7 ms·

Apple now has more cash than Microsoft

62 points by ksvs 18y ago

josefresco 18y ago
MS had decent profits for a quarter that saw the slow selling Vista as their 'big thing' (while Apple has the 3G iPhone to sell). Windows 7 will improve on Vista's issues, I don't see MS losing it's place (on top) anytime soon. Also, why are we praising 'cash on hand', cash is only good when you use it.
- laut 18y ago
  Yeah, having cash is overrated. Give all of your cash to me ;) Seriously, Apple are raking it in. They have more cash because they make so much money every quarter. I think they should pay dividends though.
- gaius 18y ago
  Windows 7 might be a debacle that makes Vista look like the best thing since sliced bread. No-one knows yet.
  - antidaily 18y ago
    I'd agree except that its basically just an iteration of Vista that builds off of the newer kernel from service pack 1.
- thras 18y ago
  I don't believe that Windows 7 will really improve on Vista's issues. Mainly because the real problems with Vista are either imaginary (cf. Mojave) or completely out of Microsoft's control (third party applications, drivers). A fundamental problem with Vista was that switching operating systems is a pain and users don't like to do it. Further, Apple and Linux now have a lot of mind share among the technical trendsetters. For Apple and Linux users, it's not enough to like Apple or Linux, you have to hate Microsoft too. When Windows 7 comes along, the press will be exactly the same as it was for Vista: Why switch when your programs already work on the old OS? Why won't it run on X or Y type ancient hardware? Etc, etc. And the Apple and Linux fans will make Windows 7 into exactly the same sort of dirty word that Vista is. Joe Average computer user doesn't choose his next OS based on what he likes, he does it based on what he hears, and that won't be anything good.
  - unalone 18y ago
    Mainly because the real problems with Vista are either imaginary (cf. Mojave) This is a bullshit argument, and I'd really love people to stop using it. Mojave showed that people using Vista for short amounts of time in factory-approve conditions will think that it's "pretty neat." But Vista's always had the "neat" factor about it. Never as much as OS X, but then, not many people get a computer based on "neat" factor, despite what fanboys on both sides say about each other's products. Where Vista sours is when you use it for a while and notice the little things. Of course, the security windows - even though you can disable them, that's the iconic one for Vista. I've had that security window crash my old computer, too: if your computer is running a lot of stuff, that window sometimes tips the entire thing over. The little things bottle up. They build up and tip out. I just came across a post yesterday on Tumblr that mentioned one: I'd never actively thought about this feature, I wouldn't have ever thought to diss Vista for it after I got my Mac, but remembering it, it was awful in a small way. http://tumblelog.marco.org/56149922 http://tumblelog.marco.org/56149922 And when you've only used Windows, stuff like this is acceptable. It's commonplace. There is no alternative. But when you use any other OS, you realize that a lot of things are done much better. Linux has its own problems, namely drivers, but that was enough to make me hate Windows in no time at all. OS X is even worse for that, because it's better on an order of magnitude. And once a bunch of people started using OS X, and Apple started its campaign actively against Vista, people got very curious, and a lot of people starting noticing the things about Vista that pissed them off.
    - thras 18y ago
      Sorry, but I run Linux, Windows, and OS X. Vista isn't worse than XP in any meaningful way (better in a few), and I have never run into any problems using it. OS X is pretty, but there is nothing about it that makes me go "wow!" And Linux is for people that know way too much about computers (like me, unfortunately) and who don't value their time enough (again me, apparently). I think that Apple can do really wonderful things -- my iPhone is miles ahead of any Windows Mobile phone I've ever owned. On the other hand, the Zune software simply destroys iTunes in usability and prettiness -- the Zune itself is a very nice device. The link that you referred to talks about Windows XP (2004 should have been a clue) and isn't quite accurate anyway. I think that Tumblr may want to concentrate on reading dialog boxes a little more carefully.
- pmorici 18y ago
  Because in an economic down turn where lending is tight to non existent cash means flexibility that your competitors can't buy in the form of a cheap loan.
jacobscott 18y ago
This actually lines up reasonably well with market cap -- Apple is at $85B and Microsoft at $195B. Apple has seen resurgence in growth (75% year over year is pretty kick ass), but they are much more heavily tied to consumers than microsoft so it seems logical that the current economic troubles will hit them harder. Personally, the only thing I would like more than Apple surpassing Microsoft as the giant computing behemoth is Ubuntu making good on its goal of surpassing Apple in usability/UI.
- thras 18y ago
  Ubuntu can't surpass Apple until someone figures out how to teach open source developers to create good UIs. Or at least get them to stick to standards.
  - unalone 18y ago
    Yeah. And I think this is the source of a lot of the Mac/Linux bickering that I've seen on that site. A lot of Mac users really do like the idea of open source. It's just that as things stand right now, no one Linux distro comes even close to having the level of polish that OS X does. They're on two separate playing fields. And usually some straw man, like Compiz, gets dangled as "proof" that Ubuntu is graphically superior to the Mac, when a part of OS X is that the graphical flourishes tend to actually aid usability. Think Exposé - any one of the various things Exposé does - or the new Stacks, or even the genie minimalism. And while I'm certain that there are patches for Ubuntu that do each of these things, they aren't as well-incorporated into the system and that's the point of OS X. They're built into the core so developers can rely on them and build plugins that tie into the various features. And even then, that's ignoring all of the small details, like the completely polished beauty of the current window system, or the drag-file-icon-in-window-to-move, or the ability for programmers to change their Dock icon's image to represent information. There's just too much that any distro right now would have to do to catch up, and it frustrates me - and, I'd guess, other Mac users - that rather than acknowledge this ridiculous gap and figure out how to surpass it, Linux users raise stupid arguments and claim that every last Mac user uses their computer because of marketing hype. It's getting the Linux distros I've seen and participated in the community of - Ubuntu and Kubuntu, so maybe I've missed something - nowhere.
mrdodge 18y ago
Apple doesn't pay a dividend...
- tsuraan 18y ago
  This brings up something that's been bothering me for a while: how does MS's dividend make anybody want to buy their stock? IIRC, MS pays a $0.11 dividend per $22 share (price as of this morning). I'm not very familiar with things relating to stocks, but that looks like an interest rate of 0.5%. My checking account does better than that, so why would anybody care at all about a dividend that is so low?
  - taw 18y ago
    Value of stock comes from a combination of dividend and expected raise in their price, analyzing just half of it will grossly underestimate its value.
  - kirse 18y ago
    That's a quarterly dividend, so if you automatically re-invest dividends thats .5% compounded 4x during a year. If you're investing in stocks, you're usually not thinking that the dividend will be your greatest return. Dividends usually indicate one of two things - 1) the company is healthy and profitable 2) the company has a massive cash pile. In the case of Microsoft it was both, but primarily the mountain of cash they used to have (>$60bn) that got investors complaining that MS do something with the cash mountain. MS would easily have more cash than Apple if they didn't put in the effort to get rid of it over the past 5 years or so.
ggrot 18y ago
The link is an interesting comparison of Apple and Microsoft, but I don't understand why cash on hand is very meaningful. Cash isn't terribly profitable, otherwise I as a market player would just keep cash around directly instead of buying apple or microsoft. Too much cash can mean that the company is having a hard time finding valuable things to invest that cash in. If microsoft wanted to, it could easily raise more cash by issuing more shares (or stopping the dividend as others have pointed out). The cash comparison is thus not meaningful. That said, the comparison of real revenues and profits is tremendously interesting - Apple is within spitting distance of Microsoft on revenue and has a similar profit margin. The profit margin is what interests me. Microsoft has always enjoyed a bigger profit margin as a software company than as a hardware company. Apple is more of a hybrid, but has still managed to come away with a high profit margin.
- netcan 18y ago
  I think it is important t distinguish between 'doesn't mean anything' & 'doesn't mean X'. It doesn't mean that Apple has a brighter future or that it's a better investment. It may even (as you say) mean bad things. But it does mean some things. Another big tech being cashed up may mean that big consumer tech companies might start paying dividends. It might mean Apple start trying to buy other companies like MS have. Apple is a big player that has overtaken another big player in cash, a player known for having a lot of it. So this can almost be considered an industry trend now. That's meaningful & newsworthy. I think that is meaningful. Maybe it means (like you say) that the industry that the companies (industry) is having a hard time finding valuable things to invest that cash in.
- jhancock 18y ago
  If Apple didn't have large amounts of cash on hand when Jobs came back, Apple would have died or been swallowed up. If Sun didn't have massive amounts of cash on hand after the dot com boom, Sun would have died or been swallowed up. Cash is King. Especially in hard times ;)
nickb 18y ago
If you were SJ, what would you buy with it? Buying back shares is a waste at this time and SJ doesn't like buybacks. Some people see Apple buying Adobe. ADBE's market cap is around $12B but to me a big negative is the amount of overlap between their software suites... lots of value will be wasted but on the other hand, Apple would have a virtual monopoly on digital content production. If I were SJ, I'd go after Yahoo. It's now around $17B and would offer Apple more room to grow and would also give Google some things to think about as they're now going after Apple's mobile slice.
- gaius 18y ago
  What would Apple do with Yahoo? Yahoo now is where AOL was in the '90s, symbolic of everything that's cheesy and lame about the Internets. The last thing super-cool Air-toting Apple customers want is to be associated with it. If Apple buys anyone it should be Sun (or what's left of SGI).
  - nickb 18y ago
    One word: Distribution.
    - gaius 18y ago
      Of what?
      - nickb 18y ago
        Music, movies, webapps, everything.
- cosmo7 18y ago
  I think one reason Apple has always kept a fairly hefty cash balance is that it makes hostile takeovers harder. The other thing you can see from Apple's history is that they tend to buy smaller companies only when the software those companies own matches Apple's strategy.
Kilimanjaro 18y ago
Once a $500B market cap giant, microsoft is now below $200B Glory days in the past
- Rexxar 18y ago
  Over evaluated stock during the tech bubble is not my definition of "glory days in the past". Microsoft have more competitors now but is also stronger than ever.
Hoff 18y ago
Dividends are useful to differentiate cash-rich and otherwise undistinguished stock offerings. Great mounds of cash allow for some stability and for judicious bargain shopping and for product upgrades during downturns; for a longer horizon.

62 points by ksvs 18y ago

MS had decent profits for a quarter that saw the slow selling Vista as their 'big thing' (while Apple has the 3G iPhone to sell). Windows 7 will improve on Vista's issues, I don't see MS losing it's place (on top) anytime soon. Also, why are we praising 'cash on hand', cash is only good when you use it.

laut 18y ago
Yeah, having cash is overrated. Give all of your cash to me ;) Seriously, Apple are raking it in. They have more cash because they make so much money every quarter. I think they should pay dividends though.
gaius 18y ago
Windows 7 might be a debacle that makes Vista look like the best thing since sliced bread. No-one knows yet.
- antidaily 18y ago
  I'd agree except that its basically just an iteration of Vista that builds off of the newer kernel from service pack 1.
thras 18y ago
I don't believe that Windows 7 will really improve on Vista's issues. Mainly because the real problems with Vista are either imaginary (cf. Mojave) or completely out of Microsoft's control (third party applications, drivers). A fundamental problem with Vista was that switching operating systems is a pain and users don't like to do it. Further, Apple and Linux now have a lot of mind share among the technical trendsetters. For Apple and Linux users, it's not enough to like Apple or Linux, you have to hate Microsoft too. When Windows 7 comes along, the press will be exactly the same as it was for Vista: Why switch when your programs already work on the old OS? Why won't it run on X or Y type ancient hardware? Etc, etc. And the Apple and Linux fans will make Windows 7 into exactly the same sort of dirty word that Vista is. Joe Average computer user doesn't choose his next OS based on what he likes, he does it based on what he hears, and that won't be anything good.
- unalone 18y ago
  Mainly because the real problems with Vista are either imaginary (cf. Mojave) This is a bullshit argument, and I'd really love people to stop using it. Mojave showed that people using Vista for short amounts of time in factory-approve conditions will think that it's "pretty neat." But Vista's always had the "neat" factor about it. Never as much as OS X, but then, not many people get a computer based on "neat" factor, despite what fanboys on both sides say about each other's products. Where Vista sours is when you use it for a while and notice the little things. Of course, the security windows - even though you can disable them, that's the iconic one for Vista. I've had that security window crash my old computer, too: if your computer is running a lot of stuff, that window sometimes tips the entire thing over. The little things bottle up. They build up and tip out. I just came across a post yesterday on Tumblr that mentioned one: I'd never actively thought about this feature, I wouldn't have ever thought to diss Vista for it after I got my Mac, but remembering it, it was awful in a small way. http://tumblelog.marco.org/56149922 http://tumblelog.marco.org/56149922 And when you've only used Windows, stuff like this is acceptable. It's commonplace. There is no alternative. But when you use any other OS, you realize that a lot of things are done much better. Linux has its own problems, namely drivers, but that was enough to make me hate Windows in no time at all. OS X is even worse for that, because it's better on an order of magnitude. And once a bunch of people started using OS X, and Apple started its campaign actively against Vista, people got very curious, and a lot of people starting noticing the things about Vista that pissed them off.
  - thras 18y ago
    Sorry, but I run Linux, Windows, and OS X. Vista isn't worse than XP in any meaningful way (better in a few), and I have never run into any problems using it. OS X is pretty, but there is nothing about it that makes me go "wow!" And Linux is for people that know way too much about computers (like me, unfortunately) and who don't value their time enough (again me, apparently). I think that Apple can do really wonderful things -- my iPhone is miles ahead of any Windows Mobile phone I've ever owned. On the other hand, the Zune software simply destroys iTunes in usability and prettiness -- the Zune itself is a very nice device. The link that you referred to talks about Windows XP (2004 should have been a clue) and isn't quite accurate anyway. I think that Tumblr may want to concentrate on reading dialog boxes a little more carefully.
pmorici 18y ago
Because in an economic down turn where lending is tight to non existent cash means flexibility that your competitors can't buy in the form of a cheap loan.

jacobscott 18y ago

This actually lines up reasonably well with market cap -- Apple is at $85B and Microsoft at $195B. Apple has seen resurgence in growth (75% year over year is pretty kick ass), but they are much more heavily tied to consumers than microsoft so it seems logical that the current economic troubles will hit them harder. Personally, the only thing I would like more than Apple surpassing Microsoft as the giant computing behemoth is Ubuntu making good on its goal of surpassing Apple in usability/UI.

thras 18y ago
Ubuntu can't surpass Apple until someone figures out how to teach open source developers to create good UIs. Or at least get them to stick to standards.
- unalone 18y ago
  Yeah. And I think this is the source of a lot of the Mac/Linux bickering that I've seen on that site. A lot of Mac users really do like the idea of open source. It's just that as things stand right now, no one Linux distro comes even close to having the level of polish that OS X does. They're on two separate playing fields. And usually some straw man, like Compiz, gets dangled as "proof" that Ubuntu is graphically superior to the Mac, when a part of OS X is that the graphical flourishes tend to actually aid usability. Think Exposé - any one of the various things Exposé does - or the new Stacks, or even the genie minimalism. And while I'm certain that there are patches for Ubuntu that do each of these things, they aren't as well-incorporated into the system and that's the point of OS X. They're built into the core so developers can rely on them and build plugins that tie into the various features. And even then, that's ignoring all of the small details, like the completely polished beauty of the current window system, or the drag-file-icon-in-window-to-move, or the ability for programmers to change their Dock icon's image to represent information. There's just too much that any distro right now would have to do to catch up, and it frustrates me - and, I'd guess, other Mac users - that rather than acknowledge this ridiculous gap and figure out how to surpass it, Linux users raise stupid arguments and claim that every last Mac user uses their computer because of marketing hype. It's getting the Linux distros I've seen and participated in the community of - Ubuntu and Kubuntu, so maybe I've missed something - nowhere.

mrdodge 18y ago

Apple doesn't pay a dividend...

tsuraan 18y ago
This brings up something that's been bothering me for a while: how does MS's dividend make anybody want to buy their stock? IIRC, MS pays a $0.11 dividend per $22 share (price as of this morning). I'm not very familiar with things relating to stocks, but that looks like an interest rate of 0.5%. My checking account does better than that, so why would anybody care at all about a dividend that is so low?
- taw 18y ago
  Value of stock comes from a combination of dividend and expected raise in their price, analyzing just half of it will grossly underestimate its value.
- kirse 18y ago
  That's a quarterly dividend, so if you automatically re-invest dividends thats .5% compounded 4x during a year. If you're investing in stocks, you're usually not thinking that the dividend will be your greatest return. Dividends usually indicate one of two things - 1) the company is healthy and profitable 2) the company has a massive cash pile. In the case of Microsoft it was both, but primarily the mountain of cash they used to have (>$60bn) that got investors complaining that MS do something with the cash mountain. MS would easily have more cash than Apple if they didn't put in the effort to get rid of it over the past 5 years or so.

ggrot 18y ago

The link is an interesting comparison of Apple and Microsoft, but I don't understand why cash on hand is very meaningful. Cash isn't terribly profitable, otherwise I as a market player would just keep cash around directly instead of buying apple or microsoft. Too much cash can mean that the company is having a hard time finding valuable things to invest that cash in. If microsoft wanted to, it could easily raise more cash by issuing more shares (or stopping the dividend as others have pointed out). The cash comparison is thus not meaningful. That said, the comparison of real revenues and profits is tremendously interesting - Apple is within spitting distance of Microsoft on revenue and has a similar profit margin. The profit margin is what interests me. Microsoft has always enjoyed a bigger profit margin as a software company than as a hardware company. Apple is more of a hybrid, but has still managed to come away with a high profit margin.

netcan 18y ago
I think it is important t distinguish between 'doesn't mean anything' & 'doesn't mean X'. It doesn't mean that Apple has a brighter future or that it's a better investment. It may even (as you say) mean bad things. But it does mean some things. Another big tech being cashed up may mean that big consumer tech companies might start paying dividends. It might mean Apple start trying to buy other companies like MS have. Apple is a big player that has overtaken another big player in cash, a player known for having a lot of it. So this can almost be considered an industry trend now. That's meaningful & newsworthy. I think that is meaningful. Maybe it means (like you say) that the industry that the companies (industry) is having a hard time finding valuable things to invest that cash in.
jhancock 18y ago
If Apple didn't have large amounts of cash on hand when Jobs came back, Apple would have died or been swallowed up. If Sun didn't have massive amounts of cash on hand after the dot com boom, Sun would have died or been swallowed up. Cash is King. Especially in hard times ;)

nickb 18y ago

If you were SJ, what would you buy with it? Buying back shares is a waste at this time and SJ doesn't like buybacks. Some people see Apple buying Adobe. ADBE's market cap is around $12B but to me a big negative is the amount of overlap between their software suites... lots of value will be wasted but on the other hand, Apple would have a virtual monopoly on digital content production. If I were SJ, I'd go after Yahoo. It's now around $17B and would offer Apple more room to grow and would also give Google some things to think about as they're now going after Apple's mobile slice.

gaius 18y ago
What would Apple do with Yahoo? Yahoo now is where AOL was in the '90s, symbolic of everything that's cheesy and lame about the Internets. The last thing super-cool Air-toting Apple customers want is to be associated with it. If Apple buys anyone it should be Sun (or what's left of SGI).
- nickb 18y ago
  One word: Distribution.
  - gaius 18y ago
    Of what?
    - nickb 18y ago
      Music, movies, webapps, everything.
cosmo7 18y ago
I think one reason Apple has always kept a fairly hefty cash balance is that it makes hostile takeovers harder. The other thing you can see from Apple's history is that they tend to buy smaller companies only when the software those companies own matches Apple's strategy.

Kilimanjaro 18y ago

Once a $500B market cap giant, microsoft is now below $200B Glory days in the past

Rexxar 18y ago
Over evaluated stock during the tech bubble is not my definition of "glory days in the past". Microsoft have more competitors now but is also stronger than ever.

Hoff 18y ago

Dividends are useful to differentiate cash-rich and otherwise undistinguished stock offerings. Great mounds of cash allow for some stability and for judicious bargain shopping and for product upgrades during downturns; for a longer horizon.