MacDailyNews Take: What Steve Jobs has accomplished is breathtaking. He just might be the greatest CEO ever.
Hough continues, “That is surely one of the most dramatic corporate turnarounds in history. Cupertino, Calif.-based Apple wasn’t quite near bankruptcy, as is sometimes said, when Steve Jobs returned 13 years ago as its chief executive and a $150 million investment by Microsoft provided the company with fresh operating cash. But its future was much in doubt.”
MacDailyNews Take: Okay, this again. We’ve heard it all, right on up to “Microsoft bought Apple.” Here are the facts: That $150 million investment in non-voting shares was a show of faith, symbolic in nature. Apple didn’t need that cash, Apple had $1.2 billion in cash on-hand at the time. The deal also including a commitment by Microsoft to continue producing Office for the Mac for a period of five years (which they still do, and quite profitably, too) and the settlement of a long-standing dispute over whether Microsoft’s Windows operating system infringed on any of Apple’s patents, along with a broad patent cross-licensing agreement. As part of the deal, Apple also agreed to make Microsoft’s Internet Explorer the default browser for the Macintosh platform – gack!
Hough continues, “‘I’d shut it down and give the money back to the shareholders,’ said Michael Dell in 1997 to an audience of several thousand information technology managers. Today, the computer maker that bears Dell’s name ranks No. 78 among U.S. companies by stock market value. Roughly speaking, Apple is worth eight Dells.”
MacDailyNews Take: And, the All-Time Foot-In-Mouth Award (ATFIMA) goes to… Michael Dell!
Hough continues, “To some, Apple shares look too expensive. But not to Wall Street’s prognosticators. According to a Thomson poll, 37 of 43 analysts who publish recommendations on the stock currently advise investors to buy. Among those fans are 15 who strongly recommend a purchase.”
“Previous No. 1 companies were vital to making America’s mainframes whir, its telephones ring, its cars rumble and its sea of home and business computers speak a common language,” Hough writes. “On the other hand, Apple makes it a little easier and a lot cooler to browse the Internet, manage media and make telephone calls. The marvel isn’t just that a computer maker that rivals had counted out is now nearly the largest company in the land. It’s that it became so by selling indulgences rather than needs.”
Full article here.
MacDailyNews Take: Life is short and people who realize that feel they deserve the best. Why settle for frustration when you can have a superior experience that more than repays the difference in the long run? That’s not so much of an indulgence as it is a product of critical thinking and practicality. People who think for more than a second understand that Macs are unbelievable deals.
[Thanks to MacDailyNews Reader “JES42” for the heads up.]
I suppose “largest” company isn’t quite right. Lots of high-volume money losers are much bigger (in terms of employees, revenue, etc.) But largest market cap is the most important measure of all.
Market cap is the value of the whole company. It takes into account today’s profit and the company’s ability to grow their business while maintaining or even improving their profitability.
For example, Walmart brings in a lot more revenue, but gets to only keep a tiny bit of it (re-selling products is a high-cost, low-margin business). Microsoft makes a larger profit than Apple, but has no real prospects for growing their business.
All things considered, investors have placed a high value on Apple.
@LeftCoastDude – get that hemorrhoid taken care of!
Yeesh. What crude, hateful times we live in!
@ daugav369pils
LeftCoastDoofus is like that cos he’s American. Duh!
MDN is cheerful at the thought of Apple’s size by market cap but that isn’t a meaningful measure of worth. Even the criteria applied by the Dow are out of date although they take many factors into account. Apple makes stuff. Exxon takes a natural resource, refines it and sells it at a huge profit. Microsoft got to #2 by theft of IP at the right time to exploit the explosion in desktop computing.
The truly great thing about Apple, imo, is that it has reached such lofty levels of market cap AND genuine underlying value while still being a minority player in most of its markets. That is a factor that few take into account or comment on. If it has this value with such a small market share, imagine the growth potential. If its mobile devices are defining the future of mass computing (which excludes people needing powerful computers), it will likely dominate computing as the PC era begins to fade, as it is doing now.
What this means is that it’s 2010 share price will be $300+ and by 2020, it could reach $1,000, based on the current stock numbers; of course there will be a few splits along the way. If $1000 per current share sounds ridiculous, consider that they have no current involvement in Search, in Social networks or in Home entertainment. I believe that they will be involved in all three by 2015 and strongly so by 2020.
Check out Jason Schwarz’s writings on Apple on Seeking Alpha and extrapolate from there factoring in new products and new markets too.
err …’its’ 2010 share price
and by ‘current stock numbers’ I mean the number of shares available to the open market.
Last year apple launched iphone which were big hit in the market .Ever since apple graph going up in the market and that thing will make apple America’s biggest company.
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I too would give up my car before my iPhone I am the least materlistic person I know I don’t care for fancy things and indulgence but for one thing to provide so much information, entertainment, social networking, etc nothing comes close it never leaves my hand and as far as I am concerned it never will! It makes me a smarter more well informed person it let’s me keep in touch with everyone I have ever met I can play any song ever played read any newspaper in the world let’s face it this little device is the almost as close to perfection than is possable. Thank god for steve jobs and his idea of the future of media delivery and information storage, this is a great man who gave us a great device. Bill gates gives his money steve jobs gives us a bright future!!!!