Oh didgit, You have hit the nail on the head, so to speak. I can't tell you how many times I've heard, 'we are losing losing money on every item we sell...only to hear, that's OK, we'll make it up on volume!' It's such a short sighted business model, as you say, a la GM!
The "losing money on every item" isn't the GM theory... it's the pets.com theory.
Having loss leaders to bring in sales on other stuff...there's another very large corporation that goes with that - Wal-Mart. It seems to work quite well for them.
it's not semantics. You can't interchange terms when largest is being applied to the market cap. Apple's market cap is larger therefore it must be, by definition, the most valuable. There is no ambiguity in the article about what "largest" refers to .
It IS semantics. Bloomberg knows to phrase things correctly:
... But my feeling about this has been that Google doesn't care. Google makes 95% of its income, both gross and net, from advertising. They aren't, despite what most people think, primarily a search company. That's not their business. They are an Ad placement company. Their search function is just there for the purpose of making money from Ads. The better the search, the more Ads they get.
Actually, they aren't primarily an advertising company either, they are primary an information collection and control company. Advertising is but one application of the information they collect on individuals. So, yes, they don't care if they make any money directly with Android, or gmail, or gdocs, or any other gservice. It's all about collecting more and more personal information, which, among other things, may be used for targeting ads. This is why they can dump these products on the market below production costs, undermining competitors, while at the same time increasing their information collection and control capabilities.
Of course, one advantage of their dominance in search is that it gives them tremendous ability to control and manipulate information access, which, again, they use to funnel money to their bottom line.
Quote:
Originally Posted by cgc0202
I consider the reluctance of Google to immerse into more active coordination of the Android project and its reluctance to invest in the infrastructure (not just the software) as a major stumbling in the development of the Android, as a more effective system, as much as the Apple integrated ecosystem it has built with the iPhone OS.
They may think that the fragmentation of Android actually serves them best. They don't actually care how good it is, or how good the user experience is. What they want is for Android to win, or do very well in, the checkbox wars, so that it looks like it outfeatures other phones and attracts users on that basis. However, since they want to create the appearance of a separation between themselves and the android ecosystem (this promotes the illusion of openness, among other things) they can't actually overtly control it like Apple does, and it would not suit their interests for any one handset maker to become the predominant supplier of Android handsets, as this could result in Google loosing some degree of control of Android.
So, what serves their interest best is to create this state of confusion and fragmentation in the Android universe by alternating latest features and releases among various handset makers, allowing no one to get the upper hand.
Your data is different from Google Finance. Do you really think that is Wolfram|Alpha is the best choice without backing it up or noticing that the latest trades data is recent but the other areas are based on older data? Or how about reading what AI and other tech and finance sites are measuring?
* Market Cap (currently) Apple just ahead of MS (fluctuates daily, but trend is certainly in Apple's favour)
* Market Cap is based on investor confidence & market coditions (and can chanfe rapidly and dramatically) - Apple has the tail wind of strong recent performance with great profit growth and continued storng product introductions. That said, it's also exposed (just as Microsoft is) to competitors - notably Google in Phones (where Google is gaining ground on Apple fast)
*In terms of Profit - Microsoftt is STILL more profitable than Apple, both in Margin ($ on sales after costs) and in terms of total profit (having a higher Market Cap doe not equal higher profitability)
* R&D investmenr - Microsoft is still the lager (that's not as visable to most consumers bacuase much of Microsofts business is in Enterprise & servier technology that is not 'headline' consumer press material.
In terms of breadth of Customer base & range of products, Microsoft has a clear lead, Apple is highly sucessful in a few core markets (iPhone being it's number 1 now), but remains exposed by only haveing a few business lines & key products (one of the reasons they are so profitable as a HW company).
in short - for those of use with more interest in the reality of the technology industry (rather than name calling) it's a very interesting time, where Apple, Microsoft and Google are locked in many major battles for different markets - some for share at no revenue (Google = free software and services as long as you click their advertising), some for premium margins driven by high prices on few products (Apple), and others (Microsoft) via broad market share, using lower pricing, and licencing software to a many different markets (business, consumer, etc).
R&D investment, as a number, is probably the most meaningless stat that's been mentioned in this discussion. It's easy to throw away tons of money on "R&D", so, as a number, is it contributing anything to the future bottom line, or simply draining from the present? There's no way to tell from the number alone.
AI's mention of PE ratios is really quite pointless (BTW a higher PE sort of indicates 'over-valued'), why? Amazon's PE is 55!
A stock with a high P/E ratio may or may not be overvalued. Investors accept higher ratios if they think that the earnings will (continue to) grow quickly .
The value of a stock can be calculated many ways, but one way is to compare price not to static earnings, but rather, to earnings growth. This is called the PEG Ratio, and some folks think it is a better than a static P/E as an indication of whether a stock is cheap or expensive.
Market capitalization is just funny money. It's what the public THINKS a company's stock is worth. I prefer REAL money, and MS has more. MS beats Apple hands down in terms of what's in the bank, or what could be in the bank.
As long as other people are free to innovate no monopoly is safe. The government should remember this next time they embark on their next antitrust case.
Monopolies often erect barriers to entry into a market to preserve their status. This reduces other people's freedom to innovate. It is a major factor in antitrust analysis.
One article on this I read said that the last time AAPL had a higher market value than MSFT was in 1989, so really it's more like 20 years. This sounds about right, considering that in the late '80s Apple wasn't doing tremendously well and Microsoft was entering into their fastest growth phase.
So where are we? Only the iPhone and Android based phones are showing smartphone growth.
Conclusions cannot be more reliable than the data they are based upon.
May 19 (Bloomberg) -- Smartphone manufacturers? sales rose the most in four years during the first quarter as Research in Motion Ltd., Apple Inc. and makers of Android-equipped phones extended gains, market-research company Gartner Inc. said.
This article is about valuation, not about any of the other areas you mention, which are all out of date, by the way. Each one of those areas will be a milestone achievement, just like with the company that will eventually overtake Apple. You can hate on Apple all you want and ignore the facts of the article, but at the end of the day Apple is most valuable tech company in the world and is (based on current trends) likely to be the most valuable company in the world in short order.
PS: I have no idea why these asshats are so offended that Apple has achieved a goal and broke a record. We're they also on tech blogs saying how Google's victory was nothing when they bested Apple's valuation? I'd like to round these people up and make them learn the basics of economics and logic.
One area where Apple badly lags Microsoft (and IBM and probably more than a few other tech companies) is investment in basic research. For many years it probably made sense to run lean in order to insure that Apple had a future. But tech companies like Bell Labs and IBM made Nobel prize level contributions to society. Now that Apple has performed so well I hope they do more than just product development. When Jobs was recruiting Sculley he asked him if he wanted to spend the rest of his life selling sugar water to kids (he was a rising executive at Pepsi). I guess the question now might be if Apple's ambitions are beyond selling media devices to kids.
Oh, yes. And we can see how much money those Nobel prizes have earned.
It is rare that a Nobel prize discovery turns into revenues in a reasonable investment timeline. I'd rather have Apple focus on creating super consumer products than researching the color of the up quark.
Quote:
Originally Posted by tipoo
Market capitalization is just funny money. It's what the public THINKS a company's stock is worth. I prefer REAL money, and MS has more. MS beats Apple hands down in terms of what's in the bank, or what could be in the bank.
Apple, Inc.
Revenue - $42.91 billion
Operating income - $11.74 billion
Total assets - $47.50 billion
Total equity - $31.64 billion
Microsoft
Revenue - $58.437 billion
Operating income - $20.363 billion
Total assets - $77.888 billion
Total equity - $39.558 billion
Stop sensationalizing.
Fortunately, most of the investing public is smarter than you.
Would you rather have $39 billion of equity that's growing at 3% per year or $32 billion of equity growing at 25% per year? Basing your company valuation solely on assets on hand is a huge mistake.
Quote:
Originally Posted by cgc0202
I would not be surprised if China would eventually overtake the US, economically. They may rely on Western technology right now, but like Japan, they will evolve their own local technology. It is not simply cheap and plentiful labor that attract many Western companies to China.
So THAT explains why Japan passed us in the 80's. Oh, wait.
You're mistaken about why Western companies go to China for manufacturing. It IS the cost of labor - nearly entirely. Every company that I know of that that is doing business in China is doing it solely on the basis of labor costs.
There are companies trying to sell in China, but that is almost entirely on the basis of the huge population.
I can't think of a single company that is doing business in China to gain access to their 'superior' technology.
Quote:
Originally Posted by Smurfman
I STILL can't find an iPad 3G anywhere! Anyone know where I could get one online for the regular price?? It's selling on Amazon for $200-300 more than retail!
That would be tough. You can do this when you buy one program, as Apple did with Logic, but to do it with every program in the catalog would simply engender too much bad will. It would also destroy the value of the purchase of Adobe. It would result in a drop of Apple's market value. Overall, not a great idea.
It would not destroy value of the purchase. Key Adobe products have no alternative on the market, so pro Windows users of Adobe products would have to migrate to Mac. Now they would have to buy both Apple hardware and Apple software. The loss of Windows soft revenue would be compensated by gain in Apple soft/hardware revenue. Ownership of Flash and PDF technologies would also make Apple even bigger player.
Imagine, instead of this scenario Google buys Adobe. Imagine, Google now owns Flash and PDF, then Google ports complete Adobe Creative suite to its Chrome OS, making it secondary for other platforms, gradually decreasing support.
* R&D investmenr - Microsoft is still the lager (that's not as visable to most consumers bacuase much of Microsofts business is in Enterprise & servier technology that is not 'headline' consumer press material.
That's right. Microsoft sells plastic disks which cost pennies to burn. Lately even there are no disks at all - just download. MS basically sells air.
Apple on the other hand sells hardware. It's labor intensive, it requires high quality components, inventory, transpiration. Even if Apple sells millions of iPads and iPhones, it would probably impossible for them to match Microsoft profit margins.
BTW acquisition of Adobe who also sells air would actually diversify Apple business in addition to other strategic benefits.
It would not destroy value of the purchase. Key Adobe products have no alternative on the market, so pro Windows users of Adobe products would have to migrate to Mac. Now they would have to buy both Apple hardware and Apple software. The loss of Windows soft revenue would be compensated by gain in Apple soft/hardware revenue. Ownership of Flash and PDF technologies would also make Apple even bigger player.
Imagine, instead of this scenario Google buys Adobe. Imagine, Google now owns Flash and PDF, then Google ports complete Adobe Creative suite to its Chrome OS, making it secondary for other platforms, gradually decreasing support.
Which scenario do you like more?
PDF is an ISO standard. Apple doesn't need to pay Adobe to use it, let alone own them -- and neither does anyone else.
Comments
Oh didgit, You have hit the nail on the head, so to speak. I can't tell you how many times I've heard, 'we are losing losing money on every item we sell...only to hear, that's OK, we'll make it up on volume!' It's such a short sighted business model, as you say, a la GM!
The "losing money on every item" isn't the GM theory... it's the pets.com theory.
Having loss leaders to bring in sales on other stuff...there's another very large corporation that goes with that - Wal-Mart. It seems to work quite well for them.
it's not semantics. You can't interchange terms when largest is being applied to the market cap. Apple's market cap is larger therefore it must be, by definition, the most valuable. There is no ambiguity in the article about what "largest" refers to .
It IS semantics. Bloomberg knows to phrase things correctly:
http://www.bloomberg.com/apps/news?p...pWQ&refer=home
Note where they say in the headline "most valuable" They don't say "world's biggest."
Or better yet this: http://www.forbes.com/lists/2009/18/...2000_Rank.html
Berkshire Hathaway has a market value of $122 billion.
Toyota has a market value of $102 billion.
Toyota has higher income, higher profits and higher assets.
Would you SERIOUSLY argue that Berkshire Hathaway is a LARGER company in your headline? Seriously?
... But my feeling about this has been that Google doesn't care. Google makes 95% of its income, both gross and net, from advertising. They aren't, despite what most people think, primarily a search company. That's not their business. They are an Ad placement company. Their search function is just there for the purpose of making money from Ads. The better the search, the more Ads they get.
Actually, they aren't primarily an advertising company either, they are primary an information collection and control company. Advertising is but one application of the information they collect on individuals. So, yes, they don't care if they make any money directly with Android, or gmail, or gdocs, or any other gservice. It's all about collecting more and more personal information, which, among other things, may be used for targeting ads. This is why they can dump these products on the market below production costs, undermining competitors, while at the same time increasing their information collection and control capabilities.
Of course, one advantage of their dominance in search is that it gives them tremendous ability to control and manipulate information access, which, again, they use to funnel money to their bottom line.
I consider the reluctance of Google to immerse into more active coordination of the Android project and its reluctance to invest in the infrastructure (not just the software) as a major stumbling in the development of the Android, as a more effective system, as much as the Apple integrated ecosystem it has built with the iPhone OS.
They may think that the fragmentation of Android actually serves them best. They don't actually care how good it is, or how good the user experience is. What they want is for Android to win, or do very well in, the checkbox wars, so that it looks like it outfeatures other phones and attracts users on that basis. However, since they want to create the appearance of a separation between themselves and the android ecosystem (this promotes the illusion of openness, among other things) they can't actually overtly control it like Apple does, and it would not suit their interests for any one handset maker to become the predominant supplier of Android handsets, as this could result in Google loosing some degree of control of Android.
So, what serves their interest best is to create this state of confusion and fragmentation in the Android universe by alternating latest features and releases among various handset makers, allowing no one to get the upper hand.
Your data is different from Google Finance. Do you really think that is Wolfram|Alpha is the best choice without backing it up or noticing that the latest trades data is recent but the other areas are based on older data? Or how about reading what AI and other tech and finance sites are measuring?
* Market Cap (currently) Apple just ahead of MS (fluctuates daily, but trend is certainly in Apple's favour)
* Market Cap is based on investor confidence & market coditions (and can chanfe rapidly and dramatically) - Apple has the tail wind of strong recent performance with great profit growth and continued storng product introductions. That said, it's also exposed (just as Microsoft is) to competitors - notably Google in Phones (where Google is gaining ground on Apple fast)
*In terms of Profit - Microsoftt is STILL more profitable than Apple, both in Margin ($ on sales after costs) and in terms of total profit (having a higher Market Cap doe not equal higher profitability)
* R&D investmenr - Microsoft is still the lager (that's not as visable to most consumers bacuase much of Microsofts business is in Enterprise & servier technology that is not 'headline' consumer press material.
In terms of breadth of Customer base & range of products, Microsoft has a clear lead, Apple is highly sucessful in a few core markets (iPhone being it's number 1 now), but remains exposed by only haveing a few business lines & key products (one of the reasons they are so profitable as a HW company).
in short - for those of use with more interest in the reality of the technology industry (rather than name calling) it's a very interesting time, where Apple, Microsoft and Google are locked in many major battles for different markets - some for share at no revenue (Google = free software and services as long as you click their advertising), some for premium margins driven by high prices on few products (Apple), and others (Microsoft) via broad market share, using lower pricing, and licencing software to a many different markets (business, consumer, etc).
R&D investmenr - Microsoft is still the lager
R&D investment, as a number, is probably the most meaningless stat that's been mentioned in this discussion. It's easy to throw away tons of money on "R&D", so, as a number, is it contributing anything to the future bottom line, or simply draining from the present? There's no way to tell from the number alone.
AI's mention of PE ratios is really quite pointless (BTW a higher PE sort of indicates 'over-valued'), why? Amazon's PE is 55!
A stock with a high P/E ratio may or may not be overvalued. Investors accept higher ratios if they think that the earnings will (continue to) grow quickly .
The value of a stock can be calculated many ways, but one way is to compare price not to static earnings, but rather, to earnings growth. This is called the PEG Ratio, and some folks think it is a better than a static P/E as an indication of whether a stock is cheap or expensive.
This happened faster than I expected,
Didn't it take the better part of 30 years?
Apple, Inc.
Revenue - $42.91 billion
Operating income - $11.74 billion
Total assets - $47.50 billion
Total equity - $31.64 billion
Microsoft
Revenue - $58.437 billion
Operating income - $20.363 billion
Total assets - $77.888 billion
Total equity - $39.558 billion
Stop sensationalizing.
As long as other people are free to innovate no monopoly is safe. The government should remember this next time they embark on their next antitrust case.
Monopolies often erect barriers to entry into a market to preserve their status. This reduces other people's freedom to innovate. It is a major factor in antitrust analysis.
Didn't it take the better part of 30 years?
One article on this I read said that the last time AAPL had a higher market value than MSFT was in 1989, so really it's more like 20 years. This sounds about right, considering that in the late '80s Apple wasn't doing tremendously well and Microsoft was entering into their fastest growth phase.
So where are we? Only the iPhone and Android based phones are showing smartphone growth.
Conclusions cannot be more reliable than the data they are based upon.
May 19 (Bloomberg) -- Smartphone manufacturers? sales rose the most in four years during the first quarter as Research in Motion Ltd., Apple Inc. and makers of Android-equipped phones extended gains, market-research company Gartner Inc. said.
http://www.businessweek.com/news/201...-update1-.html
And with MS on the ropes,
Reality check: Microsoft is nowhere near being "on the ropes".
Reality check: Microsoft is nowhere near being "on the ropes".
Maybe not, but they are within the vicinity of the canvas...
Apple, Inc.
Revenue - $42.91 billion
Operating income - $11.74 billion
Total assets - $47.50 billion
Total equity - $31.64 billion
Microsoft
Revenue - $58.437 billion
Operating income - $20.363 billion
Total assets - $77.888 billion
Total equity - $39.558 billion
Stop sensationalizing. Still a huge gap.
and again:
Apple, Inc.
Revenue - $42.91 billion
Operating income - $11.74 billion
Total assets - $47.50 billion
Total equity - $31.64 billion
Microsoft
Revenue - $58.437 billion
Operating income - $20.363 billion
Total assets - $77.888 billion
Total equity - $39.558 billion
Stop sensationalizing. Still a huge gap.
This article is about valuation, not about any of the other areas you mention, which are all out of date, by the way. Each one of those areas will be a milestone achievement, just like with the company that will eventually overtake Apple. You can hate on Apple all you want and ignore the facts of the article, but at the end of the day Apple is most valuable tech company in the world and is (based on current trends) likely to be the most valuable company in the world in short order.
PS: I have no idea why these asshats are so offended that Apple has achieved a goal and broke a record. We're they also on tech blogs saying how Google's victory was nothing when they bested Apple's valuation? I'd like to round these people up and make them learn the basics of economics and logic.
One area where Apple badly lags Microsoft (and IBM and probably more than a few other tech companies) is investment in basic research. For many years it probably made sense to run lean in order to insure that Apple had a future. But tech companies like Bell Labs and IBM made Nobel prize level contributions to society. Now that Apple has performed so well I hope they do more than just product development. When Jobs was recruiting Sculley he asked him if he wanted to spend the rest of his life selling sugar water to kids (he was a rising executive at Pepsi). I guess the question now might be if Apple's ambitions are beyond selling media devices to kids.
Oh, yes. And we can see how much money those Nobel prizes have earned.
It is rare that a Nobel prize discovery turns into revenues in a reasonable investment timeline. I'd rather have Apple focus on creating super consumer products than researching the color of the up quark.
Market capitalization is just funny money. It's what the public THINKS a company's stock is worth. I prefer REAL money, and MS has more. MS beats Apple hands down in terms of what's in the bank, or what could be in the bank.
Apple, Inc.
Revenue - $42.91 billion
Operating income - $11.74 billion
Total assets - $47.50 billion
Total equity - $31.64 billion
Microsoft
Revenue - $58.437 billion
Operating income - $20.363 billion
Total assets - $77.888 billion
Total equity - $39.558 billion
Stop sensationalizing.
Fortunately, most of the investing public is smarter than you.
Would you rather have $39 billion of equity that's growing at 3% per year or $32 billion of equity growing at 25% per year? Basing your company valuation solely on assets on hand is a huge mistake.
I would not be surprised if China would eventually overtake the US, economically. They may rely on Western technology right now, but like Japan, they will evolve their own local technology. It is not simply cheap and plentiful labor that attract many Western companies to China.
So THAT explains why Japan passed us in the 80's. Oh, wait.
You're mistaken about why Western companies go to China for manufacturing. It IS the cost of labor - nearly entirely. Every company that I know of that that is doing business in China is doing it solely on the basis of labor costs.
There are companies trying to sell in China, but that is almost entirely on the basis of the huge population.
I can't think of a single company that is doing business in China to gain access to their 'superior' technology.
I STILL can't find an iPad 3G anywhere! Anyone know where I could get one online for the regular price?? It's selling on Amazon for $200-300 more than retail!
www.apple.com. Click on the tab labeled 'store'.
That would be tough. You can do this when you buy one program, as Apple did with Logic, but to do it with every program in the catalog would simply engender too much bad will. It would also destroy the value of the purchase of Adobe. It would result in a drop of Apple's market value. Overall, not a great idea.
It would not destroy value of the purchase. Key Adobe products have no alternative on the market, so pro Windows users of Adobe products would have to migrate to Mac. Now they would have to buy both Apple hardware and Apple software. The loss of Windows soft revenue would be compensated by gain in Apple soft/hardware revenue. Ownership of Flash and PDF technologies would also make Apple even bigger player.
Imagine, instead of this scenario Google buys Adobe. Imagine, Google now owns Flash and PDF, then Google ports complete Adobe Creative suite to its Chrome OS, making it secondary for other platforms, gradually decreasing support.
Which scenario do you like more?
* R&D investmenr - Microsoft is still the lager (that's not as visable to most consumers bacuase much of Microsofts business is in Enterprise & servier technology that is not 'headline' consumer press material.
That's right. Microsoft sells plastic disks which cost pennies to burn. Lately even there are no disks at all - just download. MS basically sells air.
Apple on the other hand sells hardware. It's labor intensive, it requires high quality components, inventory, transpiration. Even if Apple sells millions of iPads and iPhones, it would probably impossible for them to match Microsoft profit margins.
BTW acquisition of Adobe who also sells air would actually diversify Apple business in addition to other strategic benefits.
It would not destroy value of the purchase. Key Adobe products have no alternative on the market, so pro Windows users of Adobe products would have to migrate to Mac. Now they would have to buy both Apple hardware and Apple software. The loss of Windows soft revenue would be compensated by gain in Apple soft/hardware revenue. Ownership of Flash and PDF technologies would also make Apple even bigger player.
Imagine, instead of this scenario Google buys Adobe. Imagine, Google now owns Flash and PDF, then Google ports complete Adobe Creative suite to its Chrome OS, making it secondary for other platforms, gradually decreasing support.
Which scenario do you like more?
PDF is an ISO standard. Apple doesn't need to pay Adobe to use it, let alone own them -- and neither does anyone else.