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Apple Surpasses Microsoft In Market Capitalization 557

Posted by samzenpus
from the big-bigger-and-biggest dept.
je ne sais quoi writes "Today Apple surpassed Microsoft in market capitalization, a metric of the perceived worth of a company. At around 2:30 pm EDT, the total number of Apple shares were worth $227 billion, whereas Microsoft's were worth $226 billion. Both companies' stocks ended the day in the red, and have dropped in value since the Greek crisis began, but Apple's share price has been falling less quickly. Of American companies, only Exxon-Mobil has a higher market cap at this point at $278 billion. According to the article: 'This changing of the guard caps one of the most stunning turnarounds in business history, as Apple had been given up for dead only a decade earlier. But the rapidly rising value attached to Apple by investors also heralds a cultural shift: Consumer tastes have overtaken the needs of business as the leading force shaping technology.'"
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Apple Surpasses Microsoft In Market Capitalization

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  • Growth (Score:5, Informative)

    by TheRaven64 (641858) on Wednesday May 26, 2010 @06:40PM (#32355204) Journal
    Microsoft hasn't really been growing for a decade, while Apple has. The market capitalisation often reflects this, because people are more willing to buy shares in a growing company, expecting that their value will increase over the next few years. People only buy shares in a stable company based on the expected dividends. This means that Apple's stock price is likely to be more volatile than Microsofts and, as long as the continue to be perceived as growing, greater than the current 'real' value of the company.
  • You come a long way (Score:2, Informative)

    by oldhack (1037484) on Wednesday May 26, 2010 @06:49PM (#32355298)
    Meet the guys, the Justice Department's anti-trust section.
  • Re:So close... (Score:3, Informative)

    by dangitman (862676) on Wednesday May 26, 2010 @06:57PM (#32355412)

    There, fixed that for you. The day of the PHB making decisions based on the novelty of the promo mugs and pens they just received is coming to an end. Thank god.

    That's pretty funny, and it seems like you actually believe it, too.

    Seems pretty accurate to me. Companies that operate that way might hang on for a bit longer, but their days are definitely numbered.

  • Re:Growth (Score:4, Informative)

    by pantherace (165052) on Wednesday May 26, 2010 @07:02PM (#32355456)

    Dell Computers, HP Computers, ipads, iphones, Gateways, all made by Foxconn and friends.

    Apple doesn't really make anything.

  • Re:Growth (Score:2, Informative)

    by TheRaven64 (641858) on Wednesday May 26, 2010 @07:13PM (#32355594) Journal

    The only thing Apple makes are designs. All of the manufacturing is outsourced. Microsoft also 'makes' the XBox, in the same way that Apple 'makes' the iPhone; by sending the designs to a company in China to mass produce them.

    For a counter example, look at ARM, a company that doesn't make anything. It now has a market cap of over $4bn, while the company that created it, which did make things (computers) went bust in 2000 and was never valued at much more than 20% of ARM's current value. At one point in the late '90s, the shares that Acorn held in ARM were actually worth more than the market capitalisation of Acorn.

  • Re:Growth (Score:4, Informative)

    by MBGMorden (803437) on Wednesday May 26, 2010 @07:19PM (#32355674)

    Xbox, Zune, Keyboard, Mice. Nah, Microsoft doesn't make anything real.

  • by amorsen (7485) <benny+slashdot@amorsen.dk> on Wednesday May 26, 2010 @07:24PM (#32355750)

    newly found controlling and assholish nature.

    Newly found? The "look and feel" lawsuit started in 1988, and led to FSF's Apple boycott.

    Back then they lost. Today they would have patented everything and won. Or possibly even won without patents; copyright on computer software is much broader than it was in the 80's.

  • by mschuyler (197441) on Wednesday May 26, 2010 @07:29PM (#32355788) Homepage Journal

    Mod parent up. Market capitalization is nothing more than perceived value by those who play the stock market gambling game. It's driven by a combination of factors, including the falling Euro, the Greek disaster, and the Gulf oil spill, all which have nothing to do with Apple. I suppose it gives Apple some bragging rights for awhile, but it doesn't have much to do with the real world. Microsoft isn't selling iPhones or marketing music. Apple isn't marketing Microsoft Office.

  • Re:Watch out (Score:5, Informative)

    by SEE (7681) on Wednesday May 26, 2010 @07:29PM (#32355792) Homepage

    It doesn't just "look like" the OS X desktop. Limbaugh is a long-time Mac user and evangelist.

  • by dingen (958134) on Wednesday May 26, 2010 @07:33PM (#32355834)
    The funny thing is that Apple has created their fortune without ever really having a large user share in any market. Therefore, anti-trust laws don't apply. Apple's profits are huge, but they're not monopolists.
  • by kdubb1 (930778) on Wednesday May 26, 2010 @07:42PM (#32355956)

    This over-valuation is quite common in tech stocks, people invest in companies whose products they like (terrible investment strategy BTW)

    I know what you mean... Warren Buffet preaches this method (buy and hold things you like and use). We see how well that has worked out for him.

  • by whisper_jeff (680366) on Wednesday May 26, 2010 @07:48PM (#32356018)
    http://www.apple.com/pr/library/2010/01/25results.html [apple.com]

    Um, Apple generates billions of dollars in profits each quarter as well. Sorry, what was your point?
  • by pz (113803) on Wednesday May 26, 2010 @07:57PM (#32356134) Journal

    Greek. Mod me troll, offtopic, whatever. Getting something like this wrong is a big deal. It is not a greek crisis, but a Greek crisis. It is a crisis of the national government of Greece. Moreover, since "greek" is rarely used as an adjective on Slashdot, it reads too easily as "geek" which is a common adjective here, so the submitter and editor would need to be extra careful to avoid confusion.

    Yet another instance where an editor worth their salt would perform their appointed duties and correct submitted text, but a Slashdot editor fails to do so.

  • Re:Growth (Score:5, Informative)

    by samkass (174571) on Wednesday May 26, 2010 @08:07PM (#32356250) Homepage Journal

    It's called cooking the books. It's not profit or anything like that, it's how that people *think* profit is going.

    Apple really is an insanely profitable company. Their margins are sky-high and the volume is high enough to get the top-tier of economies of scale. They pull in billions of dollars of actual cash profit per quarter. The P/E is about 20, which isn't astronomical (less than twice Microsoft's). This isn't some dot-com speculation-- Apple really is performing phenomenally well financially.

  • Re:Growth (Score:3, Informative)

    by John Meacham (1112) on Wednesday May 26, 2010 @08:20PM (#32356388) Homepage

    Um, no. When you own stock, you own a part of the company. As in, you own a part of a real company that is designing and building things and making money. That has intrinsic value independently of the dividends. To say stock that doesn't pay dividends doesn't have value is equivalent to saying this gold bar is worthless because it doesn't pay dividends. Both stock and the gold bar have value in the future because they represent actual wealth.

    Whether a company's profits go towards increasing the stock price or paying out dividends is not really relevant to the intrinsic value of owning a percentage of the company.

  • by QuantumLeaper (607189) on Wednesday May 26, 2010 @08:21PM (#32356398) Journal
    True, he is only 3rd richest behind Bill and Carlos.
  • by fullfactorial (1338749) on Wednesday May 26, 2010 @08:45PM (#32356690)

    Yes, because of course web/IM/email are the *ONLY THREE THINGS* done on any PC in an average home...

    You win the unintentionally hilarious award for the day. The iPad actually supports or will support every single thing you mentioned!

    1. Printing support [appleinsider.com] may come as a part of the iPhone OS 4.0 SDK. If not, Google's Cloud Print Service could fill the gap.
    2. The iPad is such a good 3D game platform that Nintendo declared Apple the enemy of the future [engadget.com].
    3. The iPad itself is a solid media player, but you can also hook it up to your TV with Component [apple.com] or VGA cables.
    4. Apple sells a Camera Connector Kit [ilounge.com] for the iPad. You can upload photos from an SD stick, and edit them in an App on your iPad.
    5. iPhone OS 4.0 supports background tasks and multi-tasking, to the extent that you would even want to do that on a 10" screen.

    The only thing you can't do on an iPad is rip movies and music, but that's kinda what the iTunes store is for. I'm not saying that the way you do it on the iPad is for everyone, and you specifically are certainly better off with a PC. My mom, on the other hand, finds the iPad a much eaiser way to achieve every item you mentioned.

  • Re:Growth (Score:5, Informative)

    by seanadams.com (463190) * on Wednesday May 26, 2010 @08:56PM (#32356830) Homepage
    You either have no idea how equities actually work or you are being deliberately obtuse. Do you think huge companies just instantly vanish in some random event that nobody can predict? No. All that cash in the bank? It belongs to the shareholders. Likewise all the other assets of the company. You can take profits selling your AAPL any time you like - right now it's close to its all-time-high.

    The reason fast growing companies don't pay dividends is because shareholders don't want them. The reasons they don't want them are:

    1) Dividends are taxed as ordinary income, which by the time you figure typical state taxes is about double the rate for long term cap gains.
    2) If the company has a use for the money (eg mergers, or even just stockpiling for future downturns) then it's better for the shareholders to keep the cash in the corporation than to be forced to raise money through borrowing, or dilution at times when the stock is weaker.
    3) Shareholders want to choose when they take their profits/income.

    The shareholders literally, legally, OWN the company. It is more than simply a game of betting which way the share price will move although many people look at it that way.

    When you look at an established company with good profitability but shaky prospects for future growth - case in point, MSFT, that is when shareholders will demand a dividend. If the stock isn't going up and the company can't find efective ways to reinvest its profits, then the shareholders will want a periodic return. AAPL shareholders are expecting more from the company right now and you'd have been a fool to bet against them at any time in the last 12 years or so. That's not saying it goes up forever but AAPL has so much cash and such a broad product portfolio that it's not the kind of thing that can go out of business without a seriously protracted unwinding.

    And your notion that it's only a matter of having a sufficiently long time frame is patently false. Never mind that this only can happen if the entirety of the company's assets are liquidated to satisfy its debts... what if they are acquired in whole? I suppose you would argue that the acquiring entity eventually will fail, etc ad infinitum. Well that's entropy for ya - heat death of the universe. So what? Should nobody invest then? Should successful growing companies all pay dividends instead of using that money to expand operations?

    Why don't you invest in such companies while the rest of us hold our AAPL. Sounds like you've got an angle!

  • Re:So close... (Score:1, Informative)

    by Anonymous Coward on Wednesday May 26, 2010 @08:59PM (#32356846)
    "Consumer tastes have overtaken the needs of business as the leading force shaping technology."

    Oh how I wish that were true. I, and all my friends, switched to Linux and libre software at home during the past few years. I frankly know almost nobody who is still using Microsoft at home. A few Macs, sure, but mostly Linux in our crowd (mostly young professionals).

    But none of our employers have switched - they're still using what we consider inferior Microsoft products. It's all "XP-this" and "Office 2007" that, with "Vista 7 is coming" and "Office 2010 is comng."

    The only justification for this which *might* possibly make sense is if our employers need certain admin controls not available in the libre stuff. But what's convenient for them makes our lives so more difficult. It is so depressing to go into work and sit at a Microsoft-based workstation and have to deal with its failures all day long.

  • by jamrock (863246) on Wednesday May 26, 2010 @09:19PM (#32357004)

    Even if Apple were to grow sales 100% a year for 5 years they still couldn't match Microsofts actual profits.

    Really? Let's see:

    Microsoft - Year ending December 31, 2009, Net Income $16.26 Billion on Revenues of $58.69 Billion

    Apple Inc. - Year ending December 31, 2009, Net Income $7.477 Billion on Revenues of $42.05 Billion

    According to you, if Apple grew sales 100% per year for 5 years, over that period they'd earn $16.26 billion in net income on revenues of more than $1.3 Trillion. Let's assume Apple's net income remains 17.78% of revenue. On sales of $1.303 Trillion, they'd show net income of $231 billion, not $16.26 billion as you assert.

    We're supposed to take any part of your post seriously? You're spouting bullshit in such an authoritative manner you'd be right at home behind the anchor desk of Fox News.

  • by jedidiah (1196) on Wednesday May 26, 2010 @09:21PM (#32357018) Homepage

    > Printing support may come as a part of the iPhone OS 4.0 SDK. If not, Google's Cloud Print Service could fill the gap.

    In the old days we called this vaporware.

    > The iPad is such a good 3D game platform that Nintendo declared Apple the enemy of the future.

    Way to completely misrepresent what they said.

    > The iPad itself is a solid media player, but you can also hook it up to your TV with Component or VGA cables.

    No it isn't. IT IS A JOKE. It can play a subset of one format and nothing else.

    That includes the video that your still camera can generate that you think you will
    get somewhere by using the "camera connection kit".

    Doing anything but multi-touch parlour trick apps with an iThing requires considerable "stretching".

    It's time to stop swimming in the cool-aid. The nonsense about printing (and the fanboy excuses)
    are especially sad since Apple even went out of it's way to BUY the Unix printing subsystem.

  • Re:So close... (Score:3, Informative)

    by theskipper (461997) on Wednesday May 26, 2010 @10:15PM (#32357444)

    Further, a dog licking his anus is akin to lobbyists courting Congressmen.

  • by neomorph (172439) on Wednesday May 26, 2010 @11:22PM (#32357884)

    Since 2003, qualified dividends are taxed at 15% (0% if you're in the 15% tax bracket). This will end at the end of this year.

  • by Some Bitch (645438) on Thursday May 27, 2010 @05:02AM (#32359654)

    On /. ???

    Compared to 4chan this place is a model of civilised behaviour.

  • by TheRaven64 (641858) on Thursday May 27, 2010 @05:34AM (#32359798) Journal
    Their profit margin is around 20%, which is insanely high for a hardware company. For comparison, Dell's profit margin is under 3%. Microsoft's may be around 30%, but Adobe's is over 10%, so Microsoft's margins are only a bit higher (factor of two or three) than is normal for a software company, while Apple's are around ten times those of the rest of their industry.
  • by Wingsy (761354) on Thursday May 27, 2010 @06:28AM (#32360100)
    "People seem to forget that Bill Gates saved Apple (made a substantial investment) or they *would* have gone bankrupt."

    Oh God, not THAT myth again. How can people seem to forget something that never happened???

    I wonder who first re-wrote that tidbit of history. It was certainly a re-write, because the fact of the matter is that Apple had well over a BILLION dollars in cash when MS bought 150 Million in non-voting shares. The essential part of that deal was that MS would continue supplying Microsoft Office, Internet Explorer, and development tools for the Macintosh, in exchange for Apple to drop its Look & Feel lawsuit against MS. MS was also hoping the deal would help keep the anti-trust headhunters at bay for a while. The money was just a little icing on the cake, and was certainly not needed to keep Apple going.

    The people who believe the opposite are the people who see anti-Apple headlines and see no more. They seem to be the same ones who choose to help propagate the myth.
  • by intheshelter (906917) on Thursday May 27, 2010 @09:06AM (#32361550)

    Microsoft most definitely did NOT save Apple. Another reply to you already pointed this out so I won't bother duplicating his/her details, but you are absolutely incorrect on this issue.

    " first time they fail the stock will tank. Remember the Newton?"
    - Incorrect again on many levels. First of all, the Newton was about 20 years ago and the landscape has changed drastically. Dragging this out again and again borders on ridiculous, especially considering your own example proves you wrong. Newton failed and Apple is not dead. Apple has also had what many consider failures in the last 5 years such as that apple boombox, AppleTV (not a big failure, but certainly has not been a standout product) and the stock has not tanked.

    "Microsoft on the other hand makes huge margins selling the same thing"
    - Yes, they do. The same thing. Never changing. Never innovating. 10 years and the stock has been stagnant. Tell me again how great MS is?

  • Re:So close... (Score:3, Informative)

    by yankeessuck (644423) on Thursday May 27, 2010 @10:28AM (#32362716)

    Let's look at facts instead of hyperbole.

    1. The iPod has been around for almost nine years and iPhone for three years. Hardly a hyped up fad that will disappear overnight. The Walkman lost its relevance when CDs came out. Perhaps there's a new disruptive music technology sometime in the future but we'd be hard pressed to name it right now.

    2. Microsoft's earnings are flat over three years while Apple's has more than doubled. That's not even including the iPad. Microsoft's growth will come from Windows 7, server and office products but that's mostly coming from corporate spending which is still down in the dumps. Xbox is basically a break even product line so it's not even worth mentioning in this conversation.

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