Apple now worth more than Microsoft!

[amol_cool]

Specifically, Apple's business is now worth $200 billion, while Microsoft's is only worth $197 billion--at least by one simple calculation of enterprise value.*

What's the difference between a company's stock market capitalization and the value of its actual business (which is referred to as "enterprise value")?

A company's stock market capitalization includes the net value of the cash and debt on the company's books. To figure out the imputed value of the company's actual business, therefore, you have to adjust for the value of those other things.

As an example, consider a company with a market capitalization of $1 billion that has $500 million of cash and no debt. If you were to buy all of the stock in this company, you would spend $1 billion. When you bought the company, however, you would also acquire the $500 million of cash that came with it, so your net purchase price would only be $500 million. So the company's actual business, in this case, would have been worth only $500 million.

If the same company had a $1 billion market capitalization, $500 million of cash, and $500 million of debt, meanwhile, the company's business ("enterprise value") would be $1 billion. You would get the $500 million of cash, but you'd also have to pay off the $500 million of debt, so the net cost to buy the company would be $1 billion.

As of yesterday's stock market close, Apple had a market capitalization of $223 billion. Apple has $23 billion of cash and no debt*. Apple's enterprise value, therefore, is $200 billion (per Yahoo Finance--see clarifying note below*).

Microsoft, meanwhile, had a market capitalization of $228 billion. Microsoft has $37 billion of cash and $6 billion of debt (per Yahoo Finance). Microsoft's enterprise value, therefore, is $197 billion.

So, it's official: Apple is now worth more than Microsoft.

Source

Also read this: Apple's amazing journey

P.S. Please don't start a war here now!

 

[Mephistopheles]

A temporary spike in stock price is temporary, wont remain for long. But Im still shocked to hear that Apple has a market value of 223 Billion, iPhones selling like hot cakes might be the reason.

BTW, How much share does Steve Jobs have in Apple Inc.?

 

[Lord Nemesis]

Apple owes its success to the brilliant marketing strategies of Steve Jobs and even more to Microsoft (or rather Gates) without whose help it would not have survived past the 90's let alone allowed Jobs to put his strategies into action. ...

....

The last time Apple had a higher market value than Microsoft was December 19, 1989, according to Thomson Reuters Datastream.

Microsoft, whose operating system runs on more than 90 per cent of the world's personal computers, has not been able to match growth rates from its hey-day 1990s. Its stock is down 20 per cent from 10 years ago.

Apple, which struggled for many years to get its products into the mainstream, resorted to a $150 million investment from the much larger Microsoft in 1997 in order to keep it afloat. At that time, Microsoft's market value was more than five times that of Apple.

Microsoft still leads Apple in sales. In the latest quarter, Microsoft reported $14.5 billion in revenue compared with Apple's $13.5 billion.

Apple overtakes Microsoft as biggest tech co - Software & Services - News - Tech - The Times of India

 

[amol_cool]

A temporary spike in stock price is temporary, wont remain for long. But Im still shocked to hear that Apple has a market value of 223 Billion, iPhones selling like hot cakes might be the reason.

BTW, How much share does Steve Jobs have in Apple Inc.?

Agreed completely, but what is worth crediting is Apple, who once survived because of Microsoft now has overtaken that giant! From $16 billion to $223 billion in just a decade or so is quite an amazing journey IMO

 

[Mephistopheles]

Apple owes its success to the brilliant marketing strategies of Steve Jobs and even more to Microsoft (or rather Gates) without whose help it would not have survived past the 90's let alone allowed Jobs to put his strategies into action. ...

Apple overtakes Microsoft as biggest tech co - Software & Services - News - Tech - The Times of India

Agreed completely, but what is worth crediting is Apple, who once survived because of Microsoft now has overtaken that giant! From $16 billion to $223 billion in just a decade or so is quite an amazing journey IMO

The part I never understood was that why would Microsoft bail out Apple? Weren't relations between them bad ? (I assume that because Apple sued Microsoft for copying the GUI of Apple Lisa)

 

[DigitalDude]

The part I never understood was that why would Microsoft bail out Apple? Weren't relations between them bad ? (I assume that because Apple sued Microsoft for copying the GUI of Apple Lisa)

ms invested in apple in exchange for some software favours in mac.. just google it out, lot of stories.

btw apple themselves copied the gui from xerox parc

_

 

[blr_p]

Agreed completely, but what is worth crediting is Apple, who once survived because of Microsoft now has overtaken that giant! From $16 billion to $223 billion in just a decade or so is quite an amazing journey IMO

They are not the die-hard rivals of old anymore now are they ?

OS-X is never overtaking Windows anytime soon. M$ isn't into the media player or even portable computing segment to the extent Apple is. Would be interesting to see a breakdown of the different segments Apple is in with corresponding returns.

What's given them all those hundreds of billions since 1997 when they were on life-support.

 

[agantuk]

^ iPod family and iTunes may be?

 

[blr_p]

$100billion+ in just eight years ?

itunes makes a loss to sell ipods.

 

[Styx]

Its common sense that "brilliant marketing strategies" amount to nothing if you don't have products to back it up.

Fortune: Apple Is 'most Admired' Company for 2010

And this whole "MS saved Apple" notion is nothing but BS shoved to masses by MS apologists over the last decade. In reality, MS saved nothing but its own ass.

Mac Office, $150 Million, and the Story Nobody Covered

Microsoft's Plot to Kill QuickTime

btw apple themselves copied the gui from xerox parc

False.

Myth: Copyright Theft, Apple Stole GUI from Xerox PARC Alto

What's given them all those hundreds of billions since 1997

Pretty much everything they've done.

- Businessinsider.

 

[blr_p]

Good, now wait till XP hits EOL in a cpl of years, you will see lots of profit coming m$'s way form the corps. Vista was a flop in the corporate circle. windows 7 will change things around.

Still, looking at the graph and you can see that portables make up two thirds of Apple's revenue. That's an achievement they can be proud off. The desktop was over move into the portable space and capture it.

 

[amol_cool]

@Styx

Thanks a lot for those links! Amazing read

So it was all Microsoft's ploy again?!

 

[thetoxicmind]

you can see that portables make up two thirds of Apple's revenue. That's an achievement they can be proud off

You can say that again!

Sales of the iPod surged to over 14 million units, more than 200%, in the first quarter of 2006, reflecting its huge popularity in the holiday gift giving season. In the two quarters since, the iPod's popularity has still increased by 32% over last year's sales. Those numbers reflect a satiated demand for the current iPods following the huge surge, not a sudden trend toward using mobile phones and PDAs to listen to music.

On 22 January 2008, Apple reported the best quarter revenue and earnings in Apple's history so far. Apple posted record revenue of US$9.6 billion and record net quarterly profit of US$1.58 billion. 42% of Apple's revenue for the First fiscal quarter of 2008 came from iPod sales, followed by 21% from notebook sales and 16% from desktop sales.[64]

On 21 October 2008, Apple reported that only 14.21% of total revenue for fiscal quarter 4 of year 2008 came from iPods.[65]. At the September 9, 2009 keynote presentation at the Apple Event, Phil Schiller announced total cumulative sales of iPods exceeded 220 million.

 

[DigitalDude]

[...]
False.

Myth: Copyright Theft, Apple Stole GUI from Xerox PARC Alto [...]

the point is the GUI is not a basic apple innovation. they invented few portions on top of that xerox gui. they paid or not is legality issue. the blog post cannot give the big picture, just picks out stuff/facts from here and there.

the book 'apple confidential' is a good read, chapter 8 is about the xerox issues and the last chapter (26) talks about the 1997 issues, MS etc. and now there is also a follow-up to the book 'apple confidential 2.0'

one excerpt from chapter 8:

Even though the (Xerox) Alto was never sold to the public, it was well known in Silicon Valley. The PARC researchers were proud of their creations and willingly showed them off to many curious visitors who dropped by the campus during the early years. One person in particular who had been impressed with their work was Jef Raskin, an Apple employee who was heading up a small, obscure research project code-named Macintosh. As a visiting scholar at the Stanford Artificial Intelligence Laboratory in the early 1970s, Raskin spent a lot of time at PARC and thought what the researchers and engineers were doing there was wonderful.

Raskin says he tried convincing Jobs to go see the wonderful stuff at Xerox PARC, but in his binary way of viewing the world at the time, Jobs considered Raskin a “shithead who could do no good,†so he ignored Raskin’s recommendation. However, Raskin had an ally in software engineer Bill Atkinson, who had been his student at the University of California at San Diego and now worked on LisaGraf primitives, the basic graphics routines of the Lisa (ultimately these would be named QuickDraw, a term Raskin coined in his 1967 Penn State thesis). In Jobs’ eyes, Atkinson was a hero who could do no wrong, so when Atkinson pushed Jobs to visit Xerox PARC, Jobs readily agreed. By then the Smalltalk group had tired of holding open houses, and Xerox had tightened security at the facility. Fortunately, Jobs had just what it took to open the doors.

Jobs approached the Xerox Development Corporation, the venture capital branch of the copier giant, and boldly told them, “I will let you invest a million dollars in Apple if you will sort of open the kimono at Xerox PARC.â€

and see in the blog how the 'op editor' tells he is debunking myths with facts but writes in the comments "No Apple -> no GUI -> no Microsoft ripping off Apple." :bleh: :bleh:

the following wired article would be interesting:
Jan. 19, 1983: Apple Gets Graphic With Lisa | This Day In Tech | Wired.com

some quotes from Folklore.org: Macintosh Stories: A Rich Neighbor Named Xerox

[...]
"You're ripping us off!", Steve shouted, raising his voice even higher. "I trusted you, and now you're stealing from us!"

But Bill Gates just stood there coolly, looking Steve directly in the eye, before starting to speak in his squeaky voice.

"Well, Steve, I think there's more than one way of looking at it. I think it's more like we both had this rich neighbor named Xerox and I broke into his house to steal the TV set and found out that you had already stolen it."

Unfortunately, it turned out that while the agreement that Microsoft signed in 1981 stipulated that they not ship mouse-based software until a year after the Mac introduction, that ended up being defined in the contract as September 1983, since in late 1981 we thought that the Mac would ship in the fall of 1982, and we foolishly didn't let the ship date float in the contract. So Microsoft was within their rights to announce Windows when they did. Apple still needed Microsoft's apps for the Macintosh, so Steve really couldn't cut them off.
[...]

[...]Neil's version of Windows, released a couple of years later, was good enough that Apple filed a monumental copyright lawsuit against Microsoft in 1988, but they eventually lost on a technicality (the judge ruled that Apple inadvertently gave Microsoft a perpetual license to the Mac user interface in November 1985).

MSFT is evil and so is AAPL hyeah:

_

 

[Lord Nemesis]

OS-X is never overtaking Windows anytime soon. M$ isn't into the media player or even portable computing segment to the extent Apple is. Would be interesting to see a breakdown of the different segments Apple is in with corresponding returns.

What's given them all those hundreds of billions since 1997 when they were on life-support.

Jobs must have already decided by the time he came back to Apple that they cannot compete in the market with innovation alone. Apple of the 80's was mostly innovation (Even if some ideas were stolen from others) and very little marketing. Most of their products after 1997 were 1% innovation and 99% marketing starting with the iMac. A mediocre product with proper marketing will bring more revenue than a great product with avg marketing. A company like MS invests a lot in R&D. On the other hand, Apple's investment in R&D is considerably less and they started investing more on marketing. There was nothing innovative about the iMac's design, design wise it was something they had back in 1983. What's different this time was that they hyped it up heavily though careful marketing. It was the same with iPod. The only major standout was the click wheel, but they did a massive amount of marketing to hype up the product and managed to sell and keep selling an insane amount of those. After the success of iPod in the market, they had given up investing much on their desktop products which was already fetching them stable revenues and choose to invest in other things like the iPod and iPhone. Even though desktop market is their lowest priority and they invest minimally in that area, they are still getting most of their revenues from there last I checked, but iPod and iPhone sales are not far behind and they will soon be main source of apples revenue.

And this whole "MS saved Apple" notion is nothing but BS shoved to masses by MS apologists over the last decade. In reality, MS saved nothing but its own ass.

Mac Office, $150 Million, and the Story Nobody Covered

Microsoft's Plot to Kill QuickTime

Just a pile of speculations to ease apple fans on why Apple was helped by their competitor, they are just as good or bad as anyone else's speculations. From what I understood myself at the time it happened, that financial aid was more of a Bill Gates initiative than Microsoft's to help a Company that Gates once praised and admired in the 80's, if course there were other things involved since it done as an investment. There were also speculations at the time that the time that the amount was larger than $150 Million. But what ever the case, with the kind of position Apple was reduced to during the time Jobs was thrown out and brought back, with out that aid, apple would have reduced to dust in the next few years

False

Myth: Copyright Theft, Apple Stole GUI from Xerox PARC Alto

Apple Corporation, Inc. v. Microsoft Corporation, 35 F.3d 1435 (9th Cir. 1994) was a copyright infringement lawsuit in which Apple Computer, Inc. (now Apple Inc.) sought to prevent Microsoft Corporation and Hewlett-Packard from using visual graphical user interface (GUI) elements that were similar to those in Apple's Lisa and Macintosh operating systems. The court ruled that, "Apple cannot get patent-like protection for the idea of a graphical user interface, or the idea of a desktop metaphor [under copyright law]..."[1] Because Mac's GUI was heavily based on unlicensed GUI developed before by Xerox, in the midst of the Apple v. Microsoft lawsuit, Xerox also sued Apple on the same grounds.[2] The lawsuit was dismissed because Xerox had waited too long to file suit, and the statute of limitations had expired. Apple lost all claims in the suit except for the ruling that the trash can icon and file folder icons from Hewlett-Packard's NewWave windows application were infringing. The lawsuit was filed in 1988 and lasted four years; the decision was affirmed on appeal in 1994[1], and Apple's appeal to the U.S. Supreme Court was denied.

Apple had previously agreed to license certain parts of its GUI to Microsoft for use in Windows 1.0. When Microsoft made changes in Windows 2.0 adding overlapping windows and other features found in the Macintosh GUI, Apple filed suit. Apple added additional claims to the suit when Microsoft released Windows 3.0.

Apple claimed the "look and feel" of the Macintosh operating system, taken as a whole, was protected by copyright, and that each individual element of the interface (such as the existence of windows on the screen, the rectangular appearance of windows, windows could be resized, overlap, and have title bars) was not as important as all these elements taken together. After oral arguments, the court insisted on an analysis of specific GUI elements that Apple claimed were infringements. Apple listed 189 GUI elements; the court decided that 179 of these elements had been licensed to Microsoft in the Windows 1.0 agreement and most of the remaining 10 elements were not copyrightable—either they were unoriginal to Apple, or they were the only possible way of expressing a particular idea.

Midway through the suit, Xerox filed a lawsuit against Apple claiming Apple had infringed copyrights Xerox held on its GUIs. Xerox had invested in Apple (ie, Apple had given Xerox Board members stock in exchange for access to the research performed at PARC) and had invited the Macintosh design team to view their GUI computers at the PARC research lab; these visits had been very influential on the development of the Macintosh GUI. Xerox's lawsuit appeared to be a defensive move to ensure that if Apple v. Microsoft established that "look and feel" was copyrightable, then Xerox would be the primary beneficiary, rather than Apple. The Xerox case was dismissed because the three year statute of limitations had passed.[2]

Apple Computer, Inc. v. Microsoft Corporation - Wikipedia, the free encyclopedia

 

[blr_p]

Looking at Styx's graph again, going with the iphone, just adding up the peaks @$600 per iPhone

Would it be fair to say 35 million units have already been sold worldwide ?

If it sells for less than $600 then units sold approaches 50 million.

 

[Styx]

the point is the GUI is not a basic apple innovation...

I understand what you're trying to say. It is a reality that almost every tech company's products have elements that are inspired from something else, purely original ideas are actually rare.
But the point is that Apple was and still is really good at making better use of those inspirations and coming out with products with remarkable albeit limited functionality in some cases, whereas MS fails to put those inspirations to good use. They are mostly only good at making cool concept videos and the actual products are far less exciting or they don't see the light of the day at all.

Most of their products after 1997 were 1% innovation and 99% marketing starting with the iMac.

Well, i'm sorry to say but that's seriously delusional. Marketing alone, even brilliant, does nothing. It can sell a product somehow but if the customer feels duped, the product is bound to fail at some point and in Apple case, customer satisfaction has been off the charts. Majority of buyers love their products.

A company like MS invests a lot in R&D. On the other hand, Apple's investment in R&D is considerably less and they started investing more on marketing.

MS invests a lot in R&D and yet they can't come out with a decent OS, which is what majority their business is about, in 10 years? what a shame.
What the hell do they invest billion dollars in?..the Zune?..Vista?..The new "Kin" phones?..hardly groundbreaking.
Anyway, they may be investing more than Apple in R&D but it doesn't reflect in their products. That's where the execution fails. Its laughable.

Apple in the last few years, has come up the with iPhone, the App store, the iPad, two Mac OS X iterations, other misc Pro software revisions, industry leading notebook manufacturing process and a lot of subtle but useful innovations in portable computing.

Its simple.

MS outspends.
Apple out-delivers.

The results matter.

Just a pile of speculations to ease apple fans on why Apple was helped by their competitor, they are just as good or bad as anyone else's speculations.....

In that case, what you're implying is only your opinion as well, nothing more.
Look, i'm not saying that Apple didn't benefit from the investment, just the fact that MS didn't do it out of compassion. It was actually in serious some shit at that time and it did bail itself out by "helping" Apple.
The whole "theory" is just blown way out of proportion though.

Steve Jobs is a visionary and what he has done for Apple is truly remarkable, in fact nobody expected Apple to reach this point and surpass MS in just 10 years, it was deemed impossible.

MS on the other hand, is flatlined because they haven't done anything really worthy in the last decade or so and instead of trying to break new grounds they're just resting on their laurels - milking windows and office for all they can as that's where majority of their revenue comes from.

 

[blr_p]

Steve Jobs is a visionary and what he has done for Apple is truly remarkable, in fact nobody expected Apple to reach this point and surpass MS in just 10 years, it was deemed impossible.

While i have no dispute with the rest of your post you're not suggesting that Apple is going to continue being worth more than m$ in the future, are you ?

This is a temporary spike when the other was down. Now in five years time if the situation still remains the same you will have your point

 

[Styx]

Nobody can predict the future. I don't care if MS goes past. What matters is today and this journey.

 

[satyanjoy]

very interesting thread,,Microsoft innovated in 80s, Apple innovated in late 90s and 2ks and Google innovating now -- big daddy here its time for Steve Job and Gates to really get scared

>>M$ brings GUI based OS to mass market

>>Apple bring ipod-iTune-iphone

>>Google bring itself google n now Android