Wednesday, October 16, 2013

Apple vs. Microsoft

One of the great comeback stories of all time, arguably sparked by one simple non-decision by Steve Jobs:

We argued with Steve a bunch [about putting iTunes on Windows], and he said no. Finally, Phil Schiller and I said 'we're going to do it.' And Steve said, 'Fuck you guys, do whatever you want. You're responsible.' And he stormed out of the room." - John Rubenstein

HT: John Gruber

One more twist: Apple's new "spaceship" headquarters building, which yesterday was approved by the Cupertino City Council, will be almost as big as the Pentagon.


David said...

If you take the chart back to 1986 when I believe that Microsoft went public, Microsoft is still ahead with a compound annual growth rate of 23.7% versus 19.5% for Apple. Total return difference is slightly greater.

Scott Grannis said...

That is correct: MSFT investors have enjoyed a significantly higher total return than AAPL investors since Microsoft went public in 1986. The main reason I started this chart at 1990 is that the market cap of the two companies was almost identical at that time. Due to MSFT's higher total dividend payout, MSFT has also done better on a total return basis than AAPL since 1990, but only about 1% per year better (~20% vs. 19%).

But total return over some past period is one thing, and market cap today is another. The latter is the market's best guess of the present value of total future returns, and on that basis AAPL beats MSFT by about $167 billion.

Benjamin Cole said...

Back a generation ago, there was a joke, that was often true: If you saw a public corporation build a monument to itself in the form of a splendid gleaming corporate HQ, then sell the stock.

Then may be reason behind this: A corporation will build such an edifice only when pretty much self-satisfied, and not particularly concerned how they spend shareholder money.

At one time IBM was king, then Microsoft, now Apple.

I concur that Apple is one hell of a comeback story, more so when one considers how painless it is to declare bankruptcy and run to the next gig--and how many past high-tech or e-firms are vapor today.

Still, the self-exalting that goes into a corporate HQ is not a good sign, Stay tuned....also Apple is minus Steve Jobs now, the perennially dissatisfied one. He pushed for new and better products. He may have been unbalanced, but in a way that was great for shareholders.

Complacency ahead? Why beat you brains out when you have $20 mil in the bank?

And right now there are literally dozens of hungry teams everywhere wanting to come up with the next big thing...are they at Apple?

Hans said...

Remember, what the sages where all saying, including my book Computers for Dummies, is that the future is software...

The Book of Jobs proved that to be wong...

The two books I want for Christmas:

Economics for Dummies &
Balancing a Budget for Dummies.

ronrasch said...

Apple technology is amazing. Nevertheless,many companies innovating in specialty areas that put out value added products that can be put together under the high prices Apple products command will capture the largest and fastest growing foreign markets. Consumers in these markets can not afford Apple's prices said...
This comment has been removed by the author. said...

Benjamin, I agree with the corporate swank HDQ indicator.

Best to put your facility in an innocuous i/w location, and bank the rest.

Notice Warren Buffett has a few thousand square feet in a C grade office building in Omaha.

And Berkshire's market cap just keeps plodding ever higher.

Hans said...
This comment has been removed by the author.