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The Almighty Buck Apple

Apple Passes $300B Market Cap, 2nd In the World 485

Posted by Soulskill
from the let's-call-it-the-ibubble dept.
An anonymous reader writes "In May, Apple surpassed Microsoft in market capitalization to become the second largest company (by that measure) in the world. Today, with its shares riding high, Apple passed $300 billion in market cap, entering a club of two along with the still-gigantic ExxonMobile. And investors' targets could bring Apple beyond where Exxon is now (though Exxon continues to soar as well). Perhaps Wall Street is catching on that, despite the discontinuation of their underused Xserve, Apple is in fact becoming one of the key tech providers to enterprise, a position that even a year ago seemed laughable. If you consider the iPad to be a PC (which enterprise increasingly is), then suddenly you realize that Apple is expected to climb to 12% market share in 2011. Plus, of course, they have those little things called iPods, and iTunes..."
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Apple Passes $300B Market Cap, 2nd In the World

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  • by _merlin (160982) on Tuesday January 04, 2011 @01:18AM (#34751088) Homepage Journal

    Buying stock in a company that doesn't pay dividends is just gambling - you're buying in the hope that you can find a chump who'll pay more to buy it off you at some point in the future. You can only make money by selling the stock. Apple isn't unique in this regard: most major tech companies and oil drilling companies don't pay dividends. But to me it just looks like a house of cards. You're just gambling on investor confidence in a company.

  • by Dr. Evil (3501) on Tuesday January 04, 2011 @01:36AM (#34751206)

    Or... Steve will get sick, leave the helm and the stock will tank.

  • by seanadams.com (463190) on Tuesday January 04, 2011 @01:39AM (#34751218) Homepage
    Why does someone have to be a "chump" to pay more for it? If the company's earnings have grown 10x then the company ought to be worth about 10x. Those earnings... do you realize they belong to the shareholders even if they just accumulate in the company's bank account? Dividends are a "feel good" disbursement for companies that aren't supposed to grow. If you want to invest in dividend paying companies go for it. Or you could buy apple and any time your holding is worth more than your basis, just sell some. You'd have done quite nicely even with that conservative approach, and yet still enjoy the feel of 0% capital appreciation that you crave.
  • by EdIII (1114411) on Tuesday January 04, 2011 @01:46AM (#34751264)

    Apple will never replace Microsoft in the workplace, because they don't want to, there's not nearly as much money in it as replacing Microsoft in the home.

    Yeah.. but from the summary:

    Perhaps Wall Street is catching on that, despite the discontinuation of their underused Xserve, Apple is in fact becoming one of the key tech providers to enterprise, a position that even a year ago seemed laughable.

    That made me actually read the article and it does not really indicate that Apple has anything earth shattering for enterprise at all. I have not really heard anything either, hence the quietly I guess. All it talks about is how enterprise is "figuring out" how to integrate the iPad. I hardly see that as providing key technology to enterprise which is exactly what the summary and article claims.

  • by bloodhawk (813939) on Tuesday January 04, 2011 @01:49AM (#34751276)
    FYI, Android has already surpassed the iphones market share and windows phone 7 success or failure remains to be seen. Either way Iphone is currently on the decline. At it's current price Apple has a lot of ways it could go and many of them are in a downward direction.
  • by Anonymous Coward on Tuesday January 04, 2011 @01:50AM (#34751286)

    Buying stock in a company that doesn't pay dividends is just gambling - you're buying in the hope that you can find a chump who'll pay more to buy it off you at some point in the future. You can only make money by selling the stock. Apple isn't unique in this regard: most major tech companies and oil drilling companies don't pay dividends. But to me it just looks like a house of cards. You're just gambling on investor confidence in a company.

    Why are these ignorant comments consistently modded +5 insightful? Did they stop teaching economics in High School?

    http://en.wikipedia.org/wiki/Stock_valuation

  • Re:Market cap? (Score:3, Insightful)

    by HungryHobo (1314109) on Tuesday January 04, 2011 @01:52AM (#34751294)

    I've always been a bit puzzled by why the owners of a company are so utterly sheltered from damage cause by or crimes committed by that company.
    It gets waved away with claims like "well of course then people might not want to invest in those companies" which while true would also be the point.
    If to protect themselves people demanded reasonable proof that a company was behaving ethically and within the law before investing in it then we might see companies breaking the law less and behaving more ethically.

    If I own an old building which collapses and hurts a bunch of people because I'm too greedy to invest money in repairs, I'm liable.
    If I own a dog and it bites someone because I'm too greedy to invest in a fence or muzzle, I'm liable.
    If I own a corp and it kills a load of people because in order to keep me an an investor because I'm too greedy to accept a 0.1% lower dividend rate it didn't put money into the safety systems.... I'm off scott free.

  • by MattskEE (925706) on Tuesday January 04, 2011 @01:52AM (#34751302)

    smartphone market (complete ownership with Android and WP7 fighting for the left over scraps)

    At least in 2009 (I haven't looked up 2010)
    The Blackberry phones outsold iPhones (revenue and units sold) [gigaom.com] and as usual, Nokia dwarfs them all (in market share) [gigaom.com].

    Granted Apple has done quite well in the MP3 player market, and with its excellent profit margin it is certainly an extremely successful company. But let's compare Apple (market cap $296 billion) to Exxon Mobil (market cap $377 billion).

    Exxon Mobil's 2010 profits of $19 Billion on $285 Billion in revenue [cnn.com] completely dwarf Apple's 2010 profit of $6 billion on $36 billion in revenue [cnn.com]. Granted Apple has a higher profit margin than Exxon Mobil, but in 2009 [cnn.com] Exxon Mobil's profits were greater than Apple's revenue.

    Both companies are certainly successful, but I suspect Apple's stock price has more to do with its image than its value.

  • by AuMatar (183847) on Tuesday January 04, 2011 @02:06AM (#34751358)

    Actually, it is totally arbitrary. The market cap is the number of shares times share price. The share price is whatever you can get someone to buy it for. It theoretically moves based on company performance, but there's no rules requiring it to. And it moves on rumor as much as on information. Hell, you have people at CNBC, the home of the wall street cheerleaders association speculating if the market will move based on how new york teams do in the playoffs. Yeah, sounds like it's really based on performance.

    If you buy a stock for anything other than its dividend, you're investing in the world's biggest ponzi scheme. You may be willing to pay a premium if you think the company can grow it's dividend, but the only thing worth investing for is the yield and it's ability to maintain that yield.

  • by ravenspear (756059) on Tuesday January 04, 2011 @02:10AM (#34751384)

    Actually, it is totally arbitrary.

    When you are talking about the 2nd largest company in the world, no it isn't.

    Sure there are some stocks that have a high price just based on hype and not much else (the tech bubble taught us that).

    But you do not get to a $300B stock without real metrics showing real growth and success. Apple has that. No other stock in Apple's class is pure hype.

  • Enterprise? (Score:2, Insightful)

    by aslag (1884052) on Tuesday January 04, 2011 @02:15AM (#34751416)

    If there's one thing Apple is not, it's enterprise. iPods, iPads, iPhones and even mac OS are all consumer-grade products designed with the aim to fuse gucci-like sex appeal with simple usability. Where does security, stability, and manageability fit into this? Selling style, luxury, and limited functionality (for the sake of ease of use) has always been Apple's niche and it's worlds away from enterprise-grade software and hardware.

    Consider HP SANs or the Solaris operating system: these are highly-manageable, dependable, secure enterprise products. They make up infrastructure that must be relied-upon. The companies who make them provide expert support to ensure proper setup and continuous service. They are complex and well-engineered. These are not qualities of Apple products.

    Of utmost importance for enterprise users is security. It seems that Apple often botches this. Consider just the security problems with iPhones that have been discovered in the last year. We learned that iPhone email security is farcical and that their on-disk encryption doesn't really work (c.f. http://marienfeldt.wordpress.com/2010/03/22/iphone-business-security-framework/ [wordpress.com]). We also saw remote execution flaws (http://securitytracker.com/alerts/2010/Sep/1024413.html), and Apple's mishandling of iPhone PKI (http://cryptopath.wordpress.com/2010/01/).

    And security isn't the only feature of enterprise hardware and software that is divested by Apple. Apple's software often lacks any remote management software, let alone robust tools for this. Dependability, too, is often not a feature of their products.

    To claim that Apple's products can serve the enterprise customer seems ludicrous. I would hope that, over time, the features of well-engineered enterprise products find their way into consumer-level products; deploying Apple products in the enterprise seems to transplant the flaws, shortcomings, and hassle of consumer products into the enterprise. Who desires this?

  • by the_humeister (922869) on Tuesday January 04, 2011 @02:16AM (#34751424)

    Except Apple is more exposed to the whims of fashion and personal choice. Berkshire Hathaway, on the other hand, is a huge conglomerate/holding company. They can survive the loss of the head guy. With Apple, I'm not so sure about that.

  • by hedwards (940851) on Tuesday January 04, 2011 @02:37AM (#34751506)
    21.75 isn't low. The tech industry typically has unreasonably high valuations due to the tendency of the industry to capture the imagination of know nothing investors.

    Right now, MSFT is trading at an 11.86 P/E ration and Google at a 24.21, but MSFT despite all the ill will I personally have against them, has done a better job over time maintaining its income and I don't expect that to change any time soon.

    You'd have to be an idiot to think that APPL is genuinely worth about double what MSFT is.
  • Old News (Score:4, Insightful)

    by SuperKendall (25149) on Tuesday January 04, 2011 @02:55AM (#34751602)

    Where does security, stability, and manageability fit into this?

    The thing is, those were never really that distinct from consumer needs. We have all seen what happened when the "enterprise grade" Windows was used by the world. It's pretty obvious the enterprise for all the bluster doesn't ACTUALLY require the level of security you call for, as much as they might wish for it.

    Of utmost importance for enterprise users is security. It seems that Apple often botches this. Consider just the security problems with iPhones that have been discovered in the last year. We learned that iPhone email security is farcical and that their on-disk encryption doesn't really work

    If you read to the bottom of your own link, FDE works in iSO4.x. The device is properly encrypted, and can be remote wiped as needed.

    It's as good as any other device out there; better than most and I would argue better by far than Blackberry since company data doesn't have to go through a RIM server.

    Dependability, too, is often not a feature of their products

    Oh right, that's why the Apple consumer product ratings are so high. Because they are so "unreliable". Well sir then please explain how so many companies stick with POS Dell boxes that fail if you sneeze and sometimes if you don't. I know, I had to deal with them for years on end.

    Your whole post is just so much trolling a view of Apple from way back in 2005 or so. It ignores the very real use of iPads across the enterprise, the substantial management features and Microsoft integration in place today. In short, it totally ignores the reality of modern IT departments and the needs of business units in real companies.

  • by SuperKendall (25149) on Tuesday January 04, 2011 @03:02AM (#34751616)

    If you mull it over, you'll realize that consumers actually require a HIGHER level of security than do enterprises. Enterprises can afford to be a little lax because they have full-time people dealing with security issues that arise, and maintain boxes.

    Consumers have noen of that; they have only themselves. Would not the blood of any corporate IT manage run cold at the thought of a system that had to be maintained by a user, for years on end? But that is exactly what happens with hundreds of millions of consumers. Computing devices aimed at them must be FAR more solid and robust than any product targeting an enterprise, if they are to work well for any length of time.

    Furthermore employees are a lot easier on equipment than a home user, a home user moves stuff around and takes it with them. Office equipment generally vegetates in one location, and is handled with more care.

    And that is why the enterprise is starting to adopt Apple gear, because Apple has had to build software and hardware secure and robust enough for real world use, not coddled managed enterprise land. In the end business people want solutions to work and it simply cannot be overlooked anymore that Apple gear is providing real solutions that work for everyone.

  • by dtjohnson (102237) on Tuesday January 04, 2011 @03:17AM (#34751676)

    A friend asked me to help get their new Christmas MacBook Pro to print photos with a 8-yr-old Canon printer. First, I go to the Canon website looking for drivers. Canon doesn't have them for download for that model anymore, though, not even for Windows. Googling finds the 'download-driver' websites offering drivers...but they are for older OS versions and won't download without the obligatory 'signing up' etc. Frustrated, I plug the printer usb cable into the macbook and expect to see a pop-up screen about finding new hardware and where should it look for a new driver but...nothing. Click through to 'printers' and...it says the printer is not only recognized but ready to print. Yeah, sure. Click on the iPhoto app and select 4x6 borderless print and...in a few seconds out pops a beautiful print. I'd been so conditioned by the Windows way of doing things that I expected it not to work with OS X 10.5. What does this have to do with the TFA? Only that Apple has got it going on right now. Someone else might beat them but it won't be because Apple wasn't offering good products...the someone else will have to be offering much better products and that is going to be very, very difficult to do.

  • by jo_ham (604554) <joham999@@@gmail...com> on Tuesday January 04, 2011 @04:55AM (#34752020)

    Apple decided a long time ago when OS X was released) that they wanted to remove the "driver headache" as much as possible - so they ship a massive bunch of printer drivers with OS X, including drivers for ancient stuff (you can even use old LaserWriters), and if they don;t have a driver for it, there's a strong chance they can get it going under CUPS, which also ships ready to run. This does mean that you have 250-300MB of drivers sitting in /Library/Printers, but HD space is cheap, and you can delete them if you want to slim down your install (you can also choose to trim the list during install time if you do a fresh installation).

    It's one of the many things I like about OS X. I can plug in a USB drive and have it mount right away, ready to use. Plug the same drive into a Windows box and it has to install something. It only takes a few seconds, but I'm unsure what it's doing - surely it's just a USB mass storage device? Plug in my other memory stick, from a different vendor, and it has to install something else!

    Lots of little touches like this all across the OS make it nice to use. I have used Win 7, XP and Vista (ugh to Vista) and they work well enough - there's nothing wrong with them per se, when they're working fine, but I prefer OS X.

  • by kestasjk (933987) * on Tuesday January 04, 2011 @06:42AM (#34752314) Homepage

    If Apple one day decides to take that it now has the resources, it can and it will and the Microsoft of today stands no chance of stopping it.

    What about Office, Visual Studio, the .NET Framework (LINQ, WPF, WCF, ADO.NET, etc, etc, all designed for business), legacy applications and documents, Active Directory, the ability to run it on hardware by the lowest bidder, etc,

  • by pla (258480) on Tuesday January 04, 2011 @07:32AM (#34752438) Journal
    And that is why the enterprise is starting to adopt Apple gear

    Cite, please (from a non-Apple press release)? Because I call this complete and utter fiction.

    Make no mistake, Apple has a "presence" in enterprise because a lot of people have iPhones (banned from connecting to the corporate email system unless you have the words "executive", "chief", or "vice" in your title), and iPods (banned from running iTunes or storing any form of media library on corporate PCs), and these people use them in and around (but unconnected with) their jobs.

    But actual use by enterprise, I just don't see it. Apple occupies the same niche today in the corporate world as it has for the past 20 years - Sometimes the marketing folks will get a pass to use Macs at their job, which may or may not save them time, but at the cost of wasting IT's time when they need help converting to "real world" formats to send out-of-house three times a day.
  • by Anonymous Coward on Tuesday January 04, 2011 @07:37AM (#34752456)

    The iPad isn't a toy? And no, not because it's simple, but because it isn't meant for productivity.

    And no, Apple isn't "the largest public company in the world", unless you deliberately choose to use only the silliest measure, which says more about you than about Apple.

  • by Anonymous Coward on Tuesday January 04, 2011 @08:25AM (#34752634)

    That made me actually read the article and it does not really indicate that Apple has anything earth shattering for enterprise at all. I have not really heard anything either, hence the quietly I guess. All it talks about is how enterprise is "figuring out" how to integrate the iPad. I hardly see that as providing key technology to enterprise which is exactly what the summary and article claims.

    Apple is not focusing on a market. They are focusing on building what they think are the best products that they can make. They are focusing on creating things that people like using and so want to buy.

    It seems to be working, as people buy these products for their personal use, and then want to keep using them at work. It's the same principle that PCs originally got into business: not through official IT channels (which used mainframes and minis), but through small groups using their departmental budgets to get the devices.

    Similarly MacBooks, iPhones, etc. didn't get into business through official IT support, but rather people bought them on their own and gerry-rigged them to talk to the corporate network. At some point they hit (or are hitting) a critical mass and official IT policy can no longer ignore them (or ban them in many cases). Just like the original PC.

  • by drinkypoo (153816) <martin.espinoza@gmail.com> on Tuesday January 04, 2011 @09:42AM (#34753096) Homepage Journal

    All it talks about is how enterprise is "figuring out" how to integrate the iPad. I hardly see that as providing key technology to enterprise which is exactly what the summary and article claims.

    iPad buying has become a frenzy. Companies are making them fit all kinds of places they don't fit well so that they can look forward-thinking by following everyone else.

  • by RobertM1968 (951074) on Tuesday January 04, 2011 @10:11AM (#34753362) Homepage Journal

    Don't forget Exchange which if a company ignores that, clients ignore that company.

    I always try to forget Exchange. And so are more and more companies each year. You should look it up sometime.

  • by stewbacca (1033764) on Tuesday January 04, 2011 @12:00PM (#34754508)

    Are you serious? Only a true hater would remotely contend that Apple somehow stole the standard they initiated.

    IEEE 1394 was initiated by Apple (in 1986[2]) and developed by the IEEE P1394 Working Group, largely driven by contributions from Apple, although major contributions were also made by engineers from Texas Instruments, Sony, Digital Equipment Corporation, IBM, and INMOS/SGS Thomson (now STMicroelectronics).

    I'll ignore the tired Xerox argument.

    They didn't steal FireWire, they initiated it.

    Contrast Apple's track record to Microsofts blatant 'wait until the competitor makes something good, then copy it badly'.

    Ever notice the Window Phone guy looks just a little bit like the Android guy? They aren't even original with stupid cartoon brand identity!

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