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MacBytes
Jan 21, 2006, 08:58 AM
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Category: Opinion/Interviews
Link: How can Apple be worth more than Dell? (http://www.macbytes.com/link.php?sid=20060121095854)
Description:: I'm still digesting the news that Apple's market cap has exceeded Dell's.

Posted on MacBytes.com (http://www.macbytes.com)
Approved by Mudbug

iMeowbot
Jan 21, 2006, 09:21 AM
Since when do stock prices have anything to do with anything?

Photorun
Jan 21, 2006, 09:45 AM
Like iMeowbot said. There's a good book by Joey Anuff caled "Dumb Money" which lays out the stock market for what it is... vacuous hype. There is money to be made through stocks, sure, but it's a very flimsy system, it's definitely not a place to put all your savings.

As far as Apple being worth more than Dell in terms of worth in the computer industry, absolutely, with Apple Dell wouldn't have anyone to copy. Also Dell is the Walmart of comptuers, made in sweat shops, highest DOA rate of any computer maker, and some of the worst customer support, all farmed overseas to India. If you own a Dell and need to make a service call (which, because they're made so shoddily, there's a good chance) best learn Punjab first. And one last thing, Dell's not going to be helped by the bait and switch class action suits, and they have them coming to them too.

jkhanson
Jan 21, 2006, 10:47 AM
And one last thing, Dell's not going to be helped by the bait and switch class action suits, and they have them coming to them too.

Please expand on this. Not sure what you mean...

topicolo
Jan 21, 2006, 10:59 AM
Like iMeowbot said. There's a good book by Joey Anuff caled "Dumb Money" which lays out the stock market for what it is... vacuous hype. There is money to be made through stocks, sure, but it's a very flimsy system, it's definitely not a place to put all your savings.


Dude, you're basing your evaluation of the entire market based on the experiences of a DAY TRADER?!?!? that's like judging a society by only talking to the inmates in its jails. Day traders are purely in the market for the fun of it--no sane person would jump into a profession where 80% of the traders fail. The stock market is an amazing wealth generator over the long term. If you look at the overall annual return for the last 30 years, you'll notice that it's about 10-11%/year. That's higher than any other legal investment method.

fixyourthinking
Jan 21, 2006, 11:22 AM
... it's definitely not a place to put all your savings.

...As far as Apple being worth more than Dell in terms of worth in the computer industry, absolutely, with Apple Dell wouldn't have anyone to copy. Also Dell is the Walmart of comptuers, made in sweat shops, highest DOA rate of any computer maker, and some of the worst customer support ...

No place is a good place to put all your savings ... you could add bonds, you could add real estate. Diversification is key to wealth ... as long as you don't lose focus. If Apple had not branched into the iPod space ... it would be out of business (or almost there) by now. <--- diversification, but something that still fit the focus of Apple ... ease of use.

Dell has one of the highest DOA rates because it sells the most computers ... period ... eventhough I personally think Dells are shoddy junk boxes ... they have roughly 30% of the worldwide market. Wow! When Apple's numbers are that high, let's see how many problems they have ... but I do agree and like the fact that most of Apple's support is in Ireland or in the US.

jono_3
Jan 21, 2006, 11:49 AM
apple couldnt have been making millions of dollards on ipods could they?:p

Stridder44
Jan 21, 2006, 12:23 PM
apple couldnt have been making millions of dollards on ipods could they?:p


I think it's more a question of how many millions...

maximumbarkly
Jan 21, 2006, 02:58 PM
Also Dell is the Walmart of comptuers, made in sweat shops, highest DOA rate of any computer maker, and some of the worst customer support, all farmed overseas to India. If you own a Dell and need to make a service call (which, because they're made so shoddily, there's a good chance) best learn Punjab first. And one last thing, Dell's not going to be helped by the bait and switch class action suits, and they have them coming to them too.

I'm a Field Service Technician at my college and I deal with Dells almost daily.

Dell gets a terrible wrap. I'm certain that their low-end computers are pieces of trash comparitively, but their high end models are solid machines. We never have a problem when it comes to hardware. Some of the cheaper dells have PSU problems, but that's really all.

You really can't cut Dell like this if you look at the computer as a consumer product. We field techs look at these cheap machines and are impressed at the price they can pull. We wonder how much lower it would be since all of these computers have to carry a windows license, and the college has its own anyways. Imagine the moeny we would save, and imagine the base cost for parts on these complex machines!

thatguy_youknow
Jan 21, 2006, 08:26 PM
Please expand on this. Not sure what you mean...


I think he was refering to Dell's website. You click on a computer that is only $499 then the one you get is more because it has added more RAM, a larger hard drive and a service plan. You have to reconfigure the system to make it $499 again. At least this was the experience that I had a year ago or so.

California
Jan 21, 2006, 09:16 PM
How can Apple be worth more than Dell?

OSX.

Also, innovation. Design. Genius. Not just cheap rip offs of what Apple does.

cablecartman
Jan 21, 2006, 11:28 PM
One word: iPod.

And, wow, isn't it refreshing an ingenious company succeeding at long last!

Analog Kid
Jan 22, 2006, 03:35 AM
Since when do stock prices have anything to do with anything?
The long term market is a pretty good measure of the value of a company. In the short term it can be rocked by hype either way.

The article is blending two points-- one is that the high P/E ratio that Apple is enjoying right now can be explained, in part, by it's small size. It takes much less to double the value of Apple than it would to double the value of Dell. The other is that Apple has room to grow in lucrative markets-- entertainment devices primarily but even small growth in the PC marketshare would yield a big change in revenue.

The realization that Apple has a lot of potential flooded money into it's stock. Then the "momentum" from people trying to invest in a stock that's growing kept more money coming.

This is good for Apple-- they have a chance to raise capital by issuing stock, and their employees with options are likely to stay on.

The flip side, of course, is that a smaller companies stock can fall in value just as quickly. At the first sign that iPod sales are leveling off, for example, you can expect the price to plummet-- unless they have another high-growth product already ramping up.

California
Jan 22, 2006, 03:38 AM
The long term market is a pretty good measure of the value of a company. In the short term it can be rocked by hype either way.

The article is blending two points-- one is that the high P/E ratio that Apple is enjoying right now can be explained, in part, by it's small size. It takes much less to double the value of Apple than it would to double the value of Dell. The other is that Apple has room to grow in lucrative markets-- entertainment devices primarily but even small growth in the PC marketshare would yield a big change in revenue.

The realization that Apple has a lot of potential flooded money into it's stock. Then the "momentum" from people trying to invest in a stock that's growing kept more money coming.

This is good for Apple-- they have a chance to raise capital by issuing stock, and their employees with options are likely to stay on.

The flip side, of course, is that a smaller companies stock can fall in value just as quickly. At the first sign that iPod sales are leveling off, for example, you can expect the price to plummet-- unless they have another high-growth product already ramping up.

They why did aapl tank this week?

macnulty
Jan 22, 2006, 08:35 AM
They why did aapl tank this week?

Lowered expectations for the second quarter.

mklos
Jan 22, 2006, 12:56 PM
Which should be expected as the 2nd quarter is almost always one of the worst quarters for revenues/profits. Plus, Apple can downplay the expectations and then have great results in the end. I think with the iMac, MacBook Pro and probably other Macs being announced in the 2nd quarter, Apple will do just fine. I don't expect Apple to blow me away with results like the 1st quarter, but they'll certainly do ok. I expect Apple to sell over 1 Million Macs again and probably some where around 6 or 7 million iPods.

macnulty
Jan 22, 2006, 06:41 PM
Apple has the intangible: brand loyalty. Dell is built upon price, 85% of their sales is to business which is always looking for cheap. Unless Apple totally tanks on quality, its' base will be there.

Analog Kid
Jan 24, 2006, 03:18 AM
They why did aapl tank this week?
Short term fluctuations... It's likely that hype drove the price beyond where the bulk of the market thought it should be and people took the profit. Or, some piece of news came out that people reacted to.

The short term market is more of a sociology experiment-- personalities enter into it. People follow the hype, people see a chance to make a quick buck, people think "everyone is buying Apple, it must be the right thing to do". On the other hand, there's a tendency to over react to some news item, or see the stock start to dip and try and get out before losing too much which just pushes it lower.

In the long term the price is set by fundamentals-- how much the company makes, what the opportunity for growth is, the expectation that management is capable of capitalizing on that growth, and dividends (which are a way for a company to handle a profit without growth-- give the profit to the owners ie. shareholders).