Wednesday, April 21, 2010

I stand corrected


As an alert reader pointed out, the difference between the market caps of AAPL and MSFT is $40 billion, not $30 billion; I think my calculator failed me yesterday. Nevertheless, this is perhaps the most impressive David vs. Goliath story in modern finance: Apple's comeback from the brink of oblivion 12 years ago.

Another very interesting observation occurs to me: the amount of market cap that Microsoft has lost ($311 billion) since its late 1999 peak ($586 billion) is substantially more (32%) than Apple's market cap today ($235 billion). Even after adjusting for its $32 billion cash payout several years ago, and its ongoing dividend, it's remarkable the value that has been destroyed by Microsoft's inability to innovate.

4 comments:

Benjamin said...

In days of yore, IBM was solid gold. Then Microsoft.
Apple is a little different.

I worry that Steve Jobs is Apple. Once his creativity, or his ability to spot creative talent is gone....

My own uninformed guess is that Microsoft will have to go the way of IBM...but both have limited futures. Software will just get better and more powerful, but off the shelf and easier to use. It might even become free, in cloud computing, and you "pay" for it by enduring banner ads.



I work with some software for small businesses, paid $150 for it. It is great! A small businessman should be able to be his own accountant today.

Rob said...

Don't feel quite so keen to interact with your blog these days Scott since you haven't bothered to reply to most of my recent postings buy hey-ho, it's your show. Anyway, FYI, the difference between msft and aapl, as I write, is now <$30bn.

Scott Grannis said...

So, I was not wrong originally, just prescient!

Rob said...

Now down to a mere $5bn difference, today or tomorrow could prove historic.