“I’m still digesting the news that Apple’s market cap has exceeded Dell’s. Given that Dell was for darn near twenty years the PC company doing all the exceeding from a stock market perspective, this is clearly an occasion worth thinking about (for that matter, it’s also pretty shocking that HP now trades at a higher P/E ratio than almighty IBM, but I’ll think on that over at the Tech Beat blog some time),” Peter Burrows writes for BusinessWeek. “So what does Apple’s market cap ascension mean?”
Burrows writes, “As I listened to the Apple call with Wall Street analysts the other day, I kept thinking it comes down to one thing: runway. For me, that’s the metaphor that best describes the difference between the firms. Apple is roaring down its runway at a blazing clip, yet it’s got miles ahead of it to grow just by pursuing its current plan and exploiting its current capabilities. But Dell, which has been the poster child for this kind of analysis since George Bush Sr. was prez, is suddenly looking like it’s running out of room.”
“Suddenly, Apple seems to have bumped Dell out of its traditional role as ‘company-most-likely-to-gain-boatloads-of-share.’ OK, no one is talking about Apple zooming from its current 3.3% of the world market to double digits anytime soon. But every point of the $250 billion PC industry is worth $2.5 billion. So if Apple gains a point of market share this year–not a pipe dream by any means, especially given the Intel transition–Jobs & Co. will have already found the fuel for that 15% revenue growth year. And that’s without any iPod sales growth,” Burrows writes. “I’m not saying Apple’s shares aren’t overheated. They may well be. But while Apple’s smallness was formerly a life-threatening problem, it suddenly seems like a big advantage. I guess that’s just how the math works these days, when Steve Jobs’ reality distortion field seems to have morphed into something else: reality.”
Full article here.
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MacDailyNews Note: For the moment, Dell is worth more than Apple, $70.5 billion to $64.1 billion respectively.
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