9 ms·

Microsoft Pulling Even with Apple in Ranks of Biggest Companies

70 points by chollida1 8y ago

onetimemanytime 8y ago
MSFT is more predictable to me as it has a lot more sources of revenue and looks like they are doing very well in cloud.
- partiallypro 8y ago
  I think this is the crux of why Apple trades at such a low P/E, sure they make tons of money, but their product line is very concentrated and not diverse at all. Microsoft has tons of product lines, and if one is suffering others usually do ok, or excel. Windows has struggled for the past decade or two, and what picked up the slack? Office 365 and Azure. I suspect when those cool off, Windows and devices will pick back up. Microsoft is built better to handle cyclicality. That's not to say Apple isn't a great company, or even a bad investment, but I do understand why Apple has fallen so sharply, and relatively speaking, Microsoft has had a marginal correction relative to its peers. If you assume we might head into a recession due to the trade war, Apple has never really had to go through that with their current high end product line. The iPhone was introduced in 2007 and was early cycle even during the financial collapse. It will be interesting to see if the business cycle greatly hurts their sales. I think that's what so many are worried about. Especially when we have their vendors cutting forecast (and yes there have been some crying wolf over the years, but eventually the wolf will show) and Apple being less transparent about unit sales. I suspect they will see a fall in sales when we do enter a recession, but I am encouraged that they have such control over their supply line that they won't get stuck with inventory gluts, like...uh Nvidia. I mean back a few years ago Microsoft had a massive write-off from hardware...and that's not even a fraction of their business, imagine if Apple had to write off a ton of hardware, it would be brutal. That seems unlikely though, as I said, they seem to have a good handle on their inventory.
- glenrivard 8y ago
  Think Google is safer. Plus just rolling out their robot self driving taxi service and already growing faster.
burtonator 8y ago
It's because they've been making some great decisions lately. I've been using Typescript in an Electron project I've been working on (https://getpolarized.io/ https://getpolarized.io/) which is a doc manager for PDF and web content. Typescript is awesome. It's basically Java 8/9 in terms of language design. Supports interfaces, generics, etc. If you add VS code and their github acquisition they're going to be in front of a lot of developers in the next 2-5 years.
- actuator 8y ago
  While I agree that Typescript, VSCode and Github might earn a lot of love from open source community. I can't see how they will be able to leverage this with their other products which make them money. These products work with other ecosystems just as well and I can't see Microsoft products benefiting from them. The only big positive is the change of perception this brings.
- draw_down 8y ago
  Dev ergonomics are great and all, but I kinda doubt that's where the bump in market cap is coming from.
- geodel 8y ago
  > If you add VS code and their github acquisition they're going to be in front of a lot of developers in the next 2-5 years. Lot of Javascript developers I think. There was a time when every Java application was supposed to be written in NodeJS. Thankfully, better sense prevailed.
- chrisco255 8y ago
  I mean, I love their tooling too, but the financial markets couldn't give a damn about VS Code or TypeScript. The GitHub acquisition is interesting, but as far as I know, GH was losing money on operations. I think Azure's growth, Office and Windows continued strength in the mobile era (despite predictions of the end of the PC), have more to do with MS's stock price than TypeScript.
  - RandallBrown 8y ago
grezql 8y ago
good, that will teach them not to remove HDMI from macbooks and adding stupid notches, dj touchbars and other crap. edit: not to mention 30% app store fee for developers.
- actuator 8y ago
  While I wish that would drive Apple to rethink some of the decisions with MBPs, it is because of iPhone as mentioned in the article.
  - grezql 8y ago
    don't worry. A year ago when people were complaining about iPhone prices all the quarterly reports said "everything is fine, Apple is on the way up". It just takes time before the effects of those horrible new macbook changes shows up on the financial reports.
- jamroom 8y ago
  MSFT charges 30% to developers as well: https://docs.microsoft.com/en-us/legal/windows/agreements/app-developer-agreement https://docs.microsoft.com/en-us/legal/windows/agreements/ap...
  - binarycrusader 8y ago
    Actually, what you linked states different amounts depending on application type and/or other conditions: The Store Fee is: i. Thirty percent (30%) of Net Receipts for: (a) all Apps and In-App Products made available in the Store and billed to Customers on a non-subscription basis, and (b) all Games (and In-App Products in Games). ii. Fifteen percent (15%) of Net Receipts for any Apps that are not Games (and any In-App Products in such Apps) that are billed to Customers on a subscription basis. See also this blog post: https://blogs.windows.com/buildingapps/2018/05/07/a-new-microsoft-store-revenue-share-is-coming/ https://blogs.windows.com/buildingapps/2018/05/07/a-new-micr...
    - graeme 8y ago
chadash 8y ago
As of 1:04 pm EST, looks like MSFT has a market cap of $807B compared to Apple's $812. If you look at their Q2 filing [1], their business has 3 main components: Productivity and Business Processes ($9.0B) - includes office, Microsoft Dynamics, LinkedIn Intelligent cloud ($7.8B) - includes server proudcts and azure Personal computing ($12.2) - includes Windows OEM revenue, xbox, search advertising, Surface It seems to me that Microsoft has a much more diversified set of products than Apple [2] with more resiliency in terms of revenue. The business world isn't migrating away from Excel any time soon. Their cloud business is growing strongly. And for the foreseeable future, Windows is the only OS for PCs outside of MacOS which is more of a luxury product (I love linux, but it just hasn't taken off for mainstream consumers). [1] https://www.microsoft.com/en-us/Investor/earnings/FY-2018-Q2/press-release-webcast https://www.microsoft.com/en-us/Investor/earnings/FY-2018-Q2... [2] about 2/3 of apple's revenue comes from the iPhone. See https://www.apple.com/newsroom/pdfs/Q2_FY18_Data_Summary.pdf https://www.apple.com/newsroom/pdfs/Q2_FY18_Data_Summary.pdf.
- mkirklions 8y ago
  My experience with an iphone had me convinced Apple=AOL. Less features, more expensive, and anti-consumer practices? This is the example of short term profits to drive up stock prices. Squeezing current users, spending limited money on improvements, and charging more money will work temporarily. That said, Nintendo has been doing this for a decade, and they somehow survive. Marketing might be more powerful than competition... EDIT: Due to HN whales(or apple marketing teams), Anti consumer practices- >Intentionally slowing down old OS >Proprietary connectors >Luxury pricing >Limited to App store and removal of apps >Limited hardware An argument could be made for 'safe apps', but the rest of that list is a hard 'No, that is bad for the user'.
  - Redoubts 8y ago
    > Marketing might be more powerful than competition... Or infinite choice and configuration is actually an anti-feature.
  - millstone 8y ago
    "Less features and more expensive" has been Apple's modus operandi for decades. So there's nothing short-term about that. I don't agree with "anti-consumer practices."
millstone 8y ago
Note that Microsoft's P/E of 43.6 is higher than Alphabet (40.7), Facebook (20.4), Apple (14.49) though of course lower than Amazon (87.3). This is presumably due to their incredible growth in Azure / cloud.
btilly 8y ago
I am a little shocked that the market hasn't woken up to the problems that Apple has. Consider all the people you know well. How many have switched from Android to OS X in the last 5 years? How many have switched from OS X to Android in the last 5 years? In my household, 2 switched to Android, 0 switched the other way. In my broader network I'm aware of several more switching to Android, none switching back. There is a good reason for that. An iPhone with equivalent specs to an Android costs 2x as much. The user experience isn't that much better. (Many people who switch say that the Apple experience was actually worse.) The cheapest phone that Apple wants to sell you is an XS for about $1000. You can get a top of the line Android for less than that - with specs that beat the best model that Apple has. So Apple is fighting a rearguard action - squeeze the most profit that it can out of a clientele that is slowly disappearing on them. In this world, they can't afford defects. So what happens? I personally have an iPhone X because my sister gave it to me as a present. This month the display became non-responsive (that's the bug that has Apple's stock falling). They fixed that after most of a week without a phone. I've now got it randomly deciding that Face ID no longer works, the volume randomly going between off and on, and it recharges when it feels like it wants to. I've got to wait most of a week for them to fix THAT as well. (Have you ever had your phone decide to dial its volume to 0 in the middle of a phone call or listening to a book on your commute? Yeah, it sucks just as much as you would guess.) In the meantime I'm looking at my wife's phone with a growing amount of envy. When Apple stops being willing to fix their phone under warranty, what do you think I'll replace it with?
- diogenescynic 8y ago
  >Consider all the people you know well. How many have switched from Android to OS X in the last 5 years? How many have switched from OS X to Android in the last 5 years? In my household, 2 switched to Android, 0 switched the other way. In my broader network I'm aware of several more switching to Android, none switching back. Anecdotes are worthless because one anecdote counters another. I don't know anyone who has converted from Apple to Android, but I know several who've left Android for Apple. However, since we're both only throwing out our anecdotal experience and not data, there's not much of a conclusion we can draw from it.
- stouset 8y ago
Animats 8y ago
This is Peak Phone. Everybody already has a mobile, and IPhone N+1 is only marginally better than IPhone N. It's like GM in the 1950s trying to get people to buy a new car every year. Then GM tried "more car per car", trying to get people to pay more per unit. There's no Next Big Thing in the near future, no "must-have" consumer product. 3D TV was a flop. VR goggles were a niche product. Cloud-connected surveillance ("speakers") and computer-controlled woks (big in Asia) are just not that big. Foxconn sees this and is cutting back.
- sitkack 8y ago
  The next big thing is quality. We have everything we need. What we need is quality air, food, water, time. Basically everything that capitalism has taken away in the last 50 years.
- jimmaswell 8y ago
  >There's no Next Big Thing in the near future How can you know this? Is there a precedent of knowing beforehand right before the "next big thing" is about to happen?
  - Animats 8y ago
    The Next Big Thing for volume production 3-5 years out has to be working now in some form. What's almost here? AR goggles? 10 years out, there could be something completely new. But there is lead time.
danielor 8y ago
I think this is mainly a question of momentum. Microsoft is benefiting from some good strategic decisions in recent past, and has a large number of legacy businesses that are quite profitable. Apple in the short term is too dependent on the iPhone, and it will take a few quarters to build a more robust product pipeline.
- nkkollaw 8y ago
  I think the more they build, the more they'll screw up. I've yet to see anything good coming out of Apple in the last few years. - force-touch touchpads are so useless than not even them use the technology to any meaningful extent - the Touchbar is completely useless, and anecdotally people stop using it after a few days - their new butterfly keyboards are a nightmare to type on (albeit that's definitely subjective), and stop functioning with dust particles, and they haven't even acknowledged the problem before being hit with 2 class actions - they've removed all useful ports from their laptops, and headphone jacks from their phones. What a shit show.
  - konschubert 8y ago
    It's weird. It really looks like Steve Jobs kept the vision clear and what we're seeing now are his people cargo-culting what they saw him do. I don't know much about Steve Jobs, but I imagine he cared more about making a great product than optimizing earnings. I also think he cared more about making a great product than about forced innovation And I think that's different now, and ironically that's one of the things holding the share price back.
    - nkkollaw 8y ago
      I'm very much against the myth of Steve Jobs--e.g. I'm completely aware that he wasn't him inventing everything like the media (and himself) often claim, but I think you're completely right. We would need an Apple insider to confirm, but it just seems like some changed that took away whatever it was that they could do when he was there. Apple with Steve Jobs was great, then it sucked when he was gone, then great again while he was there, and now it sucks again. It did so well in the past that it won't go bankrupt anytime soon, but the magic is definitely gone.
nkkollaw 8y ago
Microsoft is doing a much, much better job with hardware compared to Apple. Microsoft's Surface Book is absolutely stunning--although a little pricey for me--and unlike Apple's stuff it doesn't break after a month of normal use with people having to do class actions for them to acknowledge that there's even something wrong. On the other end, macOS is definitely better than Microsoft in pretty much every aspect (although that might be subjective). Me, I'm currently on a Surface Book "clone"--meaning a laptop that has the exact same Chinese, awesome 3000:2000 touch screen, running an hybrid of Xfce with Kwin and other components to make Linux look a little prettier.
- Joeri 8y ago
  Microsoft's Surface Book is absolutely stunning--although a little pricey for me--and unlike Apple's stuff it doesn't break after a month of normal use with people having to do class actions for them to acknowledge that there's even something wrong. The surface book is actually known to have thermal problems, and the surface pro 4 almost went to class action before microsoft organized a replacement program. http://www.classlawdc.com/2018/02/06/microsoft-surface-pro-4-class-action-investigation/ http://www.classlawdc.com/2018/02/06/microsoft-surface-pro-4... On the other end, macOS is definitely better than Microsoft in pretty much every aspect (although that might be subjective). As someone who hops between macOS and windows I'd have to disagree with that. Window management on laptops is way better on windows. There's no good way to cope with the dock on a small screen. It's difficult to resize windows (very small targets and no "dock to resize" feature) and the window behavior when maximized (fullscreen) is very clumsy. Also, macOS has no equivalent to the windows timeline.
dkrich 8y ago
Share prices expand when revenues look to be expanding. What the price action in MSFT and AAPL tells me is that the market sees MSFT as growing over the next few years (at least) and AAPL not growing much from where it is now. This story starts to make sense as you look at Apple's product portfolio. AAPL's cash cow is the iPhone. Yes they make tons of money on other products like laptops, tablets, and watches, but the lion's share of the revenue comes from iPhones. This has been the case for a long time, so why now has the stock pulled back? It's because now the ASP on the iPhone is likely topped out for a while, especially as the economy starts to slow down. So ASP is topped out, what about unit growth? If prices remain constant but units sold continues to go up, wouldn't that mean increased revenue? Yes, but that too seems to be stagnating according to the most recent earnings reports. And that's the story, IMO. Revenues on the most important products have seemingly topped out and probably won't increase significantly from here. That could of course change if for example lots of Android users unexpectedly flock to iPhones. There's no reason to believe this will happen, though. What about other lines of revenue? Services, for instance? Apple Music and video content are commodity businesses so likely won't see much revenue expansion from here. Wearables are probably the main bright spot. Let's not forget that the entire market for tech stocks is in the midst of a huge sell-off which is probably most to blame for Apple's decline. There is probably two-way influence here. Apple was basically rerated over the past year or two from a stable dividend generator to a growthier stock and is now being rerated back to stable dividend generator. I don't think Apple has any near-term competitive threats to its business so should bottom out sometime soon, but if the stock is to resume its uptrend it has to show significant growth in new areas.

70 points by chollida1 8y ago

MSFT is more predictable to me as it has a lot more sources of revenue and looks like they are doing very well in cloud.

partiallypro 8y ago
I think this is the crux of why Apple trades at such a low P/E, sure they make tons of money, but their product line is very concentrated and not diverse at all. Microsoft has tons of product lines, and if one is suffering others usually do ok, or excel. Windows has struggled for the past decade or two, and what picked up the slack? Office 365 and Azure. I suspect when those cool off, Windows and devices will pick back up. Microsoft is built better to handle cyclicality. That's not to say Apple isn't a great company, or even a bad investment, but I do understand why Apple has fallen so sharply, and relatively speaking, Microsoft has had a marginal correction relative to its peers. If you assume we might head into a recession due to the trade war, Apple has never really had to go through that with their current high end product line. The iPhone was introduced in 2007 and was early cycle even during the financial collapse. It will be interesting to see if the business cycle greatly hurts their sales. I think that's what so many are worried about. Especially when we have their vendors cutting forecast (and yes there have been some crying wolf over the years, but eventually the wolf will show) and Apple being less transparent about unit sales. I suspect they will see a fall in sales when we do enter a recession, but I am encouraged that they have such control over their supply line that they won't get stuck with inventory gluts, like...uh Nvidia. I mean back a few years ago Microsoft had a massive write-off from hardware...and that's not even a fraction of their business, imagine if Apple had to write off a ton of hardware, it would be brutal. That seems unlikely though, as I said, they seem to have a good handle on their inventory.
glenrivard 8y ago
Think Google is safer. Plus just rolling out their robot self driving taxi service and already growing faster.

burtonator 8y ago

It's because they've been making some great decisions lately. I've been using Typescript in an Electron project I've been working on (https://getpolarized.io/ https://getpolarized.io/) which is a doc manager for PDF and web content. Typescript is awesome. It's basically Java 8/9 in terms of language design. Supports interfaces, generics, etc. If you add VS code and their github acquisition they're going to be in front of a lot of developers in the next 2-5 years.

actuator 8y ago
While I agree that Typescript, VSCode and Github might earn a lot of love from open source community. I can't see how they will be able to leverage this with their other products which make them money. These products work with other ecosystems just as well and I can't see Microsoft products benefiting from them. The only big positive is the change of perception this brings.
draw_down 8y ago
Dev ergonomics are great and all, but I kinda doubt that's where the bump in market cap is coming from.
geodel 8y ago
> If you add VS code and their github acquisition they're going to be in front of a lot of developers in the next 2-5 years. Lot of Javascript developers I think. There was a time when every Java application was supposed to be written in NodeJS. Thankfully, better sense prevailed.
chrisco255 8y ago
I mean, I love their tooling too, but the financial markets couldn't give a damn about VS Code or TypeScript. The GitHub acquisition is interesting, but as far as I know, GH was losing money on operations. I think Azure's growth, Office and Windows continued strength in the mobile era (despite predictions of the end of the PC), have more to do with MS's stock price than TypeScript.
- RandallBrown 8y ago

grezql 8y ago

good, that will teach them not to remove HDMI from macbooks and adding stupid notches, dj touchbars and other crap. edit: not to mention 30% app store fee for developers.

actuator 8y ago
While I wish that would drive Apple to rethink some of the decisions with MBPs, it is because of iPhone as mentioned in the article.
- grezql 8y ago
  don't worry. A year ago when people were complaining about iPhone prices all the quarterly reports said "everything is fine, Apple is on the way up". It just takes time before the effects of those horrible new macbook changes shows up on the financial reports.
jamroom 8y ago
MSFT charges 30% to developers as well: https://docs.microsoft.com/en-us/legal/windows/agreements/app-developer-agreement https://docs.microsoft.com/en-us/legal/windows/agreements/ap...
- binarycrusader 8y ago
  Actually, what you linked states different amounts depending on application type and/or other conditions: The Store Fee is: i. Thirty percent (30%) of Net Receipts for: (a) all Apps and In-App Products made available in the Store and billed to Customers on a non-subscription basis, and (b) all Games (and In-App Products in Games). ii. Fifteen percent (15%) of Net Receipts for any Apps that are not Games (and any In-App Products in such Apps) that are billed to Customers on a subscription basis. See also this blog post: https://blogs.windows.com/buildingapps/2018/05/07/a-new-microsoft-store-revenue-share-is-coming/ https://blogs.windows.com/buildingapps/2018/05/07/a-new-micr...
  - graeme 8y ago

chadash 8y ago

As of 1:04 pm EST, looks like MSFT has a market cap of $807B compared to Apple's $812. If you look at their Q2 filing [1], their business has 3 main components: Productivity and Business Processes ($9.0B) - includes office, Microsoft Dynamics, LinkedIn Intelligent cloud ($7.8B) - includes server proudcts and azure Personal computing ($12.2) - includes Windows OEM revenue, xbox, search advertising, Surface It seems to me that Microsoft has a much more diversified set of products than Apple [2] with more resiliency in terms of revenue. The business world isn't migrating away from Excel any time soon. Their cloud business is growing strongly. And for the foreseeable future, Windows is the only OS for PCs outside of MacOS which is more of a luxury product (I love linux, but it just hasn't taken off for mainstream consumers). [1] https://www.microsoft.com/en-us/Investor/earnings/FY-2018-Q2/press-release-webcast https://www.microsoft.com/en-us/Investor/earnings/FY-2018-Q2... [2] about 2/3 of apple's revenue comes from the iPhone. See https://www.apple.com/newsroom/pdfs/Q2_FY18_Data_Summary.pdf https://www.apple.com/newsroom/pdfs/Q2_FY18_Data_Summary.pdf.

mkirklions 8y ago
My experience with an iphone had me convinced Apple=AOL. Less features, more expensive, and anti-consumer practices? This is the example of short term profits to drive up stock prices. Squeezing current users, spending limited money on improvements, and charging more money will work temporarily. That said, Nintendo has been doing this for a decade, and they somehow survive. Marketing might be more powerful than competition... EDIT: Due to HN whales(or apple marketing teams), Anti consumer practices- >Intentionally slowing down old OS >Proprietary connectors >Luxury pricing >Limited to App store and removal of apps >Limited hardware An argument could be made for 'safe apps', but the rest of that list is a hard 'No, that is bad for the user'.
- Redoubts 8y ago
  > Marketing might be more powerful than competition... Or infinite choice and configuration is actually an anti-feature.
- millstone 8y ago
  "Less features and more expensive" has been Apple's modus operandi for decades. So there's nothing short-term about that. I don't agree with "anti-consumer practices."

millstone 8y ago

Note that Microsoft's P/E of 43.6 is higher than Alphabet (40.7), Facebook (20.4), Apple (14.49) though of course lower than Amazon (87.3). This is presumably due to their incredible growth in Azure / cloud.

btilly 8y ago

I am a little shocked that the market hasn't woken up to the problems that Apple has. Consider all the people you know well. How many have switched from Android to OS X in the last 5 years? How many have switched from OS X to Android in the last 5 years? In my household, 2 switched to Android, 0 switched the other way. In my broader network I'm aware of several more switching to Android, none switching back. There is a good reason for that. An iPhone with equivalent specs to an Android costs 2x as much. The user experience isn't that much better. (Many people who switch say that the Apple experience was actually worse.) The cheapest phone that Apple wants to sell you is an XS for about $1000. You can get a top of the line Android for less than that - with specs that beat the best model that Apple has. So Apple is fighting a rearguard action - squeeze the most profit that it can out of a clientele that is slowly disappearing on them. In this world, they can't afford defects. So what happens? I personally have an iPhone X because my sister gave it to me as a present. This month the display became non-responsive (that's the bug that has Apple's stock falling). They fixed that after most of a week without a phone. I've now got it randomly deciding that Face ID no longer works, the volume randomly going between off and on, and it recharges when it feels like it wants to. I've got to wait most of a week for them to fix THAT as well. (Have you ever had your phone decide to dial its volume to 0 in the middle of a phone call or listening to a book on your commute? Yeah, it sucks just as much as you would guess.) In the meantime I'm looking at my wife's phone with a growing amount of envy. When Apple stops being willing to fix their phone under warranty, what do you think I'll replace it with?

diogenescynic 8y ago
>Consider all the people you know well. How many have switched from Android to OS X in the last 5 years? How many have switched from OS X to Android in the last 5 years? In my household, 2 switched to Android, 0 switched the other way. In my broader network I'm aware of several more switching to Android, none switching back. Anecdotes are worthless because one anecdote counters another. I don't know anyone who has converted from Apple to Android, but I know several who've left Android for Apple. However, since we're both only throwing out our anecdotal experience and not data, there's not much of a conclusion we can draw from it.
stouset 8y ago

Animats 8y ago

This is Peak Phone. Everybody already has a mobile, and IPhone N+1 is only marginally better than IPhone N. It's like GM in the 1950s trying to get people to buy a new car every year. Then GM tried "more car per car", trying to get people to pay more per unit. There's no Next Big Thing in the near future, no "must-have" consumer product. 3D TV was a flop. VR goggles were a niche product. Cloud-connected surveillance ("speakers") and computer-controlled woks (big in Asia) are just not that big. Foxconn sees this and is cutting back.

sitkack 8y ago
The next big thing is quality. We have everything we need. What we need is quality air, food, water, time. Basically everything that capitalism has taken away in the last 50 years.
jimmaswell 8y ago
>There's no Next Big Thing in the near future How can you know this? Is there a precedent of knowing beforehand right before the "next big thing" is about to happen?
- Animats 8y ago
  The Next Big Thing for volume production 3-5 years out has to be working now in some form. What's almost here? AR goggles? 10 years out, there could be something completely new. But there is lead time.

danielor 8y ago

I think this is mainly a question of momentum. Microsoft is benefiting from some good strategic decisions in recent past, and has a large number of legacy businesses that are quite profitable. Apple in the short term is too dependent on the iPhone, and it will take a few quarters to build a more robust product pipeline.

nkkollaw 8y ago
I think the more they build, the more they'll screw up. I've yet to see anything good coming out of Apple in the last few years. - force-touch touchpads are so useless than not even them use the technology to any meaningful extent - the Touchbar is completely useless, and anecdotally people stop using it after a few days - their new butterfly keyboards are a nightmare to type on (albeit that's definitely subjective), and stop functioning with dust particles, and they haven't even acknowledged the problem before being hit with 2 class actions - they've removed all useful ports from their laptops, and headphone jacks from their phones. What a shit show.
- konschubert 8y ago
  It's weird. It really looks like Steve Jobs kept the vision clear and what we're seeing now are his people cargo-culting what they saw him do. I don't know much about Steve Jobs, but I imagine he cared more about making a great product than optimizing earnings. I also think he cared more about making a great product than about forced innovation And I think that's different now, and ironically that's one of the things holding the share price back.
  - nkkollaw 8y ago
    I'm very much against the myth of Steve Jobs--e.g. I'm completely aware that he wasn't him inventing everything like the media (and himself) often claim, but I think you're completely right. We would need an Apple insider to confirm, but it just seems like some changed that took away whatever it was that they could do when he was there. Apple with Steve Jobs was great, then it sucked when he was gone, then great again while he was there, and now it sucks again. It did so well in the past that it won't go bankrupt anytime soon, but the magic is definitely gone.

nkkollaw 8y ago

Microsoft is doing a much, much better job with hardware compared to Apple. Microsoft's Surface Book is absolutely stunning--although a little pricey for me--and unlike Apple's stuff it doesn't break after a month of normal use with people having to do class actions for them to acknowledge that there's even something wrong. On the other end, macOS is definitely better than Microsoft in pretty much every aspect (although that might be subjective). Me, I'm currently on a Surface Book "clone"--meaning a laptop that has the exact same Chinese, awesome 3000:2000 touch screen, running an hybrid of Xfce with Kwin and other components to make Linux look a little prettier.

Joeri 8y ago
Microsoft's Surface Book is absolutely stunning--although a little pricey for me--and unlike Apple's stuff it doesn't break after a month of normal use with people having to do class actions for them to acknowledge that there's even something wrong. The surface book is actually known to have thermal problems, and the surface pro 4 almost went to class action before microsoft organized a replacement program. http://www.classlawdc.com/2018/02/06/microsoft-surface-pro-4-class-action-investigation/ http://www.classlawdc.com/2018/02/06/microsoft-surface-pro-4... On the other end, macOS is definitely better than Microsoft in pretty much every aspect (although that might be subjective). As someone who hops between macOS and windows I'd have to disagree with that. Window management on laptops is way better on windows. There's no good way to cope with the dock on a small screen. It's difficult to resize windows (very small targets and no "dock to resize" feature) and the window behavior when maximized (fullscreen) is very clumsy. Also, macOS has no equivalent to the windows timeline.

dkrich 8y ago

Share prices expand when revenues look to be expanding. What the price action in MSFT and AAPL tells me is that the market sees MSFT as growing over the next few years (at least) and AAPL not growing much from where it is now. This story starts to make sense as you look at Apple's product portfolio. AAPL's cash cow is the iPhone. Yes they make tons of money on other products like laptops, tablets, and watches, but the lion's share of the revenue comes from iPhones. This has been the case for a long time, so why now has the stock pulled back? It's because now the ASP on the iPhone is likely topped out for a while, especially as the economy starts to slow down. So ASP is topped out, what about unit growth? If prices remain constant but units sold continues to go up, wouldn't that mean increased revenue? Yes, but that too seems to be stagnating according to the most recent earnings reports. And that's the story, IMO. Revenues on the most important products have seemingly topped out and probably won't increase significantly from here. That could of course change if for example lots of Android users unexpectedly flock to iPhones. There's no reason to believe this will happen, though. What about other lines of revenue? Services, for instance? Apple Music and video content are commodity businesses so likely won't see much revenue expansion from here. Wearables are probably the main bright spot. Let's not forget that the entire market for tech stocks is in the midst of a huge sell-off which is probably most to blame for Apple's decline. There is probably two-way influence here. Apple was basically rerated over the past year or two from a stable dividend generator to a growthier stock and is now being rerated back to stable dividend generator. I don't think Apple has any near-term competitive threats to its business so should bottom out sometime soon, but if the stock is to resume its uptrend it has to show significant growth in new areas.