if you wanted to buy the entire company it would
cost you about $240 billion.
To put that in context, for the same amount of money
you could own Newmont Mining Corp. (NYSE: NEM - News),
the world's largest gold-mining company,
And E.I. Du Pont de Nemours & Co. And Kellogg Co.,
And Shrek studio DreamWorks Animation SKG Inc,
And H&R Block Inc. (NYSE: HRB - News),
And The New York Times Co. And Molson Coors Brewing,
And the Estee Lauder Cos Inc. And Tiffany & Co.,
the Hershey Co., Harley-Davidson Inc., Expedia Inc.,
Abercrombie & Fitch Co., American Eagle Outfitters,
Burger King Holdings Inc., CBS Corp., Chipotle
Mexican Grill Inc., Whole Foods Market Inc.,
Starbucks Corp., Netflix Inc., JetBlue Airways Corp.,
NStar, and Dr Pepper Snapple Group Inc.
[Edited to add list of names that didn't make my original cut and paste.]
1. Apple is in software business where it has championed the model of fixed engineering cost and variable revenue streams.
2. They execute well and their products are neat. (That is a understatement)
3. They are market makers. There products are not just stealing customers but also creating new customer base for these products
4. Their marketing model is un-parrelled. And no-one in industry has any chance to replicate that in near future
Compare that to other companies. Most of them are not innovative but profitable because they are big, have low cost products. Some are in utility/F&B domain where its tough to increase the price. And others don't have much competative advantage.
Software is still the most profitable business (by a big margin), if done right. Apple is just demonstrating that.
If Apple can avoid any anti-trust suits, I think they have clear sailing for the next 2 to 3 years. I dislike Apple, but I LOVE my iPhone (but only compared to everything else).
With $40 billion in the bank, Apple could buy, in cash, today, all of the following:
- New York Times (1.4 billion)
- Jet Blue (1.6)
- Burger King (2.8)
- Dreamworks (3.4)
- Abercrombie and Fitch (3.9)
- NStar (3.9)
- Chipotle (4.2)
- Netflix (5.1)
- H&R Block (6)
- Whole Foods (6.8)
- they can buy Dupont by November.
- they can buy CBS by June 2011
- they can buy Hershey by April 2012
- they can buy Estee Lauder by April 2013
- they can buy Starbucks by November 2014
- etc. Kellogs and Newmont would take about twenty months each.
And naturally, this is all based on what they are doing today. If you put your money into the stock, you're assuming they are going to do at least as well. But even if they don't, that's still a lot of money the company is generating.
Not saying that Apple's valuation is correct, but there is a certain attraction to the company: it sells premium, high-margin products that have proven their ability to withstand general economic malaise, are non-commoditized, not easily substitutable goods, and have few realistic competitors (the MacBook Pro sits almost unchallenged in the premium laptop market, the iPhone is - for now - at the top of the smartphone game, etc).
The writer puts it as "Would you rather own Apple or [long list of companies]?" That's a little misleading, because any of those companies could be overvalued or undervalued by the market, and because betting all your money on one company is almost always less attractive than spreading your risk over a dozen different ones.
It would be interesting to see how Apple matched up.
Why? Just ask Jason Chen - the editor at tech blog Gizmodo who got his hands on the next iPhone. Apple's response? They sent in the police, who smashed down Chen's front door, ransacked his house -- while he was out -- and carted off computers and files. When Chen returned home from dinner with his wife, they frisked him too."
This is the kind of argument they are making to support the point????
This, like much of the article, is complete hyperbole (unless you actually believe Apple controls the police force).
That said, Apple has been a litigious, heavy-handed company for it's entire history so their actions aren't surprising.
I can't help but remember the article posted yesterday IIRC which made the point: Why are we worried about Apple? Isn't it Wall Street that truly has the power to make everything get fubar'ed?
These articles just tire me...
...as someone who was using OS9 when Apple had a death watch on it there's a certain amount of schadenfreude, mixed with wonder, at this situation of Apple as the 800lb gorilla. I get a giant kick out of the whole thing. :-)
That is all.
Unfortunately it looks like they are at least as bad as microsoft ever was and that the gospel according to Jobs is not that far removed from the gospel according to Gates. The one thing they've got going for them is that stuff appears to look better and works better, otherwise the new boss is the same as the old boss.
Gotta say, this makes a big difference!
AAPL - 1.3% (http://finance.yahoo.com/q/ks?s=AAPL+Key+Statistics)
MSFT - 0.7% (http://finance.yahoo.com/q/ks?s=msft+Key+Statistics)
GOOG - 1.4% (http://finance.yahoo.com/q/ks?s=goog+Key+Statistics)
Short selling might be used for technical reasons. For instance, an option trader might sell put options and at the same time sell the stock short for hedging. If the stock price goes down he loses money on the options but gains when he covers the short sell. That is, he might be betting on variables other than the stock price.
For the iPhone, the competition is now fierce: Android, BlackBerry, Palm, Windows mobile and Nokia! Nokia is already a major player, they won't let Apple take the market easily and cheaply. They'll do marketing, new phones and crazy things to preserve their position.
That said, as competition is getting though, Apple has got to spend more on marketing and improving their products (taking down their profit, even if their sales are up, because they are spending more). Only if they dominate the market, then your investment will pay back.
My advice is: don't get in this stock. It's very risky; unless you believe that the iPhone and iPad will become standards ;)
The only way that can happen is if OS X can be licensed to third-party computer manufacturers.
Most computer users just browse the net or read/write documents and spreadsheets. Why would they want an overpriced Mac for doing that?
That's partly the reason why I once thought that Linux will overtake the market, because of its price. But apparently there are other forces that keep Windows dominating, like familiarity and compatibility with existing apps (your free or shiny OS doesn't mean shit if I can't run my apps on it).
> 'Mac is back' by Paul Graham
I'm pretty sure Paul Graham got disappointing with Apple by now. Read "Apple's mistake".
Why in the world would you substitute a control freak for another (even worse in some cases) control freak?
Have you seen how much market share Palm, Microsoft and Nokia have lost to RIM and Apple over the last three years?!
It'd probably need some type of rfid, and the merchant some type of biometric, otherwise if someone saw the watch, they might be tempted to steal.
A friend of mine is doing this, but on a card, not a watch:
They'll be going live within the next couple of months, keep an eye out for something called the real X card.
That could be a game changer, though I don't see the profit from iAds matching that of mac/iPhone/iPad/app sales.
Ugh, are we going to see iAds in addition to Google ads while browsing the web?
As for seeing iAds elsewhere - perhaps, but it seems unlikely. Still, Apple's take on ads is that they want to make ads people like. The example he demonstrated, the Toy Story 3 ad, is something I can honestly see myself playing around with for a while. It's entertaining, it's involving. It's not going to be boring, garish text ads like Google ads, uglying up the page.
There's something to be said for the idea of adding taste and style back into online advertising.
Apple could pay, today and in cash, over 13% of Greece's debt.
Apple - 21.72
Google - 23.10
Microsoft - 15.44
This is despite the fact that Apple isn't even especially dominant in any area, not to the same degree that Microsoft, Google, or Amazon are dominant.
I was just reading this today (it's not fresh, I just got around to read it finaly): http://www.pragmaticmarketing.com/publications/magazine/6/4/...
Also, the perception of Apple as being exceptional and unique is greatly aided by the generally dysfunctional state of the entire industry in general.
There's the phones with the great cameras (but are underpowered). There's the phones with the great cpus (but wasted because of low ram) There's the phones with the good extra UI (wasted because they're underpowered) There's the good middle ground handicapped by a really old version of Android and no multi-touch.
Etc.
Whereas the iPhone just has it all.
I almost expected them to release the iPhone shuffle that had no screen and randomly called people.