“Not that long ago, anyone suggesting that Apple might some day be as large as — or even larger than — Microsoft would have been laughed out of the room,” Mathew Ingram reports for The Globe and Mail.
Ingram reports, “In 2004, Apple had somewhere around 2 percent of the computer market, and annual revenue of slightly more than $8-billion (U.S.). Its stock market value was roughly equal to its sales, at about $9-billion or so. Microsoft, by comparison, had revenue of $37-billion, almost five times larger than Apple’s, and a market value 30 times higher, at about $275-billion.”
“The past few years have shown, however, that the best company — and by far the best investment — has been Apple. Its shares have climbed more than 700 per cent to the $83 level, and its sales have soared 150 per cent to about $21-billion. Microsoft’s sales are now only twice as large (although its stock market value is still substantially larger),” Ingram reports. “A financial blog called 10Layers.com caused a stir recently by suggesting that if current trends continue, Apple could actually surpass Microsoft in terms of sales within the next five years, hitting the $65-billion revenue mark (according to one forecast) in 2010 or 2011.”
Ingram reports, “So is it possible that Apple’s sales will eclipse Microsoft’s by 2010? It’s not as outlandish as it sounds. In order to do so, Apple would have to grow by 25 to 30 per cent a year, which is not unheard of (of course, it’s also possible that Microsoft’s revenue could decline over that period). However, the list of $20-billion companies that can grow at 30 per cent or more — and do so every year for five years — is so short as to be almost non-existent.”
MacDailyNews Take: The reason the list is so short is because other companies don’t have iPhones due to launch, multi-touch widescreen iPods (rumor, for now, wink, wink), a personal computer business growing at three times the industry rate and taking share from Microsoft Windows, Mac OS X – the world’s most advanced operating system with an even more advanced version (Leopard) coming very soon, an online media store that dominates the market, a CEO like Steve Jobs, a growing and very profitable network of higly-trafficked retail stores, etc. Many seem to vastly underestimate the Mac. Those who do are in for a huge surprise.
Ingram continues, “Microsoft’s sales may only be twice Apple’s now, but its market value is about four times as high — close to $300-billion versus $72-billion. The main reason for that is that Microsoft’s profit is much higher. In 2006, it was more than six times that of Apple’s.”
MacDailyNews Note: Actual current market values: Microsoft – $288.7 billion, Apple – $73.5 billion.
“A great example of the disparity between sales and market value is to compare Wal-Mart and Microsoft: At about $380-billion, the retailer’s sales are 10 times higher than the software company’s, and yet Wal-Mart’s market value is substantially lower than Microsoft’s, at only $200-billion,” Ingram reports. “Market value aside, however, there is no doubt that Apple currently seems to have all the momentum — in a corporate sense, at least — while Microsoft has increasingly little.”
Full article here.
Apple larger than Microsoft by 2010? – January 29, 2007
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Gartner: Apple’s U.S. Mac shipments up 30.6% year over year – January 18, 2007
Net Applications: Apple’s Mac market share continues rise, now at 5.39%, up 31% year-over-year – December 01, 2006
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Analyst: Apple has ‘real shot at dramatically expanding Macintosh market share’ – October 31, 2006
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IDC: Apple Mac attained 5.8% of U.S. market share in Q3 06 – October 18, 2006
Gartner: Apple Mac grabbed 6.1% of U.S. market share in Q3 06 – October 18, 2006