Even the thought is hard to believe for anyone who's been watching Apple Inc. (AAPL) over the long run. Once upon a time, the company was presumed dead, while Microsoft Corporation (MSFT) continued its march to market dominance. Today, Apple's $180 billion market value is evidence of a new era. Though it's still behind Microsoft's $250 billion, the company's rapid ascent and substantial market presence make at least speculation of catching up to the Redmond giant worth a few minutes of thought.
Microsoft is currently the most valuable technology company in the world, according to a Reuters report. Even Google, Inc (GOOG), with its astounding brand recognition and position as gateway to the internet, is worth "only" $136 billion. Apple, which was once considered a computer company that sold into education and appealed to some graphics geeks, has reasserted itself as a major global presence.
Make no mistake about it: the gap is still wide. In addition to being almost 50% more valuable than Apple, Microsoft's revenue of $58.4 billion (up 47% since 2005) still far exceeds Apple's $36.5 billion (up by a factor of greater than four for the same period). And, let's not forget Microsoft's 90% market share of the desktop operating system segment.
Apple was able to grow in a Microsoft world by moving away from the desktop, becoming a device manufacturer (iPhone), online and brick-and-mortar retailer (iTunes and Apple stores, with a new one under construction in Manhattan) and through an increase in the appeal of its laptops and desktops.
With $3.1 billion in cash flow from operations last quarter, it now has $34 billion in cash and cash equivalents, making its per-share cash holdings roughly $37. That buys a lot of flexibility, upping the company's growth prospects. And, since it doesn't necessarily have to go head-to-head with Microsoft or Google to grow, there's little standing in the way of a much higher market cap.
Will Apple pass Microsoft? Well, it's hard to say right now. But, the possibility can no longer be called "remote."
Closing Bell: When We All Love the PIIGS (NBG, SQNM, PG, ERTS, KO)
Serious Money: Cheapest Stocks List Shrinks from 26 to 21
Chasing Value: Hasbro Earnings Makes My Point
Reader Comments (Page 1 of 1)
11-10-2009 @ 11:24PM
Beltway Greg said...
Dec. 2010.
11-12-2009 @ 4:17AM
DFXD said...
1-MS DOES NOT BUILD HARDWARE-SO STRICTLY SPEAKING THEY ARE NOT IN COMPETITION
2-THE REASON APPLE WENT SOUTH WAS THAT THEY REFUSED TO REALIZE HOME COMPUTERS WOULD FIND UNIVERSAL ACCEPTANCE(STEVE OBVIOUSLY WAS NEVER INTRODUCED TO SCI-FI) AND THEREFORE REFUSED TO COMPETE.
3- THEY STILL REFUSE TO BE COMPETITIVE SO-PC S AND MICROSOFT WILL ALWAYS BE THERE.
11-19-2009 @ 11:29AM
Cha-Che said...
"Is Apple closing in on Microsoft" that's the title... Seriously? Of course Apple isn't anywhere closing in on Microsoft, not yet at least. I highly doubt that Apple will ever get on Microsoft's level.