10layers.com asks, “We are not talking about an Arthur C. Clark space odyssey, but could it be that Apple has a shot at outgrowing Microsoft within the next 5 years?”
“Both Microsoft and Apple have seen healthy revenue growth in the last 5 years. Microsoft’s revenues have grown approximately 60% from just under $30B in 2002 to over $44B in 2006. However, while Microsoft has grown linearly for this period, Apple has accelerated with revenues of just under $6B in 2002 growing to just under $21B in 2006. An impressive 250% revenue growth! In other words, Apple has been growing much faster than Microsoft,” 10layers writes.
10layers displays an extrapolation graph that shows “Apple could catch up with Microsoft as early as 2010 or 2011, given the current growth rates,” 10layers writes. “Of course, an extrapolation is just an attempt at predicting the future based on the past. Caveat emptor etc. It is clear however, that it is likely that Apple will give Microsoft a run for their money.”
Full article with graphs here.
[Thanks to MacDailyNews Reader “LinuxGuy and Mac Prodigal Son” for the heads up.]
Related article:
Apple CEO Steve Jobs’ ultimate goal: ‘to take back the computer business from Microsoft’ – June 16, 2005
It will NOT take that long, Apple is only warming up!
” width=”19″ height=”19″ alt=”grin” style=”border:0;” />
Mmmmm, now that would be sweet indeed!
I agree. When Apple gains marketshare it is away from Microsoft.
http://www.roughlydrafted.com/RD/RDM.Tech.Q1.07/50755EA6-A759-42FD-84ED-EBB5A060AF16.html
by the end of next year it will be all over for microsoft. It has already begun
Dave, I’m scared.
If MS pancakes with it’s release of Vista then we will see chunks of market share, If not then Leopard if going to have to fight for every inch.
Microsoft sold more X-Boxes last year than Apple sold Macintosh computers, domestic & global.
Poppy,
While I agree that Microsoft’s decline has begun, it’s going to take far more than a year. My prediction is MS losing about 30% of their market share over the next five years. The Mac will pick up most of the desktop/laptop business, and the server business will go to Linux and Solaris.
-jcr
And Apple made a profit on those computers unlike MS on those Xboxes.
This comparison is stupid. Microsoft is primarily a software company, whereas Apple derives the vast majority of its revenue from hardware (computers + consumer electronics).
If and when the product mixes and revenue sources of the two companies start becoming comparable, then (and only then) would such comparisons be meaningful.
Let’s not get carried away folks. For this dream to come true 3 things need to happen:
1. Apple has to stay at the top of its game for the next 10yrs. Possible but there is a limit to how many rabbits Steve & Co can pull out of their hat. 2. M$ has to totally blow the battle for the digital living room. Yeah Ballmer is the Coyote to Apple’s Roadrunner but they won’t keep screwing up this badly and consistantly. And there is a chance their successor to Vista might actually be a 21st century OS. 3. Apple has to make some inroads into the business market.
“Microsoft sold more X-Boxes last year than Apple sold Macintosh computers, domestic & global.”
Yeah right! Don’t forget : the more Xboxes they sell the poorer they get…
Microsoft sold more X-Boxes last year than Apple sold Macintosh computers, domestic & global
Perspective
Yes, if only sales of money-losing Xboxs would spike, Apple might be able to catch them by 2009!
Let’s see. Last quarter our profit was $1 billion. Microsoft’s was $2 billion.
I don’t see a problem with matching them for profitability, without having to increase gross revenues to match.
Ballmer is a bozo.
S.
Even though I’m an Apple fan, this straight-line projection is dumb and the author doesn’t even do a superficial analysis. If we went back to the mid-90s, a straight-line projection would’ve put the then beleaguered Apple in bankruptcy.
Both companies face threats to their core businesses. The question is how well will each execute to triumph over these threats, and/or create businesses in new market space.
Windows, Office, and Mac OS face threats from the Web, with Windows more so because it has greater market share. Vista, Live, and MSN don’t look like good answers yet, altho MS business products seem to be evolving faster enough to fend off the threat on the business side. .Mac has so far been poor, though iTunes has been dominant and expanding. We’ll know soon what’s coming in Leopard.
Windows faces a serious threat from malware (from which the Mac OS is currently benefiting). Again, Vista doesn’t seem to be the answer.
The iPod faces growth barriers from cheap (subsidized) music phones in other parts of the world. The iPhone is the beginning of an answer but it has yet to ship.
So yes, Apple may earn more by 2010 but the odds of the revenue chart looking like his is just about nil.
I love the chair graphic. As an Apple fan and a stockholder, hope it does come true.
Peace.
Far more interesting is that today analyst Charlie Wolf at Needham & Company reiterated his Buy rating on AAPL, and increased his price target from $115 up to $135.
This is based on iPhone revenues, which Wolf expects to be low at first due to the high selling price, but expects that selling price to fall ~20% year-on-year as component prices drop and carrier subsidies increase.
AAPL is trading at $86.06 in pre-market currently, up $0.68 from yesterday’s close.
Maybe Apple could offer the equivalent of Microsoft certification at a greatly reduced or subsidized price.
IT guys take this certification because it is all but required for them to get gigs at large corporations and institutions.
But, my guess is that if Apple makes certification on OS X server courses easy to register for and cheap to take, some IT people would take the training to differentiate themselves in the job market. More exposure of professional IT guys to OSX may result in more corporate sales, and an increase of that market.
MoMo Trader, isn’t it funny how Microsoft is a software Co. That makes terrible software. Thak god the legions of Walmart shopping America and job fearing IT guy’s wont ever experience great Software form a “HardWare” Co.
MoMo Trader,
The comparison is quite justified.
Both companies produce software and hardware in the computer/electronics industry.
But, more importantly, both companies have been SEEN as traditional rivals, so it’s quite natural to compare them – and indeed they have always been compared.
To top it all, the USERS of both companies’ respective products are often rivals – particularly those on Apple’s side, who are consistently and openly hostile to MS, or haven’t you noticed?
marko, you’re thinking as a product consumer rather than a financial analyst.
Sure, as product consumers, it is apparent that Microsoft software quality is well behind Apple’s.
But look at the revenue that Apple makes from software: it’s a teeny tiny percentage of Apple’s hardware revenue.
Similarly, Microsoft makes hardware products too (computer mice, Xbox, etc), but the vast majority of its revenue comes from selling software.
I think a better Arthur C. Clark reference would be “Childhood’s End”.
Daisy… Daisy.. give me your answer do…
Toby Belch, again you can compare Apple and Microsoft as “rivals” and cite the outspokenness of their users. But that doesn’t fly when you look at the cold, hard numbers of the income statement and balance sheet of the two companies.
Don’t take my word for it.
Standard & Poor’s describes Microsoft as “the world’s largest software maker”, which dominates in the “operating systems” and “packaged software” markets.
Standard & Poor’s describes [url=”http://outlook.standardandpoors.com/NASApp/NetAdvantage/cp/companyOverView.do?TICKER=AAPL
“]Apple[/url] as “a relatively small share of the more than $200 billion market for PCs” – i.e. hardware – and as “dominated” the “rapidly growing MP3 player market” – i.e. hardware again.
Again, to a financial analyst, until and unless the product mix and revenue sources are comparable, the total revenue numbers do not make for a meaningful comparison.
“Let’s see. Last quarter our profit was $1 billion. Microsoft’s was $2 billion.
“
Yes, and NEXT quarter MS has forecast profit of $4 billion once Vista starts shipping. Somehow I don’t think Apple will be making $2 billion next quarter. They will be lucky to hit $600 million in a non-holliday quarter.
It is fine to be a fan of Apple, but people here really need to get a grip an accept the fact that Apple has a long way to go before they are ahead of Microsoft on a financial basis.
For persepective: Gates/Allen/Ballmer are collectively worth more ($88 Billion) than the GDPs of 3/4ths of world’s countires. They would be just ahead of Egypt on the list.