would be better in the hands of shareholders who could reinvest it. Apple should do what MS has been doing: share buy-backs, dividends and acquisitions. It should not hold on to billions in cash. Apple is doing well, but the fact that you claim that MS's results are embarrassing only makes you look obtuse.
No, dividends are not the reasons companies exist. Companies exist to make profits.
Which are then meant to be given to the people that own the company. There's no point buying part of a company if your not getting a dividend out of it. Think about it, if you start a company your aim is to make money from the profits it makes, you don't just leave it all in the companies bank account.
Quote:
Originally Posted by Hiro
Apple did not "copy" the Xerox GUI. They got permission to use it as the wunderkinds in charge Xerox-PARC couldn't see how it would be applicable to their document reproduction business.
When you get permission it is not "copy", but "evolved from", or "originated with". The original idea folks still got all the credit for coming up with it and thanks was given for allowing the use.
Still not self invented as Apple fans seem to like to believe everything Apple do is.
You're right about the 75% growth, which is a minor detail, since as you note, it's still a very high growth rate. I calculated that a year ago, if you did non-GAAP accounting you might have $6.6B in sales, not $6.2B. Compared to either number $11.7B is huge!
Where you're wrong is the second point you make. If you listened to the conference call, you would have heard Oppenheimer go thru how they calculated the non-GAAP figs. They backed out the previous deferred revenue, before adding in the current revenue. They're NOT that stupid. And, GAAP would allow this kind of accounting if Apple would only charge for significant feature upgrades to the iPhone and ATV. So far, this kind of accounting has saved iPhone users, one fee over the last 15 months. I think Apple has lost far more in analyst confusion than it has gained in goodwill by not charging its iPhone owners $10 for one new feature set.
Point taken, However, GAAP would definitely allow for them to push up point updates without charging, companies do it all the time, and do not use subscription accounting(this is just the excuse Apple gives to sound good to investors). I believe the real reason apple reports like this is to manage spikes in the reported numbers, and to keep more consistent earnings growth. Yes it is easy to derive the real numbers with a little bit of algebra, but companies like to report certain numbers, for certain reasons. Look at the press the reported numbers get, the footnotes don't get the press.
This being said I agree with most of your retorts.
Which are then meant to be given to the people that own the company. There's no point buying part of a company if your not getting a dividend out of it. Think about it, if you start a company your aim is to make money from the profits it makes, you don't just leave it all in the companies bank account.
I agree, but Hiro is correct about the timing of the dividend. Companies can and should have a declared dividend policy, and distribute dividends regularly rather than in one giant lump as MS did. It would kind of make sense if this was a one-time lump, together with a "from now on" policy of quarterly or annual dividends on a smaller scale, but that is not what they did. This excludes them from being considered a "value stock".
This is based only on the limited sample that is covered by your experience. There are plenty of companies that don't use Office, and at my University, a good 1/3 of all my colleagues and students use iWork instead of Office. So before you go making these claims, I suggest you look outside of the realm of your own navel.
So you criticized his use of a limited sample and then used one of your own?
Whoever wrote this is an idiot. MS is more profitable (both overall and by revenue), has a greater market share and distributes cash back to shareholders. Boasting about how much cash Apple has is idiotic. Anyone in finance will tell you that holding on to cash like that is inefficient, irresponsible and bad for shareholders. It's called a lazy balance sheet. The cash is going to earn a low rate of interest and would be better in the hands of shareholders who could reinvest it. Apple should do what MS has been doing: share buy-backs, dividends and acquisitions. It should not hold on to billions in cash. Apple is doing well, but the fact that you claim that MS's results are embarrassing only makes you look obtuse.
Steve would look pretty stupid if he distributed cash as dividends, and then ended up going bankrupt during the recession because he could not borrow the needed cash from the broken capital markets. I am happy he is holding on to the cash.
Where else would you invest the money anyway? Every other investment vehicle is crap right now. If he distributed cash I would just reinvest it in Apple stock.
Quote:
Originally Posted by timgriff84
Which are then meant to be given to the people that own the company. There's no point buying part of a company if your not getting a dividend out of it. Think about it, if you start a company your aim is to make money from the profits it makes, you don't just leave it all in the companies bank account.
Current dividends + discounted value of potential future dividends are what matter. The reason why Apple does not need to issue a dividend is that people expect the earnings to turn into dividends in the future. Earnings are a proxy value for the dividends that could have been issued (or will be issued in the future), so the stock has value even if dividends are not currently issued.
Current dividends + discounted value of potential future dividends are what matter. The reason why Apple does not need to issue a dividend is that people expect the earnings to turn into dividends in the future. Earnings are a proxy value for the dividends that could have been issued (or will be issued in the future), so the stock has value even if dividends are not currently issued.
That is absolutely right. The problem is that there was a trend by tech companies to never ever distribute any dividend. Microsoft broke this mold, but in a weird way.
Apple has enough cash to sustain it through 6-7 years of zero sales. That is far too much for a cushion.
I saw it as a way for the majority shareholders to get the cash out of the company for themselves, at the expense of smaller shareholders.
I wonder who the majority shareholders are ...
I wouldn't disagree with that. Especially if the big shareholders quietly threatened to walk and sell their positions. Comes out to the same thing I mentioned earlier though, a lame attempt to appease shareholders for fill-in-the-blank-reason.
SEARCH=MS invented it, it came out first in OSX, then ViSTA
RESTORE=Then Time Machine, when it works of course.
You realize the Dock was invented around 1987/8 by NeXT??? About a decade and a half before MS brought a variable called DockProperty to their .NET framework. And that Apple bought NeXT?
MS's DockProperty serves an entirely different purpose than NeXT's or OS X's Dock.
Do we want to mention the OS 8.5 appearance of Sherlock? In 1998? About 2 years before Windows Desktop Search search debuted in Win2K? Both companies had ping-ponged which implementation was better since.
So if you are going to say some group is moronic, I suggest you look in the mirror then check your facts before you paint yourself with your own label.
On the not moronic front, just a less than wonderful choice for an example: I have yet to talk to a single human being that successfully used Windows Restore. Yes it beat TM to deployment, but I know of several circumstances where colleagues have used TM to recover successfully following: a stolen MBP, orange juice in the keyboard of a MBP, HD failure in a original MacPro, Hard drive upgrades(3 different users, one was me), HD failure & replacement following MB falling off a lectern. System restore can't do ANY of that!
Microsoft has 9X the market share but only 2.33X the market share.
I believe Apple could reach a very happy balance with only 20-25% market share.
I hope they avoid the pitfalls of getting too big.
Reminds me a of an old story.
Two business men were discussing Apple and Microsoft.
One man dismissed Apple as having only 5% of the market.
The other man reminded him..."Yes but it is the top 5% of the market."
-->
Apple has 95% market share to gain. Microsoft has nothing but 95% to loose to others. Apple has a very strong product portfolio and a loyal customer base. Microsoft has only the OS and few applications and few peripherals and a customer base which is shrinking. Tell me how many percentage is happy with the Vista and 'nograding' technology that comes with Vista (if you want to buy XP - you have to buy Vista at a higher price and downgrade to XP by downloading XP again)
It is all Apple to blame for the openness that they gave the Leopard preview much before the actual release - Microsoft used it as a platform to 'copy'. Now that snow Leopard is not so 'open' Microsoft and Balmer has no clue on what it has. Windows 7 is going to be more joke than Vista. Common give me a break - how can a mega super patchwork of windows compete with Leopard?
Steve would look pretty stupid if he distributed cash as dividends, and then ended up going bankrupt during the recession because he could not borrow the needed cash from the broken capital markets. I am happy he is holding on to the cash.
Where else would you invest the money anyway? Every other investment vehicle is crap right now. If he distributed cash I would just reinvest it in Apple stock.
Current dividends + discounted value of potential future dividends are what matter. The reason why Apple does not need to issue a dividend is that people expect the earnings to turn into dividends in the future. Earnings are a proxy value for the dividends that could have been issued (or will be issued in the future), so the stock has value even if dividends are not currently issued.
Exactly, you could reinvest it in APPL. You could do whatever you wanted with the money. Invest it in VW maybe. The point is, it's the shareholders' cash and not Steve's. It is unnecessary to hold on to that amount of money. Apple is unlikely to go bankrupt with over 5 billion in cash, let alone 20. Apple is doing well, it should at least distribute part of its income so shareholders can use it as they will.
No. It is not the boards job to put found cash in shareholders pockets today. It is the Boards job to bring the best long term value to the shareholders, and it is debatable if a large one-time dividend qualifies as best value when looked at over the long term.
Exactly, you could reinvest it in APPL. You could do whatever you wanted with the money. Invest it in VW maybe. The point is, it's the shareholders' cash and not Steve's. It is unnecessary to hold on to that amount of money. Apple is unlikely to go bankrupt with over 5 billion in cash, let alone 20. Apple is doing well, it should at least distribute part of its income so shareholders can use it as they will.
Ford distributed 20 billion a few years back, bet they feel pretty stupid now. Japan went through our current pain 25 years ago, and their economy stock market has gone down ever since - I want Apple to keep the money at least until we get out of this mess.
But it doesn't matter that much, I sold my apple stake at $107. Hopefully they drop back to 90 and I will buy it back again - one more run from 90 to 107 and I will be green for the year.
No. It is not the boards job to put found cash in shareholders pockets today. It is the Boards job to bring the best long term value to the shareholders, and it is debatable if a large one-time dividend qualifies as best value when looked at over the long term.
There is no need for a one time dividend. That's the point. The money should be distributed progressively, as the profit is made. What the best value for shareholders is will vary from shareholder to shareholder, but it certainly won't arise through holding excessive amounts of cash. What is Apple doing with the money? Earning 2% on it? That is an awful ROI. Smart investors can make 10x that even in the current economic climate.
Comments
I know this is an Apple biased site but there is some haters here to a point where you see rage instead of sensibility.
I'm invested in both since they are both great companies. I use both Vista, no problems to date on my HP desktop and Vaio laptop, and OS X with my wife's macbook. I like both operating systems and have no biased to one as long as I have MS Office available. I have encountered the same amount of crashes on both systems but have the patience to reboot, no biggie. I can say this about Vista, it may have stubbled out the blocks but the system presently has been stable IMO. Vista has the stereotype of the hospitality industry where one complaint = 10 complaints, while OS X problems are characterized as "glitches" where it will fix itself but continue on. I have some friends who can't comprehend that OS X has problems also just like Vista, it's just not magnified as much.
This is my first post, it may seem I'm defending MS but I'm not. I'm just speaking of experience. I currently own two iPhones, one iPod classic, plus my wife's Macbook.
I think Apple fans are the most sensible people but there is also fans that have hatred of MS running in their blood.
Software unti sales, sure, but if you only add up Apple's personal computing revenue and Microsoft's personal computing revenue wouldn't Apple still have about 1/4 of the revenue MS makes from 90% marketshare? MS' still kicks financial butt, but not nearly as much as OS marketshare would imply.
i'm sorry but are you comparing apple's hardware + software sales vs. MS's OS license sales? so if you're comparing units where it's priced at $1000-$3000 (hardware + OS) versus a Dell license of $100-$300, then you don't have to sell many bundled units to look respectable against the smaller units
i.e., there is no "Microsoft computer"
i'm sorry but are you comparing apple's hardware + software sales vs. MS's OS license sales? so if you're comparing units where it's priced at $1000-$3000 (hardware + OS) versus a Dell license of $100-$300, then you don't have to sell many bundled units to look respectable against the smaller units
i.e., there is no "Microsoft computer"
Yes, you made a post suggesting the removal of Apple's and MS' non-PC business. You then stated that "MS still dwarfs everything". I then pointed out that if you remove the products you suggesting (ie: only focusing on personal computing revenue) that MS is only takes in about 4x the revenue. The point being that OS percentage may look impressive, but HW sales count for a lot more in both revenue and profit.
No, dividends are not the reasons companies exist. Companies exist to make profits.
Which are then meant to be given to the people that own the company. There's no point buying part of a company if your not getting a dividend out of it. Think about it, if you start a company your aim is to make money from the profits it makes, you don't just leave it all in the companies bank account.
Apple did not "copy" the Xerox GUI. They got permission to use it as the wunderkinds in charge Xerox-PARC couldn't see how it would be applicable to their document reproduction business.
When you get permission it is not "copy", but "evolved from", or "originated with". The original idea folks still got all the credit for coming up with it and thanks was given for allowing the use.
Still not self invented as Apple fans seem to like to believe everything Apple do is.
@ruffryder,
You're right about the 75% growth, which is a minor detail, since as you note, it's still a very high growth rate. I calculated that a year ago, if you did non-GAAP accounting you might have $6.6B in sales, not $6.2B. Compared to either number $11.7B is huge!
Where you're wrong is the second point you make. If you listened to the conference call, you would have heard Oppenheimer go thru how they calculated the non-GAAP figs. They backed out the previous deferred revenue, before adding in the current revenue. They're NOT that stupid. And, GAAP would allow this kind of accounting if Apple would only charge for significant feature upgrades to the iPhone and ATV. So far, this kind of accounting has saved iPhone users, one fee over the last 15 months. I think Apple has lost far more in analyst confusion than it has gained in goodwill by not charging its iPhone owners $10 for one new feature set.
Point taken, However, GAAP would definitely allow for them to push up point updates without charging, companies do it all the time, and do not use subscription accounting(this is just the excuse Apple gives to sound good to investors). I believe the real reason apple reports like this is to manage spikes in the reported numbers, and to keep more consistent earnings growth. Yes it is easy to derive the real numbers with a little bit of algebra, but companies like to report certain numbers, for certain reasons. Look at the press the reported numbers get, the footnotes don't get the press.
This being said I agree with most of your retorts.
Which are then meant to be given to the people that own the company. There's no point buying part of a company if your not getting a dividend out of it. Think about it, if you start a company your aim is to make money from the profits it makes, you don't just leave it all in the companies bank account.
I agree, but Hiro is correct about the timing of the dividend. Companies can and should have a declared dividend policy, and distribute dividends regularly rather than in one giant lump as MS did. It would kind of make sense if this was a one-time lump, together with a "from now on" policy of quarterly or annual dividends on a smaller scale, but that is not what they did. This excludes them from being considered a "value stock".
The day 25% of users know about the Mac, Microsoft and Windows will be history in three years.
+80% of consumers will accept/put up with mediocrity.
My goodness, why do pure Apple people refuse to act like idiots...
???
Because most of them aren't idiots.
Why should they act like something they aren't?
"Everyone still runs Office".
This is based only on the limited sample that is covered by your experience. There are plenty of companies that don't use Office, and at my University, a good 1/3 of all my colleagues and students use iWork instead of Office. So before you go making these claims, I suggest you look outside of the realm of your own navel.
So you criticized his use of a limited sample and then used one of your own?
Whoever wrote this is an idiot. MS is more profitable (both overall and by revenue), has a greater market share and distributes cash back to shareholders. Boasting about how much cash Apple has is idiotic. Anyone in finance will tell you that holding on to cash like that is inefficient, irresponsible and bad for shareholders. It's called a lazy balance sheet. The cash is going to earn a low rate of interest and would be better in the hands of shareholders who could reinvest it. Apple should do what MS has been doing: share buy-backs, dividends and acquisitions. It should not hold on to billions in cash. Apple is doing well, but the fact that you claim that MS's results are embarrassing only makes you look obtuse.
Steve would look pretty stupid if he distributed cash as dividends, and then ended up going bankrupt during the recession because he could not borrow the needed cash from the broken capital markets. I am happy he is holding on to the cash.
Where else would you invest the money anyway? Every other investment vehicle is crap right now. If he distributed cash I would just reinvest it in Apple stock.
Which are then meant to be given to the people that own the company. There's no point buying part of a company if your not getting a dividend out of it. Think about it, if you start a company your aim is to make money from the profits it makes, you don't just leave it all in the companies bank account.
Current dividends + discounted value of potential future dividends are what matter. The reason why Apple does not need to issue a dividend is that people expect the earnings to turn into dividends in the future. Earnings are a proxy value for the dividends that could have been issued (or will be issued in the future), so the stock has value even if dividends are not currently issued.
Current dividends + discounted value of potential future dividends are what matter. The reason why Apple does not need to issue a dividend is that people expect the earnings to turn into dividends in the future. Earnings are a proxy value for the dividends that could have been issued (or will be issued in the future), so the stock has value even if dividends are not currently issued.
That is absolutely right. The problem is that there was a trend by tech companies to never ever distribute any dividend. Microsoft broke this mold, but in a weird way.
Apple has enough cash to sustain it through 6-7 years of zero sales. That is far too much for a cushion.
Apple has enough cash to sustain it through 6-7 years of zero sales. That is far too much for a cushion.
Unless they plan on spending it, to buy Adobe say (or even better, to make a great photoshop competitor).
I saw it as a way for the majority shareholders to get the cash out of the company for themselves, at the expense of smaller shareholders.
I wonder who the majority shareholders are ...
I wouldn't disagree with that. Especially if the big shareholders quietly threatened to walk and sell their positions. Comes out to the same thing I mentioned earlier though, a lame attempt to appease shareholders for fill-in-the-blank-reason.
Please PEOPLE.
Why are most ANTI MS users morons!!!
Dock = google YZ Dock, original NOT APPLE.
SEARCH=MS invented it, it came out first in OSX, then ViSTA
RESTORE=Then Time Machine, when it works of course.
You realize the Dock was invented around 1987/8 by NeXT??? About a decade and a half before MS brought a variable called DockProperty to their .NET framework. And that Apple bought NeXT?
MS's DockProperty serves an entirely different purpose than NeXT's or OS X's Dock.
Do we want to mention the OS 8.5 appearance of Sherlock? In 1998? About 2 years before Windows Desktop Search search debuted in Win2K? Both companies had ping-ponged which implementation was better since.
So if you are going to say some group is moronic, I suggest you look in the mirror then check your facts before you paint yourself with your own label.
On the not moronic front, just a less than wonderful choice for an example: I have yet to talk to a single human being that successfully used Windows Restore. Yes it beat TM to deployment, but I know of several circumstances where colleagues have used TM to recover successfully following: a stolen MBP, orange juice in the keyboard of a MBP, HD failure in a original MacPro, Hard drive upgrades(3 different users, one was me), HD failure & replacement following MB falling off a lectern. System restore can't do ANY of that!
According to Google Finance...
MSFT: 198.86B
APPL: 85.62B
Microsoft has 9X the market share but only 2.33X the market share.
I believe Apple could reach a very happy balance with only 20-25% market share.
I hope they avoid the pitfalls of getting too big.
Reminds me a of an old story.
Two business men were discussing Apple and Microsoft.
One man dismissed Apple as having only 5% of the market.
The other man reminded him..."Yes but it is the top 5% of the market."
-->
Apple has 95% market share to gain. Microsoft has nothing but 95% to loose to others. Apple has a very strong product portfolio and a loyal customer base. Microsoft has only the OS and few applications and few peripherals and a customer base which is shrinking. Tell me how many percentage is happy with the Vista and 'nograding' technology that comes with Vista (if you want to buy XP - you have to buy Vista at a higher price and downgrade to XP by downloading XP again)
It is all Apple to blame for the openness that they gave the Leopard preview much before the actual release - Microsoft used it as a platform to 'copy'. Now that snow Leopard is not so 'open' Microsoft and Balmer has no clue on what it has. Windows 7 is going to be more joke than Vista. Common give me a break - how can a mega super patchwork of windows compete with Leopard?
<--
Steve would look pretty stupid if he distributed cash as dividends, and then ended up going bankrupt during the recession because he could not borrow the needed cash from the broken capital markets. I am happy he is holding on to the cash.
Where else would you invest the money anyway? Every other investment vehicle is crap right now. If he distributed cash I would just reinvest it in Apple stock.
Current dividends + discounted value of potential future dividends are what matter. The reason why Apple does not need to issue a dividend is that people expect the earnings to turn into dividends in the future. Earnings are a proxy value for the dividends that could have been issued (or will be issued in the future), so the stock has value even if dividends are not currently issued.
Exactly, you could reinvest it in APPL. You could do whatever you wanted with the money. Invest it in VW maybe. The point is, it's the shareholders' cash and not Steve's. It is unnecessary to hold on to that amount of money. Apple is unlikely to go bankrupt with over 5 billion in cash, let alone 20. Apple is doing well, it should at least distribute part of its income so shareholders can use it as they will.
Exactly, you could reinvest it in APPL. You could do whatever you wanted with the money. Invest it in VW maybe. The point is, it's the shareholders' cash and not Steve's. It is unnecessary to hold on to that amount of money. Apple is unlikely to go bankrupt with over 5 billion in cash, let alone 20. Apple is doing well, it should at least distribute part of its income so shareholders can use it as they will.
Ford distributed 20 billion a few years back, bet they feel pretty stupid now. Japan went through our current pain 25 years ago, and their economy stock market has gone down ever since - I want Apple to keep the money at least until we get out of this mess.
But it doesn't matter that much, I sold my apple stake at $107. Hopefully they drop back to 90 and I will buy it back again - one more run from 90 to 107 and I will be green for the year.
No. It is not the boards job to put found cash in shareholders pockets today. It is the Boards job to bring the best long term value to the shareholders, and it is debatable if a large one-time dividend qualifies as best value when looked at over the long term.
There is no need for a one time dividend. That's the point. The money should be distributed progressively, as the profit is made. What the best value for shareholders is will vary from shareholder to shareholder, but it certainly won't arise through holding excessive amounts of cash. What is Apple doing with the money? Earning 2% on it? That is an awful ROI. Smart investors can make 10x that even in the current economic climate.