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Apple

Wall Street: Software More Valuable Than Oil 223

Posted by samzenpus
from the rich-in-ideas dept.
CWmike writes "The tech industry's answer to this week's stock market roller coaster was delivered on Tuesday by the mighty Apple Inc. Apple saw its stock price rise enough — gaining more than 5% — to briefly surpass Exxon Mobil as the most valuable company in the U.S., according to an AP analysis of its market cap. (Exxon Mobile wound up the day slightly ahead of Apple.) Most of the other major tech companies — including Intel, IBM, Dell, Microsoft and Hewlett-Packard — all finished in positive territory yesterday, as markets made up ground lost in the big sell-off on Monday that also hit oil prices and other commodities.Tuesday's rally may be all that's needed to shake away, at least temporarily, some of the economic concerns the IT industry still faces. By closing in on Exxon, Apple effectively affirmed that there are few limits to tech growth. CW blogger Jonny Evans posits that ideas are why Apple beats Exxon on market cap, noting, 'While Exxon drills, hammers and crushes its way to find its billions, Apple's mind-miners explore myriad complexities to develop and understand new technologies.'"
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Wall Street: Software More Valuable Than Oil

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  • An iPad will get you through times of no oil better than oil will get you through times of no iPad.

    • Depends on whether or not your boss is understanding of you not showing up for work because there's no gas for your car...
      • by peragrin (659227)

        depending on job you can work from home without gas (yea for nuclear power),

        So yeah it is possible he can understand.

        me I am in sales, I can do about a 1/3 of my responsibilities with a laptop, net connection and cell phone.

        • Re: (Score:2, Funny)

          by Anonymous Coward

          me I am in sales

          *barf*

        • by toastar (573882)
          um.... working from home is fine, but how do you expect to get food to the grocer?
          • Erh... I go downstairs and then across the street. Actually, my car is parked further away than the grocery.

            Not every place on earth is like the US where you pretty much need a car to collect your mail. In some areas there are actually still small/medium sized shops that don't gauge you, regular, normal grocery shops that exist between the apartments.

            • by mcgrew (92797) *

              Not every place on earth is like the US where you pretty much need a car to collect your mail.

              My car threw a serpentine belt last Thursday. My legs hurt now! But, er, how are they going to truck those groceries to the store across the street form you without fuel? Upload them from their iPods?

        • by BitZtream (692029)

          Yea, and what about the other 2/3rds? You think you're boss is going to understand that part not getting done?

          You are CLEARLY in sales based on your statements. You think its perfectly acceptable to deliver a product that only does a 1/3rd what you claim it does.

      • Depends on whether or not your boss is understanding of you not showing up for work because there's no gas for your car...

        Wait. So the presumption we're going on here is that the world ran out of oil for him, but has plenty of oil left for the rest of the employees? OK.

    • by drinkypoo (153816)

      An iPad will get you through times of no oil better than oil will get you through times of no iPad.

      Not if we're talking about baby oil.

    • by mcgrew (92797) *

      Yeah, you can sell the iPad to buy... dude, that joke sucked. Sorry. Pot will get you through times of no money better than money will get you through times of no pot, but that meme just doesn't work with oil and iPads.

      I had an iPad once. The iDoctor made me wear it after my iSurgery.

  • by WrongSizeGlass (838941) on Wednesday August 10, 2011 @04:02PM (#37049120)
    Look, Apple closed above Exxon today but that doesn't make software worth more than oil. Oil is a finite resource and has price fluctuations like many other commodities. There is an endless supply of coders to spew out software.

    Now, good software may be worth more than oil, but I don't think there's enough of it around to really turn it into a commodity.
    • There is. It's use in aerospace and space travel. Ya know, the kind of places where a bluescreen or a burping driver can not only really ruin your day, but the day of many people at once.

      • by sjames (1099)

        I'll admit that depending on what he had for lunch, a burping driver can be quite unpleasant, but you shouldn't let it ruin your whole day.

    • by 32771 (906153)

      But coders run on Oil.

  • Umm... (Score:5, Informative)

    by fuzzyfuzzyfungus (1223518) on Wednesday August 10, 2011 @04:02PM (#37049134) Journal
    Bizarre coinages aside, Wall Street wasn't making a comparative pronouncement on the value of software and oil(pro-tip: without oil, the market for shiny consumer goods would skew heavily toward the 'canned' variety...); but on the relative value of a company with substantial ability to pull margins that its peers cannot, vs. a company with a smaller ability to do that.

    Now, carry on. It's the "information age" or somesuch...
    • by AK Marc (707885)
      Value is generally driven off dumb people's guesses about what they think the value will be in 10 years or so. Apple is getting better, and is already big, so they will be worth lots. Oil isn't a growth field, so it's less attractive to those incapable of understanding P/E and such.
    • by BitZtream (692029)

      (pro-tip: without oil, the market for shiny consumer goods would skew heavily toward the 'canned' variety...);

      Pro-Tip: Without oil, computers are not possible. Too many components of oil are required for manufacturing of pretty much every component, ESPECIALLY the ICs themselves. And of course the massive amount of plastic that goes into any modern computer wouldn't exist without oil. In short, no oil means no PC as well.

      • by Relayman (1068986)
        Pro-Tip: Without computers, oil is not possible. Too many computers are required for the manufacturing of pretty much every component of oil, ESPECIALLY the cracking towers that make the gasoline that goes in your car. And of course the massive amount of development that goes into any modern oil field wouldn't exist without computers. In short, no computers mean no oil as well.

        I couldn't resist. The only point I see is that computers and oil are codependent.
        • While I see your humor, I have to argue that your point (and, to be honest, the point you were replying to) is a victim of mistaking (or improperly generalize) Nth generation tools as 1st generation tools.

          Computer control of equipment is done because computers are available. Use of petroleum products in computers is done because petroleum is available. Substitutes in each case exist, but result in lower efficiency and/or greater costs. Much greater costs, much lower efficiency in many cases.

          But you'll re

          • by mcgrew (92797) *

            And the first things we'd recognize as computers were analog/mechanical devices. ... unless you count abacuses, of course.

            Er, the first things we'd recognize as computers were really primitive -- they used vacuum tubes (discounting abacuses, slide rules, and mechanical calculators).

            I didn't grow up with computers, computers grew up with me [kuro5hin.org].

            Considering that the Univac had 5,000 vacuum tubes that did 1,000 calculations per second, that's pretty impressive. A musical Hallmark card has more computing power.

            If E

        • by BitZtream (692029)

          Wrong, oil was found before the modern computer was a glimmer in someones eye. The modern computer however simply CAN NOT be produced without the beneifit of oil processing.

          It is POSSIBLE to drill for oil, find it, and process it entirely without computers. You can not make a pentium processor without crude oil, it is simply not currently possible. You can act like we can't live without computers, but the reality of it is that we would simply be less efficient and not accomplish things as fast, but nothi

    • by mcgrew (92797) *

      It has nothing to do with value. It has to do with investors thinking that "hey, the world economy tanked, they're not gonna need as much oil as we thought they would". Exxon and Apple are probably both good investments, but I'm glad oil tanked. Gasoline will be cheaper next week, and I have to drive.

  • ridiculous (Score:5, Insightful)

    by JonySuede (1908576) on Wednesday August 10, 2011 @04:03PM (#37049136) Journal

    This is ridiculous !

    Without oil we have no modern civilization. Even if you could somehow replace all the energy produce from oil, you will still need it for: pharmaceuticals, cosmetics, plastics and others various organics chemicals. The modern world depends on oil even more than it dose on software.

    • by Slur (61510)

      Yep! We're past the tipping point, but maybe we'll be ok in the long run. Once we terra-form Mars.

    • Re:ridiculous (Score:4, Interesting)

      by cfalcon (779563) on Wednesday August 10, 2011 @04:28PM (#37049442)

      Actually, if you could replace all the energy you get from oil, you could use that energy to make the items you list out of simpler substances- no one has any problem combining ingredients to create oil and gas, the issue is that it's never efficient to do so compared to getting it out of the ground. But if we were given a magical device with 100x the energy of all our current sources, we could just afford to fabricate oil and whatever the end products are from veggies and such.

      • the issue is that it's never efficient to do so compared to getting it out of the ground

        no, it is not just less efficient, it isalmost always has a negative energy balance.

        But if we were given a magical device with 100x the energy of all our current sources, we could just afford to fabricate oil and whatever the end products are from veggies and such.

        True but requires a magical device....

        • by mcgrew (92797) *

          True but requires a magical device....

          To someone from 1911 an iPod would be magical. To someone from 1811 an airplane would be magical. Have you kids no imagination? I'm 59, I live in a science fiction world. Self-opening doors, communicators, flat screen computers, PADDs, almost everything from the original Star Trek of my youth is commonplace today. Hell, stuff today is past what sci-fi writers envisioned when I was young. See this journal [slashdot.org].

          Hell, in Star Trek II McCoy gave Kirk a pair of reading glasses,

    • Re: (Score:2, Insightful)

      by AK Marc (707885)
      What value does Exxon bring that would be lost if they closed tomorrow? Anything? Are they growing as a company, introducing new products that dominate markets? No? Then they are not worth any more than the return on their dividends. Apple has mystique. They could theoretically grow forever. So as an investment, may make more sense, and that's what this indicates, nothing about the value of the products they sell. That's like saying that nobody needs energy because Enron went under.
      • What value does Exxon bring that would be lost if they closed tomorrow? Anything?

        You would lose a 25% return on capital used company and you would lose about 4.4millions barrels of oil a day. I you lose apple you only lose a company sitting on cash that produce finished product without doing any fundamental R&D.

        • by AK Marc (707885)
          And there would be hundreds of companies willing to do that work for the same terms as Exxon. No loss, just a momentary blip. Apple produced unique things. There would be no iPad if there was no Apple.
    • by Phleg (523632)
      Flamebait taken.
    • by couchslug (175151)

      "Without oil we have no modern civilization."

      Or Apple computers.

    • Absolutely it is. If anything this shows HOW FUCKING WASTEFUL to our world the "information" economy is. Did apple spend X amount to deliver goods to X people? Hell no, they wrote something once and copied it over and over. That copying will be the end of us fundamentally - if you can claim money for a good to which that money you claim was not associated with a creative act, eventually money itself won't have value. I don't care what your theories are - if we all pay money for something that is in effect f
      • by geekoid (135745)

        Apple is a hardware company.

        " I don't care what your theories are"
        so you have stopped thinking in any way and jumped to a baseless conclusion. Grow the fuck up.

    • by Svartalf (2997)

      Heh... You can get "Oil" from other sources- just not as easily as you can pulling them from the ground...

      All it takes is exposing organic matter (biomass, coal, etc...) to one of several differing pyrolysis processes and you get "Oil"- sweet crude. At efficiencies typically in the ballpark of 70-85%.

      • you get "Oil"- sweet crude

        you don't have the nice mix of complex hydrocarbons formed under high pressure that are so valuable to the chemical industry, however you could replace tar sand oil with it.

    • by mrmeval (662166)

      Find this, an oil company exec stated that they could shut off gasoline and diesel production, have less regulation, taxes and other red tape and make MORE money selling their products as chemical feed stock. They stated the only reason they had not gone that route was their existing customer base and the fear of political reprisal.

      I may have imagined hearing that but dimly recall it was not a big name oil company.

    • by geekoid (135745)

      Without software and computers we don't have a modern world...unless you consider 1850 the modern world.

      • no, before the software there always is hardware, I know about relay based logic and this date back to 1920 in academia and 1930s on production line. I am pretty sure that I am not the only one to know about that. Without software the only truly important thing that would be missing is the INTERNET....

    • This also shows that Apple is more valuable than air. After all, air is free!

      Uh, yeah. The idea that price equals value is dangerous ideological mumbo-jumbo. Prices tell what something costs to buy. They do not indicate what it is worth to have. This is why political economists (particularly Marxist ones these days) distinguish between use value and exchange value.

      Examples of market prices failing to reflect use values are too numerous to count. Fancy clothes and cars vs basic food, for example, or th

    • by mcgrew (92797) *

      Cosmetics? Yeah, that's really necessary! The other things you mention can be achieved by other means; oil is, after all, organic. If all oil disappeared tomorrow we'd still get by; there are substitutes, all organic.

      And IMO we'd be better off without cosmetics. And fashion in general.

    • by Jonner (189691)

      This is ridiculous !

      Without oil we have no modern civilization. Even if you could somehow replace all the energy produce from oil, you will still need it for: pharmaceuticals, cosmetics, plastics and others various organics chemicals. The modern world depends on oil even more than it dose on software.

      Oil has been pretty important, but it's a bit of a stretch to say it's necessary for modern civilization. Automobiles didn't originally depend on it and plastics have been made from things other than petroleum. Many areas of technology would have developed quite differently and probably more slowly without petroleum, but perhaps more long-term sustainable energy sources would be more prevalent today.

    • by rubycodez (864176)
      about ten percent of oil is used for those other things, and oil can be replaced with any other hydrocarbon (natural gas, coal) to make any desired length hydrocarbon. so no worries about feedstock, we can go back to worrying about pollution.
  • by bwintx (813768) on Wednesday August 10, 2011 @04:03PM (#37049142)
    Market essentially washed away what it gained back yesterday, and Apple did end up on top today, FWIW.

    "Apple Overtakes Exxon to Become Most Valuable" [bloomberg.com]
    • Market cap doesn't really mean all that much. Other metrics, including revenue and profits matter much more. And so what if Apple is the "largest" publicly traded company right now? That changes so often that it doesn't really matter. Microsoft used to have that title. Cisco had that title for a few days about 11 years ago. GE had that title in the '80s. Besides, there are even larger corporations out there. Saudi Aramco, for example, would be worth trillions of dollars by market cap if it were a public com

  • by Anonymous Coward on Wednesday August 10, 2011 @04:07PM (#37049182)

    "Apple's mind-miners explore myriad complexities to develop and understand new technologies."

    Apple isn't NASA in the 60's, it's a manufacturer of shiny gadgets. They don't even have a research division.

    Apple profits because people are vain, and are willing to accrue massive amounts of debt to buy pretty things.

  • by nedlohs (1335013) on Wednesday August 10, 2011 @04:17PM (#37049292)

    These are the people who in days gone by would read tea leaves.

    • by dudpixel (1429789)

      hold on there. while stock prices are notoriously volatile, they ARE a measure of public confidence in a company.
      So whilst you could claim that it is not representative of how much a company is worth (and rightly so), the stock price IS representative of how much the public (well, shareholders actually) THINK a company WILL be worth.

  • by istartedi (132515) on Wednesday August 10, 2011 @04:18PM (#37049308) Journal

    Without a high-energy society, there is no Apple. Without plastics, there are many missing parts. Without diesel powered container cargo vessels, you must make your products locally for much more money. Without energy intensive semiconductor fab, there is no product. Without electricity the product is not powered. Most importantly, without high-energy freeing up labor, nobody can afford your device. They would be too busy plowing fields with draft horses.

    • by 32771 (906153)

      Some argue hat oxen are more patient with clueless geeks on the field than draft horses:

      http://www.energybulletin.net/stories/2011-08-09/our-future-our-past [energybulletin.net]

      I heard that my grandfather had to use an ox on the field when the Russians took the horses. He wasn't happy about it. Contrary to the author of the above article speed does matter on the field, especially when you are being squeezed by an energy starved society that doesn't wan't to work on the fields.

  • Apple makes much more than just software. iPhones, iPads and Mac's are not software. I truly hate blanket statements like this. All the happened was the market cap of an information technology firm exceeded the market cap of an oil company. These numbers reflect the value of the companies not the value of the underlying commodities.

    • by vlm (69642)

      Apple makes much more than just software. iPhones, iPads and Mac's are not software. I truly hate blanket statements like this. All the happened was the market cap of an information technology firm exceeded the market cap of an oil company. These numbers reflect the value of the companies not the value of the underlying commodities.

      Apple does not make any of those devices. A company in China makes them. Apple supposedly designs them, and definitely Apple markets and distributes them.

      Exxon does not "make" oil either. They're pretty hot stuff at finding it, and coordinating the work of subcontractors to pump it out, assuming the country owning the land allows them to work instead of using their own nationalized company (petrobras, etc). In a world of declining oil production, I'm not sure how useful Exxon is. Kind of like a middlem

      • by jklovanc (1603149)

        Apple does not make any of those devices. A company in China makes them. Apple supposedly designs them, and definitely Apple markets and distributes them.

        Semantics is a poor argument. Does Ford make cars or just assemble them as the parts are made by non-Ford companies? You know what I meant but decided to be cute.

        Exxon does not "make" oil either. They're pretty hot stuff at finding it, and coordinating the work of subcontractors to pump it out, assuming the country owning the land allows them to work instead of using their own nationalized company (petrobras, etc). In a world of declining oil production, I'm not sure how useful Exxon is. Kind of like a middleman. Does transocean really need exxon anymore if all the worlds oil is already found, mostly remains in far away lands where exxon isn't allowed to work, and TO is already pumping it?

        It looks like you have it backwards; Transocean is an offshore drilling company and ExxonMobile is the producer. TO doesn't pump oil, they just drill holes to get at it. If all the oil was found it would be Transocean in trouble and not ExxonMobile. By the way, all the oil has not been found. That is why oil companies are spending billions searchin

    • by dudpixel (1429789)

      It is the software that makes these machines what they are. It is the software that differentiates Apple from other companies.

      Sure the design and hardware is good too, but we see plenty of good designs out there, yet it is iOS and OSX that drive people to buy Apple.

      OSX is further proof of this. The hardware it runs on hardly differs from a standard PC (and you can in fact build a hackintosh from standard pc parts) - yet its value lies in the software.

      So while you could say Apple is delivering the whole ex

  • I wonder, though, where a treatment like this leaves the human immune system.

    A vaccine spurs the immune system to generate antibodies, so that when we're actually infected by the virus, the antibodies are available to combat it. Our own immune systems do all the work.

    This new type of treatment, however, kills off the cells that have been infected by viruses, so the viruses aren't able to use the cell's materials to replicate. As the cells die, so do the viruses. From the sound of it, the treatment achieves

  • And today apple was down over $10/ share while Exxon was up $.07/ share. And who knows what tomorrow will hold. Perhaps Sharpies will be more valuable than both. ;-)

    • by tverbeek (457094)

      Neither of them will ever be more important than happiness.

      Though a bit of oil and a mobile computer can contribute. :)

      • by geekoid (135745)

        happiness is only important to people who value happiness.
        And yes, money does, in fact, buy happiness.

  • Back in 1999 (before the tech bubble burst), Microsoft was the company with the largest market cap. And they made less hardware then (this was pre-Xbox) than Apple does today.

    They were over 2x larger than Exxon Mobil in market cap at the end of 1999.

    Is ComputerWorld implying that back in 1999 Microsoft had "ideas" that were more valuable than Exxon Mobil?

    Source: http://fortboise.org/top100-history.html [fortboise.org]

  • Apple makes a majority [ipadjailbreak.com] of their income on iOS devices. They're making income on the combination of hardware and software. Pure "software" sales are a *VERY* small percentage of their income.

    • by dudpixel (1429789)

      how much does the hardware cost?

      now how much does the software cost?

      you even called them "iOS devices". It is the software that makes them what they are.

      Its not about whether Apple is a company that primarily does one or the other, its about what part of Apple is the most VALUABLE. I'd say its the software.

  • by Dunbal (464142) * on Wednesday August 10, 2011 @04:32PM (#37049486)

    Apple's mind-miners explore myriad complexities to develop and understand new technologies.

    "New" technologies? What exactly has Apple invented here, apart from an OS taken from unix, applications written at no cost to Apple because they were done by others, touch screen technology that's been around on PDA's for almost 15 years, etc. Yeah they put it into a good looking package and built a good brand and marketed the crap out of it, but there's nothing exactly "cutting edge" here except for maybe the gross violation of your rights when they make you sign exclusivity contracts with third party cell phone providers.

    Now, guess which company is more important. A company that obtains and produces a (relatively) cheap source of energy, or a company that produces a marginally different but very shiny communications/computing device?

    Apple is fantastically over-valued and overbought, as anyone holding $400 Apple stock will tell you. I can just imagine the pain of the people who have been stopped out. Well what did you expect when you were buying the stock? Largest market cap != biggest money maker. Amazing revenue growth rates have to make you wonder how sustainable they are over the medium and long term. The bigger they are, the harder they fall. Me, I will cover my shorts at $280 and re-assess.

    • Apple currently has a p/e ratio of 14, with strong growth prospects (look what they are doing internationally, their Mac growth is strong in a down market, etc) and a solid management team. I don't care whether they are bigger than Exxon or even whether they make good products, but what justification do you have to say that they are over-bought? You have none.
  • Apple's products are hardware-software bundles. Apple sometimes sells updated software to use on hardware you already bought from them. They also are a vendor of content -- none of which they create -- with the goal of making their hardware-software bundles even more appealing.

    Stupid exceptions that don't change my argument:
    FileMaker (a mostly-ignored Apple subsidiary)
    You can use iTunes on Windows to purchase music & video and never put them on an Apple device. This wasn't the goal of th

  • by makubesu (1910402) on Wednesday August 10, 2011 @04:39PM (#37049580)
    what countries are we going to invade for software now?
    • Canada. We have high quality software developers up here, like EA.

      BTW - its not that cold up here. You'll mostly like the temperature during your invasion.

    • by steelfood (895457)

      Already doing it to Western Europe in the form of software patents and ever-increasing length of copyright. But I guess they call it "diplomacy" instead of "war".

  • by tgd (2822)

    1) Apple isn't a software company, its a hardware and media company.
    2) Apple's stock rebounds quickly, so a large number of investors are trying to game that tendancy as the market drives the price down.

    I've made a killing on Apple the last two weeks day trading the swings.


  • Apple products made from plastic. Plastic is a byproduct of refined oil.

    Ergo, Apple is dependent on Oil, so, in no way, will Apple, ever be more valuable than oil.
  • Having a monopoly worths more than something with a lot of suppliers. Put that monopoly in worldwide basis, and with enough weight put in patenting whatever looks like built in the same planet as the ipad and you have a formula for success.

    When the bubble on imaginary things (like patents and money) blows up, probably oil won't worth a lot neither.

  • For real? I mean, I know, humanity doesn't learn jack from history, but when I see blunder after blunder after blunder from an entity, not only wasting time but also the money of millions, and I'm not even able to vote the jackasses out of their office, I guess the least I should do is to stop taking them serious.

  • Apple's mind-miners explore myriad complexities to develop and understand new technologies.

    Geez, I think I just threw up a little.

  • If we all realize that with all this tech (aka Apple products), people sit in a couch all day long, and move a mouse (or their fingers) around a 2D screen to:
    a. navigate through a 3D world/game
    b. communicate to people
    c. shop
    d. work on spreadsheets
    e. show presentations and watch TV/videos
    f. look at photos

    That explains why Apple would be at the top, as we are nothing but couch potatoes. Hand over the Cheetos.
    .
    Now went we get out of the house and....
    a. navigate through a real world
    b. talk to people face to fac

  • by Alsee (515537) on Wednesday August 10, 2011 @08:01PM (#37051412) Homepage

    By any unit of measure, even Windows 1.0 and Clippy are more valuable than gold.

    -

  • The quote from the author about "mind mining" might be true of all intellectual property combined, as a ratio of all finite resource property value. I officially dunno. But stating that a day's stock valuation is evidence of that? Gee, how did Exxon compare to Blockbuster Video ten years ago? How did Exxon compare to TWA thirty years ago? How does De Beers compare to Borders Bookstores? Stock market prices are a snapshot. If Steve Jobs has a heart attack and the stock value plummets, what grand conc
  • I don't think Apple has quite the amount of assets that Exxon has. That oil and its distribution are extremely valuable, and moreso as it runs out while our energy hunger grows. But Exxon has a vast liability. Apple has practically none. Exxon is extremely hateable, but Apple is cute. The values here are not just the assets, but the assets after the liabilities are deducted.

    • by rubycodez (864176)
      apple could disappear with all its assets from the face of the earth tomorrow, and life would go on. If Exxon did that, there would be death and starvation for weeks in first world countries. Anyone who doubts this doesn't know how the infrastructure of the world is built.

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