Hedge fund manager Cody Willard: ‘Apple could become more valuable than Microsoft sometime in 2007’

Cody Willard is the manager of a hedge fund and the author of the Telecom Connection, an investment newsletter. He is also a headliner on TheStreet.com, writes for Razor Magazine, VON Magazine and the Financial Times, is a frequent featured guest on CNBC and has been quoted in many publications, including the New York Post and the Hollywood Reporter.

Willard writes for TheStreet.com, “with Apple having blown by Oracle in market cap already, I wonder how much longer before it catches Cisco. Then Intel. Then Microsoft? Let me go ahead and be the one to throw it out there first: I wouldn’t be shocked to see Apple more valuable than Microsoft sometime in 2007. What a mind-blowing thing to think to ponder.”

“Apple’s market cap has gone from $6 billion to $60 billion in the past two and a half years. Can it keep running? If the company delivers the growth it looks like it will: heck yes it can keep running. I’m sticking with it, although I have trimmed the exposure in the past few weeks, as I’ve noted on the site.”

Full article (subscription required) here.

[Thanks to MacDailyNews reader “jalex” for the heads up.]

MacDailyNews Note: Apple’s market value is currently $59,888,758,930, thanks to recent profit-taking. Dell’s, for one example we’re keeping a very close eye on in relation to Apple for obvious reasons, is currently $78,182,273,298. Microsoft’s current market value stands at $287,850,410,220.

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  1. As an investor, I’d like to PRESSURE Apple to _use_ some of that market capitalization and $10 per share in cash and invest it in either expanding R&D, purchasing manufacturing facilities, or making acquisitions that strengthem market position and/or open new markets for Apple.

    I would prefer Apple had some debt. It would be a tax benefit to write down the interest and mean that earnings were going into growing the company! Perhaps that will come in 2006.

  2. When Steve Jobs came back to Apple it was worth more dead than alive. It was in debt and was bleeding red ink. The college dropout that was run out of town by former PepsiCo CEO John Sculley (84-85) came back with the purchase of NeXT and has turned the company around through the 2000 recession, the bursting of the tech bubble and the post 9-11 economic funk.

    During this time Apple has launched OS X (Rhapsody-10.4x), the iLife suite, iTMS, the Final Cut Suite, purchased eMagic (Logic), .Mac, the iPod, the iMac, iBook, the Mac mini, launched the Safari browser ( with help from KDE), launched the xCode Developer tools, the G5 line, and is now starting the transition to x86 CPUs. That’s not a complete list. He has also launched the Apple Retail Chain and completely overhauled their production side, going from a high-cost to a low-cost producer of computers.

    The PowerSchool and FileMaker subsidiaries are also doing great things and are moving forward. Not bad. Not bad at all.

    Hell of a resume, don’t you think.

  3. The coming war is not going to occur in 2006, but in 2007-2010. Vista adoption by XP users and the continued swell of new Mac users giving up on M$ for their home use will put serious pressure on M$ as this war goes on.

    If you look at the history of MS Windows (95-XP), the adoption rate by up-graders has decreased over each successive version. This is where Apple has had the advantage. They have seen an increase with each successive version of OS X in the adoption rate by up-graders.

    In the consumer home user space, a user is very unlikely to upgrade the OS if there is no perceived benefit of doing so.

    Apple has managed to do so by creating a perceived benefit for laying out the money.

    On the Windows side it would be interesting to see if customers are more likely to upgrade the OS by purchasing a copy (not pirating) or buying a whole new machine instead.

    I am specifically talking about the home user here for large institutions tend to have institution wide agreements with MS and exist in a dynamic that is quite different than the home user.

  4. that is a heck of a resume…

    and do we need to remind what the “genius” CEO said what he would do with apple?

    His mindset may make good clones and marketing them well but dell will never innovate… (just like a certain redmond based co. we all know.)

  5. me wrote:

    As an investor, I’d like to PRESSURE Apple to _use_ some of that market capitalization and $10 per share in cash and invest it in either expanding R&D, purchasing manufacturing facilities, or making acquisitions that strengthen market position

    I respond:

    Just this month, Apple did strengthen their market position by spending 1.5 B to partner with various flash chip OEM’s to lock up supplies through 2008 at great prices.

    This will prevent the copycats from securing cheap flash memory and therefore make them unable to compete with apple by selling their me-too products cheaper than Apple. Many pundits feel that iPod competitors must sell cheaper than Apple to make market advances.

    Apple has effectively cut them off from that route, meaning they can only compete at higher prices (the Creative M) on interoperability, interface, and ease of use. And really, who can beat Apple at that game? I’d say it’s a pretty judicious use of cash on the part of Jobs and co.

    And, who knows what else, beyond iPods, the deep thinkers at Apple have planned for all those flash chips? For what other products might they want to get a two year head start on those competitors who ride the coattails of Apple design?

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