Apple Passes Microsoft to Become Second-Largest U.S. Company by Market Capitalization

[ipadrobot]

in related news:

Apple is now the U.S.'s No. 2 e-retailer

Apple is AMAZING!

http://tech.fortune.cnn.com/2010/05/27/apple-is-now-the-u-s-s-no-2-e-retailer/?cnn=yes

 

[rasmasyean]

in related news:

Apple is now the U.S.'s No. 2 e-retailer

Apple is AMAZING!

http://tech.fortune.cnn.com/2010/05/27/apple-is-now-the-u-s-s-no-2-e-retailer/?cnn=yes

Damn, NetFlix is up there too? I guess that kinda shows where Blu-Ray's "victory" will end up.

 

[Lochias]

All those considered, Microsoft seems to have dealt with that model pretty well. Like it or not, a 90%+ market share on an installed OS base confirms that.

What's Apple's excuse?

As for moving forward at their own pace (desktop market).... I've seen snails move faster.

Excuse for what?
For making so much money?

 

[Avatar74]

My only point is that Apple's P/E is hardly surprising given its rate of earnings growth.

There's a fallacy embedded here in assuming that all speculators always operate rationally, or that all inputs into market price behave rationally... otherwise the statement "hardly surprising" is bunk.

Let's talk degrees of preposterousness for a moment... What would you define as a "surprising" PEG ratio (PEG not P/E) for Apple, and why? Indulge me and provide me with a method for analyzing P/E ratios independent of what other stocks are performing in the sector (as they may very well all be overvalued)... what are the quantitative error-checks against bias?

It's like Nostradamian predictions... I can predict that somewhere, some time, a purple flower will be seen by twins. As long as I'm vague enough about the time and place, my prediction is bound to come true. that's the problem with qualitative declarations in a quantitatively analytical environment.

So, your statement here is meaningless. Let me explain further...

I find, as a financial analyst, Apple's price fluctuation to be outrageous compared to its earnings growth. I can also tell you why... Imagine I offer to sell you $10,000 for $200,000. Would you take it? I don't think you would. That's the problem with valuation based on P/E multiples. It ignores the most fundamental, logical, airtight argument... that anyone who pays more than a dollar for a dollar is an idiot.

But Buffett has gone over this before... Some folks understand instantly the sense in paying 60 cents to get a dollar back, others never will... no matter how many times you explain it to them.

I know what your response is going to be... people are paying for a bet on future price. Well, then it's just gambling. Thats not investing. That's not finance. That's throwing darts blindfolded, hoping that you might hit a bullseye, rather than owning a piece of a company that's worth more than you paid for it. It isn't so much about hitting the bullseye every time as it is about knowing how to avoid potentially catastrophic investment decisions.

Your straw-man question, "can you tell me why you would prefer to use the current market price as a predictor of value rather than the actual operating assets and cash generating ability of the business?" -- telling me what I supposedly believe and then ridiculing it -- is something else.

You have no idea how I invest, or what in.

I based my question off your original statement:

Current P/E hardly reflects a price "heavily inflated by speculation," given the persistent numbers for expansion of nearly every product category. You can argue that Apple cannot maintain this rate of revenue and earnings growth, but analysts are surprised again and again on the upside. Unless you know something that most of us do not, Apple is significantly undervalued.

You stated that the Current P/E ratio doesn't reflect a price heavily inflated by speculation. Ok, then what does the P/E ratio indicate other than a price that is more than 20 times the value of earnings (and a little under ten times the value of working capital plus forward cash flows discounted to net present value)?

You stated Apple is significantly undervalued, and from your previous statement you're basing that claim entirely on P/E multiples... Hence my question.

Do you understand that when I say that the market price far exceeds intrinsic value, I've already factored in future earnings growth into my calculation of Apple's worth, on top of their working capital (net current assets)? So, then, where's the additional premium coming from? That's right... Apple's future cash flows and working capital are really worth about $35 a share given their current growth rate. Let's be generous and count total net assets less intangibles... even though that's a little misleading because only current assets dictate the revenue generating capacity. It doesn't matter how much property, plant and equipment they have... They could have gold toilets in their offices and it wouldn't make a lick of difference as to their earnings potential. But let's be generous and count it all.. it still comes to about $51-52 a share. That's not using a full-blown DCF model, which would only discount my estimated value of cash flows to a lower Net Present Value... making the per share intrinsic value (once again, book value PLUS future cash flows) even lower than $52 a share.

So tell me again, how are they undervalued at $250 a share?

 

[MagnusVonMagnum]

Were you around during the Mac clones era? Somoehow I think not. This was when someone other than Steve Jobs was running Apple and allowed 3rd-party manufacturers to make hardware for the Mac OS. It was a disaster.

Things are a bit different now (Apple isn't a sinking ship like it was then) and you're talking about licensing clones and a responsibility to make them compatible with the OS by Apple whereas I'm suggesting Apple should simply let the other hardware makers compete but NOT support them. Thus, if their hardware has problems, that makes it a valid point to buy a machine from Apple and if they do work fine, it offers value and choice to the customer. Everyone wins (well not really since Apple's profit margins might have to drop a bit to compete with lower prices since they're massively overpriced right now).

I had the unfortunate experience of working on these POS machines for the better part of a year. One of the first things that Steve did when he rejoined

That's odd. I remember some of those clones being MUCH better quality and especially value for the dollar than the ones by Apple. It was a disaster for Apple because they could not manage to make reasonably priced hardware to compete with the clones. Of course, there are still other options. Apple doesn't seem to want to cater to certain markets (e.g. desktop gaming rigs) and so they could license out to other companies to build JUST certain spec equipment, thus freeing them of the risk that the machines won't sell and making gaming actually viable on the Mac (there aren't really any real gaming type GPUs available for the Mac, especially at the consumer machine level).

As for the Clayton Antitrust Act and the rest of the caterwauling, I suggest calming down and studying a bit more. I can't say I've gone through an exhaustive study of the case law and precedent here but I see nothing in the Clayton act that prevents Apple from shipping a hardware/software combination-- which is good, because codifying the idea that there is only one form of competition would kill technical innovation.

The problem is not them shipping such a product, but in FORBIDDING (through contract license) anyone else to produce hardware that can run OSX (or rather OSX is not "allowed" to be installed on any hardware other than by Apple, thus forcing the consumer who wants only OSX to also buy Apple brand hardware and thus the "Tying" clause of Clayton is violated. If the market is substantially impacted by that act, it is a violation of Clayton, pure and simple. The ONLY ambiguity is whether or not Apple is creating "significant" market impact or not. Being the #2 (or #3 at any given moment) U.S. capital maker sounds pretty significant to me, especially given most of that capital comes from not having direct competition for Mac hardware (which has traditionally been their cash cow).

Except the basis of Apple's success is NOT from the computer business. The only reason why it's up so "high" relative to old times is because of the iPod craze and introduction of the consumer electronics transformation. OSX and "computer hardware" has very little to do with their success. It more of less rode the fad.

Apple is still not well respected for thier computers. And one can argue a big part of Mac penetration compared to before is because it can also run Windows.

Perhaps you should actually look into where Apple generates most of their profits. It's not from iTunes or iPhones, at least not in the past few years. Those provide cachet and popular exposure to Apple products, but that does NOT mean they provide the majority of Apple's actual PROFITS.

So OSX, an operating system used in 10% of the nation's computers, a clear monopoly with a stranglehold on the economy, is obviously covered by anti-trust legislation. I'd split the company, like the oil cartel, or the original AT&T, giving us OSX of Cupertino, OSX of Redmond, OSX of San Antonio.

If you cannot follow or don't understand the topic or what's involved in it, then perhaps it would be better to stay out of the conversation. The operating system is the TIE that sells the HARDWARE. In terms of market share, Apple has 92% of the $1000+ computer hardware market!!! NOT 10% (that's operating system in an overall market) and their entire computer hardware share relative to other hardware manufacturers (i.e. HP, Dell, Lenovo, etc., *NOT* Microsoft which does not make computer hardware unless you count the Zune or Xbox) is closer to 20-30% and is usually between 3-5 on any given year in position relative to the big hardware makers, DESPITE their OS only having that 10% market share.

In other words, Apple has HUGE hardware sales DESPITE a tiny share of the OS market. They get that because they don't have to compete for ANY of the *hardware* sales of the OSX operating system market. They get 100% of those and that is a big part of HOW they can be bigger than Microsoft despite the small OS share. Or did you think they got there based solely on iPhone sales? This isn't rocket science, but apparently the onerous and faulty logic surrounding this 10% argument seems absolutely RAMPANT on here. But then so does the lack of computer knowledge in general. Thus, I think most Mac users are armchair quarterbacks, so-to-speak.

 

[GoodWatch]

In other words, Apple has HUGE hardware sales DESPITE a tiny share of the OS market. They get that because they don't have to compete for ANY of the *hardware* sales of the OSX operating system market. They get 100% of those and that is a big part of HOW they can be bigger than Microsoft despite the small OS share. Or did you think they got there based solely on iPhone sales? This isn't rocket science, but apparently the onerous and faulty logic surrounding this 10% argument seems absolutely RAMPANT on here. But then so does the lack of computer knowledge in general. Thus, I think most Mac users are armchair quarterbacks, so-to-speak.

An excellent riposte. Apple internal hardware is no better or worse compared to any of the other A-brands, heck, they're made from the same (non Apple produced) components as all the others. And in the same Chinese factories. Apple designs, they don't produce.

But, and I can hardly get this over my tongue, you don't have to buy Apple products. I do, and thus I have to pay the 'Apple tax', but no-one forces me to. There's no defence against this argument that happens to be one of the most popular on this forum.

 

[GamecockMac]

You may want to check AAPL on Friday when everybody sells and heads off for the weekend. May be a good time to buy if you are interested.

Well, you were right about the market, but wrong about Apple.

AAPL up $3.53 (1.39%) to $256.88 on a day when the NASDAQ was down 0.91% and the Dow was off 1.19%

Just keeps going, and going, and going, and...

 

[Battlestar]

When you invest in a company you should be getting dividends, if not then you are just a gambler.

The real question here should be how will Apple do when inflation is realized in consumer prices?

When food and energy are at least double today's prices are people really going to care about the latest hot electronic gadget or being able to eat?

Apple has way too much exposure to the U.S. consumer and when the currency crisis hits, which it will before the end of Obama's first term, AAPL will take a good old fashioned haircut down to the low 100's. And that low 100's share price will have 1/2 of the purchasing power that it does today.

The message now should be to get out of all of your U.S. dollar denominated assests before it is too late.

 

[czachorski]

And one can argue a big part of Mac penetration compared to before is because it can also run Windows.

One can also argue that a big part of Mac penetration increase is because of the halo effect from iPods and iPhones.

 

[matticus008]

thus forcing the consumer who wants only OSX to also buy Apple brand hardware and thus the "Tying" clause of Clayton is violated. If the market is substantially impacted by that act, it is a violation of Clayton, pure and simple.

Wrong, pure and simple. It's already been discussed in great detail, and to blatant rejection of your indefensible arguments, over the past several years. It was expressly rejected by the court when raised by Psystar. Obvious troll is obvious, as the kids say. It can be repeated ad nauseum, even in the face of defeat after defeat, but you will never learn and have never attempted to educate yourself. It's over; your argument is utterly without merit. If you want to be at least in the ball park, talk iTunes; at least Apple has market power there.

For the benefit of readers who are not familiar with this old tirade, naturally related components sold together is not unlawful tying. Having to buy from Apple to get Apple features is not tying any more than having to buy a Magellan GPS to get their software is or having to buy a Mazda to get a rotary engine. Even further, tying is not illegal. Tying with market impact isn't even itself illegal. Selling software for your own hardware is naturally related and thus excluded from the Sherman and Clayton Act provisions.

If Microsoft had gotten into the hardware business and sold its OS only for its own customers, they'd have been in the clear, too. HP does it. Palm and Nokia do it. NeXT did it until shortly before they collapsed. SGI and IBM did it in their time. Microsoft severed the natural relationship by creating a product intended for general consumption; even still, had they chosen to partner with Dell and Acer but not HP or Toshiba or IBM/Lenovo, that too would have been fine (and prevented the formation of the monopoly that they later abused and put them in the hot seat in the first place).

I think your own post has the solution for your unoriginal rants:
"If you cannot follow or don't understand the topic or what's involved in it, then perhaps it would be better to stay out of the conversation."

In other words, Apple has HUGE hardware sales DESPITE a tiny share of the OS market.

No, their hardware sales by volume are highly consistent with their overall OS share, at about 7-8%. If each manufacturer shipped an in-house OS, Mac OS would be in fifth place for both categories. In other words, their hardware sales are exactly in line with their overall market share, far from the disproportionate situation you claim.

Microsoft's revenue from Windows is also highly consistent with its market share. They reported about 13B of 58B total from their Windows division in 2009 (about 20%). If you priced the OS X value at $129 per Mac sold, that would work out to about $1.6B or 12% of Microsoft's Windows revenue, which is indeed slightly higher than the 9% you'd expect by market share, except that you can't compare the two because of massive pricing differentials in the products (namely Microsoft's deep OEM discounts [to $50] and steep retail pricing [to $300+]). Still, not the immense disproportionality you claim exists.

They get 100% of those and that is a big part of HOW they can be bigger than Microsoft despite the small OS share.

The size of the two companies has nothing to do with OS market share. Most (80%) of Microsoft's revenue comes from sources other than Windows. Simultaneously, even if Apple sold all of its computers without an OS and billed full price for every single OS X copy, it would still account for less than 4% of Apple's revenues.

Your entire market share rant is completely irrelevant, in other words.

apparently the onerous and faulty logic surrounding this 10% argument seems absolutely RAMPANT on here.

Indeed it does.

 

[GamecockMac]

When you invest in a company you should be getting dividends, if not then you are just a gambler.

The real question here should be how will Apple do when inflation is realized in consumer prices?

When food and energy are at least double today's prices are people really going to care about the latest hot electronic gadget or being able to eat?

Apple has way too much exposure to the U.S. consumer and when the currency crisis hits, which it will before the end of Obama's first term, AAPL will take a good old fashioned haircut down to the low 100's. And that low 100's share price will have 1/2 of the purchasing power that it does today.

The message now should be to get out of all of your U.S. dollar denominated assests before it is too late.

Is Chicken Little still on here squawking about the sky falling? Give it a rest, pal...doom-and-gloomers like you have been street-preaching the same sermon for as long as I've been in the market. So this "crisis" will absolutely hit us before January 2013? I'll bookmark this thread and we'll see who's right in a few years. Care to put a wager on it?

And for the record, I've never received a dividend on my AAPL investment, since I didn't buy my first shares until 1999, but if I can be considered "just a gambler" based on just my AAPL moves alone, I'd be barred from the casinos in Vegas due to my play being too good. I've got other instruments in my portfolio that pay dividends, but to make a sweeping generalization that all investments should do so doesn't show a very sophisticated understanding of the market.

Just so everyone knows what a financial "expert" is doing to prepare for the inevitable collapse of our currency, what are you primarily invested in? Gold, guns and ammunition?

 

[Battlestar]

Is Chicken Little still on here squawking about the sky falling? Give it a rest, pal...doom-and-gloomers like you have been street-preaching the same sermon for as long as I've been in the market. So this "crisis" will absolutely hit us before January 2013? I'll bookmark this thread and we'll see who's right in a few years. Care to put a wager on it?

And for the record, I've never received a dividend on my AAPL investment, since I didn't buy my first shares until 1999, but if I can be considered "just a gambler" based on just my AAPL moves alone, I'd be barred from the casinos in Vegas due to my play being too good. I've got other instruments in my portfolio that pay dividends, but to make a sweeping generalization that all investments should do so doesn't show a very sophisticated understanding of the market.

Just so everyone knows what a financial "expert" is doing to prepare for the inevitable collapse of our currency, what are you primarily invested in? Gold, guns and ammunition?

Are you really that far out of touch with reality that you actually believe that the U.S. economy on its current trajectory is sustainable for more than a few years? The economic fundamentals have gotten worse since 2008 not better.

The majority of the U.S. GDP since the early part of the last decade was and is a result of spending money borrowed from foreigners. Our productive capacity continues to decrease and we rely too heavily on imports.

Without savings and production there cannot be any real economic growth. Going deeper and deeper into debt and debasing our currency can only end badly for the U.S. dollar. What is going to happen when foreigners stop buying our debt?

You remind me of people who were calling a floor for the NASDAQ at 4000 and who said that housing would bottom in 2007. This is not a the sky is falling scenario. Actions that have been taken by the U.S. government have put the U.S. dollar on a path to disaster. Why you think that borrowing and printing money at an accelerated rate is good for any currency is beyond logic, and history has already proven that this can only end badly numerous times.

I own Gold, Silver, associated mining stocks, as well as foreign securities in their native markets in their native currencies.

 

[MagnusVonMagnum]

An excellent riposte. Apple internal hardware is no better or worse compared to any of the other A-brands, heck, they're made from the same (non Apple produced) components as all the others. And in the same Chinese factories. Apple designs, they don't produce.

But, and I can hardly get this over my tongue, you don't have to buy Apple products. I do, and thus I have to pay the 'Apple tax', but no-one forces me to. There's no defence against this argument that happens to be one of the most popular on this forum.

And that is precisely why I argue against Apple's "monopoly" (notice the quotes as I'm talking practical application of the word) on hardware for OSX. I *LIKE* OSX. I *DO NOT LIKE* Apple's meager and overpriced hardware offerings. By law, I SHOULD be able to buy my hardware from a competitor and still buy OSX from Apple and be happy, but Apple doesn't want that because they make their money by NOT allowing anyone else to sell me that hardware. They add insult to injury by then not even offering a desktop model that I would be interested in (the iMac is a mobile platform and SUCKS HARD and the MacPro is INSANELY OVERPRICED for consumer use; I could build a Hackintosh that runs circles around the default $2500 model for less than half the price). But telling me I don't have to buy hardware from Apple is like telling me I don't need to buy electricity from the electric company. Yes, I COULD get solar or start mining for gas, but ultimately if I feel I "need" *software* like Logic Studio (central to my recording studio setup), I "need" a Mac. And there is the problem. I want the SOFTWARE for OSX. I don't necessarily want the hardware they're trying to shove down my throat (and with no competition that's exactly what they would get to do if it were not for the Hackintosh; although I saw no good alternative in the "above netbook" category there. I can build a nice Hackintosh desktop, but I haven't seen many (if any really) notebook (not netbook) Hacks.

Wrong, pure and simple.

Yes, you are wrong pure and simple. Read the law and not the newspaper. "Relationship" has NOTHING to do with it. A manufacturer of printers has NO right to force the sale of THEIR ink or paper on you. Those are also highly related. This also has been settled in court, but you and others ignore that and instead focus on a Bush-Era judge who has allegiance to big business.

It's funny how the justice department is now investigating Apple based on their <30% share of the music market given there ARE viable alternatives to the EXACT same music there (whereas OSX and Windows are very different animals despite the same underlying hardware). This is simply because the Music Industry carries weight with the justice department and corrupt U.S. Government and puny little Psystar does/did NOT. That is the ONLY thing at play here because the *LAW* is QUITE CLEAR and their countersuit was 100% valid. The fact one judge is corrupt does not change that fact. Maybe you could explain how that oil spill occurred in the Gulf despite all the legal hurdles that were ignored and corrupt officials gave permits ANYWAY. Were the laws wrong? No. It was corruption once again that caused the trail that lead to the disaster. You argument is just as corrupt and/or ignorant. You show no desire to educate yourself with the truth and therefore you posts are meaningless.

No, their hardware sales by volume are highly consistent with their overall OS share, at about 7-8%. If each manufacturer shipped an in-house OS,

Those are two separate markets. You're comparing hardware sales of Apple to hardware sales of Microsoft. WHAT hardware sales of Microsoft???? Those are separate industries and Apple just happens to dabble in both. That's fine, but that doesn't give them the right to tack a contract onto OSX that says 'to use this, you MUST buy OUR hardware ONLY' and that is exactly what they have done and that is a violation of Clayton whether you believe it or not.

Microsoft's revenue from Windows is also highly consistent with its market share.

WTF!?!?!?

Do you even know what you wrote? You just told me that Windows sales are highly consistent with Windows sales!!!!

WELL OF COURSE THEY ARE!! They're the same product!!! Was someone supposed to be stealing part of their profits or what? You are comparing Microsoft against itself, not a competitor! What has that got to do with hardware??? NOTHING. This is because Microsoft does not make PCs! So what you basically just said is Microsoft's OS sales are consistent with its OS share. Gee, no kidding! Thanks for saying "1 - 1 = ZERO", which just happens to be the value of your post contribution. And yet you accuse ME of trolling???

Go ahead now and tell me that Florida Orange Juice's sales are consistent with its consumption of oranges at its juice factory (admittedly a worker or two could be taking a sip and some could be lost to manufacturing error, but otherwise....) It would have about as much relevance since you comparing it only to itself.

The CORRECT thing to say would be that the Windows market segment has numerous hardware manufacturers competing against each other for sales of hardware while the OSX market has NO manufacturers competing against each other for sales of hardware for that market segment. Apple gets 100% of those sales while HP, Lenovo, etc. have to fight each other for their share. While Apple's OS market share is smaller, their hardware share is huge because they get it all (no one competing against each other). You could argue a Mac user could switch to Windows but that would mean giving up nearly ALL their paid software libraries in the process (whereas a Windows user could at least keep theirs if they moved their copy of Windows over to their new Mac either in Boot Camp or through virtualization (which Apple will NOT ALLOW in reverse since they want their Mac users to stay put and not make it easier for them to go to Windows).

My point (to people that aren't trolling in their replies) is that I don't want to give up OSX, but I do not want Apple's desktop hardware choices either, which are a JOKE (either buy a notebook in disguise that is underpowered and not quad-core options or buy a Mac Pro that is overpriced, underpowered and out-of-date) and I shouldn't have to put up with them to keep OSX because other hardware makers should be allowed to sell me a machine that will run OSX given there are no hardware reasons why they cannot. Dell has expressed interest in offering OSX to their customers, but apparently they are not interested in fighting Apple to do so (and given that Apple is so much larger than Dell, who can blame them. The justice department has shown its bias to the biggest bribers).

 

[rasmasyean]

OK, since everyone likes to be an insider of Microsoft with his own story...here's a chart.

Notice that those peaks cause by Windows are from Vista and 7 releases. They are temporary and aren't sustained. It's usually from ppl running to the shelves out of marketing hype and maybe even Dell, et al retrofitting all their left over stock. Not sure what corps do...as I know the average deploy is 3 years out...but maybe at this point they renew licenses to enable "test teams" to start certifying the new OS with help of Microsoft engineers?

 

[MagnusVonMagnum]

OK, since everyone likes to be an insider of Microsoft with his own story...here's a chart.

Notice that those peaks cause by Windows are from Vista and 7 releases. They are temporary and aren't sustained. It's usually from ppl running to the shelves out of marketing hype and maybe even Dell, et al retrofitting all their left over stock. Not sure what corps do...as I know the average deploy is 3 years out...but maybe at this point they renew licenses to enable "test teams" to start certifying the new OS with help of Microsoft engineers?

I like your chart, but it only tells the story of "profit" and not market share. Microsoft obtained it's market share a lot earlier than this graph begins and the effects of that market on the other areas of software (e.g. Office) are longterm and can withstand even "marginal" OS releases like Vista (not the most popular OS revision M$ ever released). Many PCs stay in use a long time (some estimates show XP maybe still be close to 50% of the overall market) and M$ is now going to attempt to change that by stopping their security support for XP despite the huge numbers still in use out there. Windows7 is an improvement over Vista, but XP still gets the biggest bang for the buck for gaming and so it's a hard push when most games still support XP. Apple has the luxury of simply forcing people to buy new hardware by discontinuing operating system support for older hardware and making certain software no longer compatible, creating artificial crisis for many people who then HAVE to buy a new computer. This also tends to force people to update their Apple OS more often (that and the fact it has no protection on it and Apple doesn't care much because that's not where they make their money so they lack the incentive to protect the living crap out of it like Microsoft, particularly when they figure you have to buy your next computer from them anyway.

 

[rasmasyean]

I like your chart, but it only tells the story of "profit" and not market share. Microsoft obtained it's market share a lot earlier than this graph begins and the effects of that market on the other areas of software (e.g. Office) are longterm and can withstand even "marginal" OS releases like Vista (not the most popular OS revision M$ ever released). Many PCs stay in use a long time (some estimates show XP maybe still be close to 50% of the overall market) and M$ is now going to attempt to change that by stopping their security support for XP despite the huge numbers still in use out there. Windows7 is an improvement over Vista, but XP still gets the biggest bang for the buck for gaming and so it's a hard push when most games still support XP. Apple has the luxury of simply forcing people to buy new hardware by discontinuing operating system support for older hardware and making certain software no longer compatible, creating artificial crisis for many people who then HAVE to buy a new computer. This also tends to force people to update their Apple OS more often (that and the fact it has no protection on it and Apple doesn't care much because that's not where they make their money so they lack the incentive to protect the living crap out of it like Microsoft, particularly when they figure you have to buy your next computer from them anyway.

Do you get all you info from "favored flame bloggers"? Or you just think of this stuff and make it all up in your own little world? You keep on making outrageous bogus claims that everyone refutes and throws you back into your arm chair where you like pretend you decide the fate of the world. lol


Reception
A Gartner research report predicted that Vista business adoption in 2008 would overtake that of XP during the same time frame (21.3% vs. 16.9%)[85] while IDC had indicated that the launch of Windows Server 2008 served as a catalyst for the stronger adoption rates.[86][87] As of January 2009, Forrester Research had indicated that almost one third of North American and European corporations had started deploying Vista.[88] On a May 2009 conference, the Microsoft Vice President said "Adoption and deployment of Windows Vista has been slightly ahead of where we had been with XP" for big businesses.[89][90]

In its first year of availability, PC World rated it as the biggest tech disappointment of 2007,[91] and it was rated by InfoWorld as #2 of Tech's all-time 25 flops.[92] The internet-usage market share for Windows Vista after two years of availability (as of January 2009[update]) was 20.61%. This figure combined with World Internet Users and Population Stats yielded a user base of roughly 330 million,[11] which exceeded Microsoft's two-year post launch expectations by 130 million.[10] The internet user base reached before the release of its successor (Windows 7) was roughly 400 million according to the same statistical sources.

Within its first month, 20 million copies of Vista were sold, double the amount of Windows XP sales within its first month in October 2001, five years earlier.[93] Shortly after however, due to Vista's relatively low adoption rates and continued demand for Windows XP, Microsoft continued to sell Windows XP until June 30, 2008, instead of the previously planned date of January 31, 2008.[94] There were reports of Vista users "downgrading" their operating systems, as well as reports of businesses planning to skip Vista.[95] A study conducted by ChangeWave in March 2008 showed that the percentage of corporate users who were "very satisfied" with Vista was dramatically lower than other operating systems, with Vista at 8%, compared to the 40% who said they were "very satisfied" with Windows XP.[9]

Amid the negative reviews and reception, there have also been significant positive reviews of Vista, most notable among PC gamers and the advantages brought about with DirectX 10, which allows for better gaming performance and more realistic graphics, as well as support for many new capabilities brought about in new video cards and GPUs.[96] However, many DirectX 9 games initially showed a drop in frame rate compared to that experienced in Windows XP. Though in mid-2008, benchmarks suggested that Vista SP1 was on par with (or better than) Windows XP in terms of game performance.[97] At the release of Windows 7 (October 2009) a survey by Valve Corporation indicated that 40.41% of gamers were running DirectX 10 systems. The survey also indicated that DirectX 10 was supported on 83.21% of DirectX10 capable OS’s (Windows Vista, Windows 7 beta and Windows 7 represented 48.56% of the survey) and that 42.27% of these OS’s were 64-bit.[98]
http://en.wikipedia.org/wiki/Windows_vista


And no one is "forcing" you to buy anything. If you want to stay on top...Apple or Microsoft (EVEN Vista as the above clearly demonstrates), you must pay for new stuff. If you're computer breaks, get one on ebay. It's like a car. You can't expect the manufacturer to make spare parts forever. There's a "life cycle" with every product and you should be aware of this...especially if you are going to use it for something "important".

I personally hate having to "wait" for everyone esle to catch up. I prefer developers concentrate on the NEW thing and drop the old. Like forget about XP and screw those ppl. They can use the old version. Instead I have to pay for "backward compatability development" in the price...like DX9 and whatever. At least Windows 7 is just a "surface upgrade" to Vista so mostly everything will be inherantly compatible with both. But at least in gaming, you can see that at the turn of Windows 7, it was like 40%. So you still have ample ppl to play with. If XP was completely dropped in the new games, I bet that number would be like much higher. But that's a business decision, like how Nintendo Gamecube games were made playable on Wii.

 

[Analog Kid]

Wrong, pure and simple. It's already been discussed in great detail, and to blatant rejection of your indefensible arguments, over the past several years. It was expressly rejected by the court when raised by Psystar. Obvious troll is obvious, as the kids say. It can be repeated ad nauseum, even in the face of defeat after defeat, but you will never learn and have never attempted to educate yourself. It's over; your argument is utterly without merit. If you want to be at least in the ball park, talk iTunes; at least Apple has market power there.

For the benefit of readers who are not familiar with this old tirade, naturally related components sold together is not unlawful tying. Having to buy from Apple to get Apple features is not tying any more than having to buy a Magellan GPS to get their software is or having to buy a Mazda to get a rotary engine. Even further, tying is not illegal. Tying with market impact isn't even itself illegal. Selling software for your own hardware is naturally related and thus excluded from the Sherman and Clayton Act provisions.

If Microsoft had gotten into the hardware business and sold its OS only for its own customers, they'd have been in the clear, too. HP does it. Palm and Nokia do it. NeXT did it until shortly before they collapsed. SGI and IBM did it in their time. Microsoft severed the natural relationship by creating a product intended for general consumption; even still, had they chosen to partner with Dell and Acer but not HP or Toshiba or IBM/Lenovo, that too would have been fine (and prevented the formation of the monopoly that they later abused and put them in the hot seat in the first place).

I think your own post has the solution for your unoriginal rants:
"If you cannot follow or don't understand the topic or what's involved in it, then perhaps it would be better to stay out of the conversation."

No, their hardware sales by volume are highly consistent with their overall OS share, at about 7-8%. If each manufacturer shipped an in-house OS, Mac OS would be in fifth place for both categories. In other words, their hardware sales are exactly in line with their overall market share, far from the disproportionate situation you claim.

Microsoft's revenue from Windows is also highly consistent with its market share. They reported about 13B of 58B total from their Windows division in 2009 (about 20%). If you priced the OS X value at $129 per Mac sold, that would work out to about $1.6B or 12% of Microsoft's Windows revenue, which is indeed slightly higher than the 9% you'd expect by market share, except that you can't compare the two because of massive pricing differentials in the products (namely Microsoft's deep OEM discounts [to $50] and steep retail pricing [to $300+]). Still, not the immense disproportionality you claim exists.

The size of the two companies has nothing to do with OS market share. Most (80%) of Microsoft's revenue comes from sources other than Windows. Simultaneously, even if Apple sold all of its computers without an OS and billed full price for every single OS X copy, it would still account for less than 4% of Apple's revenues.

Your entire market share rant is completely irrelevant, in other words.

Indeed it does.

Hey, thanks for this. I'm sure it's been gone over in detail before, but this is the first I've seen the analysis laid out so clearly.

Also, thank you for arguing without putting anything but OS and OEM in all caps.

 

[GamecockMac]

It's funny how the justice department is now investigating Apple based on their <30% share of the music market given there ARE viable alternatives to the EXACT same music

No, smart guy...the investigation is based on Apple's ~70% share of the online music market. Try getting your facts straight before shooting off next time.

And the investigation will go nowhere, just like the one four years ago.

 

[gnasher729]

The problem is not them shipping such a product, but in FORBIDDING (through contract license) anyone else to produce hardware that can run OSX (or rather OSX is not "allowed" to be installed on any hardware other than by Apple, thus forcing the consumer who wants only OSX to also buy Apple brand hardware and thus the "Tying" clause of Clayton is violated. If the market is substantially impacted by that act, it is a violation of Clayton, pure and simple.

Have you learned nothing from Apple vs. Psystar where the same old wrong arguments had been brought up by one troll after the other? Apple doesn't prevent anyone from building any computers capable of running any software. The only thing that keeps Dell from building computers capable of running MacOS X is not anything that Apple does to forbid them building such a computer, it is the tiny legal detail that building such a computer would be a DMCA violation. Apple doesn't care and has no right to care what computers Dell builds, but Apple cares and has the absolute right to care on which computers _Apple's_ operating system can be run.

But if Dell wants to sell computers with a non-Windows operating system, they are free to sell computers with Linux, they could have bought the rights to BeOS cheaply and sell computers with BeOS, or they could have offered $500 million for NexT instead of the $400 million that Apple offered, invested the billion that Apple invested, and called it DellOS X. They barely do the first, and they haven't done the second and third. Their choice.

 

[matticus008]

By law, I SHOULD be able to buy my hardware from a competitor and still buy OSX from Apple and be happy

No. There is no law that says anything remotely similar to this.

Yes, you are wrong pure and simple. Read the law and not the newspaper. "Relationship" has NOTHING to do with it.

The relationship of the two products has everything to do with it.

A manufacturer of printers has NO right to force the sale of THEIR ink or paper on you. Those are also highly related.

No, they're not. "Naturally related" is a legal term of art--a concept that has been explained to you in the past that you refuse to recognize.

Consumables are not naturally related to a general product. This is the essential flaw in the inapposite arguments about "Microsoft gas" or "Canon paper". However, the firmware in the printer is naturally related, as long as it is supplied internally. If you don't like HP's design or hardware, you don't have a right to demand that their software print engine be sold to you so you can put it on a Samsung printer, even if they run the same print controllers and embedded processor architecture.

On the other hand, if there's a company that sells printer firmware for multiple brands, then it's an independent transaction with a third party and thus not naturally related, and that bundling can, under the right conditions, be in violation of competition law. But the simple act of doing it is never illegal, contrary to your unsupported insistence.

webOS runs on many current smartphones. Having to buy Palm hardware to get it is not a case of illegal tying. Having to buy a Tivo box to get the Tivo DVR software is not illegal tying. Desirable distinctive features cannot be forced into a separate market just because people would prefer to have it available separately.

This has been explained to you by multiple people, with citations and far more detailed analysis--so stop trolling. You've never been able to establish any support for your argument

This also has been settled in court, but you and others ignore that and instead focus on a Bush-Era judge who has allegiance to big business.

Hilarious! William Alsup was an attorney in the--wait for it--antitrust division of the Department of Justice, and was appointed to the federal bench by Bill Clinton. Unlike you, he knows what he's doing.

It's funny how the justice department is now investigating Apple based on their <30% share of the music market

(A) they're not investigating anything yet. They've held an inquiry. (B) Apple has a 70%+ share of the digital music market.

The fact one judge is corrupt does not change that fact.

You are utterly delusional. No support, no coherence, no understanding of the law--must be a corrupt judge (despite a long and distinguished record of upstanding service to the judiciary) and not that you're flat-out wrong.

Tell you what. Put your money where your mouth is. If it's such an obvious case, sue Apple. There should be a limitless number of firms willing to foot the bill for such an open and shut case; you'll have no problem finding one if you're right. Kind of a mystery why no one has thought of it before, or why none of the previous suits have gone anywhere, including the high-profile Psystar case. Hmm...maybe there's something you're not seeing.

Those are two separate markets. You're comparing hardware sales of Apple to hardware sales of Microsoft.

No, I'm comparing hardware sales of Apple to hardware sales of other retail computer vendors.

Those are separate industries and Apple just happens to dabble in both. That's fine, but that doesn't give them the right to tack a contract onto OSX that says 'to use this, you MUST buy OUR hardware ONLY' and that is exactly what they have done and that is a violation of Clayton whether you believe it or not.

It does. The Clayton Act doesn't say what you think it says. The fact that Microsoft made a business out of selling its OS to any hardware builder who wants it does not mean that all operating systems have to be sold to anyone who wants them. Microsoft's business model does not force anyone else's.

Do you even know what you wrote? You just told me that Windows sales are highly consistent with Windows sales!!!!

I understand what I wrote, but apparently you don't. If your idiotic rant about OS market share and company size had anything to do with anything, Microsoft would be one-fifth the size it is. In other words, revenue from operating systems is not the reason either company is the size that it is.

Apple gets 100% of those sales while HP, Lenovo, etc. have to fight each other for their share.

Apple gets 100% of Apple sales? Shocking! If HP decided to turn webOS into a full desktop operating system, stopped selling Windows, and shipped all of its computers with webOS, they'd be in the same situation as Apple.

They've decided not to go that route because Windows drives sales for them. It's the same reason all the major vendors do business with Microsoft. They're not required to--they could all invest in developing an in-house OS, which they could then sell only to their customers.

While Apple's OS market share is smaller, their hardware share is huge because they get it all

Apple's OS market share and hardware market share are identical.

My point [...] is that I don't want to give up OSX, but I do not want Apple's desktop hardware choices either

No, your point is that you have a deluded belief that because you want it, some fictional universe should exist where they're required to give it to you. What makes you a troll is that instead of being satisfied by saying "I don't like the choices Apple offers", you cry and whine and lie about laws being broken and a false legal entitlement to unicorns and a life of perfect choices.

Hey, thanks for this. I'm sure it's been gone over in detail before, but this is the first I've seen the analysis laid out so clearly.

Also, thank you for arguing without putting anything but OS and OEM in all caps.

No problem. Incorrect information bugs the hell out of me, even if presented in a clearly absurd manner like this. And feeding the trolls is a weekend hobby.

 

[gnasher729]

Apples earnings are impressive but not impressive enough to warrant such a high stock price. If they were that impressive, the P/E ratio wouldn't be so high. Perhaps if you got in in the 80's or 90's or even early 00's when the stock was low you could make some money but short term investing really only works for the super rich or well connected. For those that don't have millions of dollars to invest, or the amazing foresight to predict AAPL's rise from 2$ to 275$ a share, there are safer more affordable options that offer better long term benefits. AAPL is probably, though not definitely, a fad stock.

Apple's profit in the last year was about 4.5% of the share price. Assuming that Apple's profits stay constant for the rest of time, investing into Apple shares is about as good as investing your money in a bank account returning 4.5% every year. Except that it is unlikely that Apple's profits stay constant, and it is not 100% sure that the bank will continue to pay you interest or will be able to return your investment. The forward P/E (based on the assumption that profits of the last quarter will be repeated, not profits of the last year), is 16.58 equivalent to slightly over 6% interest.

 

[Battlestar]

Apple's profit in the last year was about 4.5% of the share price. Assuming that Apple's profits stay constant for the rest of time, investing into Apple shares is about as good as investing your money in a bank account returning 4.5% every year. Except that it is unlikely that Apple's profits stay constant, and it is not 100% sure that the bank will continue to pay you interest or will be able to return your investment. The forward P/E (based on the assumption that profits of the last quarter will be repeated, not profits of the last year), is 16.58 equivalent to slightly over 6% interest.

This is not correct. Apple does not pay dividends so investing in it is not equivalent to putting money in the bank at 4.5% or 6%. When you put your money in the bank your principal is not at risk (FDIC and Private Insurance) when you invest in Apple it is.

Apple does well because of the quality of their products and marketing, at some point someone will build a better mouse trap and start taking their market share. It always happens.

At present they also have way to much exposure to the U.S. consumer and when inflation is realized in consumer prices within the next few years they are going to take a haircut.

 

[GamecockMac]

Apple does well because of the quality of their products and marketing, at some point someone will build a better mouse trap and start taking their market share. It always happens.

Yep, only been hearing that tired line of FUD since 2001 when Apple introduced the iPod (260 million+ sold), and since 2007 when they introduced the iPhone (50 million+ sold). Still waiting to see that "better mouse trap" that so many people keep spouting off about. If I had a dollar for every "iPod/iPhone/iPad Killer" article or forum post I've read over the past nine years, I'd be a rich(er) man.

At present they also have way to much exposure to the U.S. consumer and when inflation is realized in consumer prices within the next few years they are going to take a haircut.

Yeah, yeah...we get it. You believe that the dollar is going to collapse after mega-inflation sets in. Great. Your belief in this theory doesn't make it true before the fact, so stop pontificating like you know something the rest of the world doesn't. Stating economic opinion in the manner you are, only leads to making a person look stupid. You might as well get on here and tell us all who will win the Super Bowl in each of the next few years, or how many Category 5 hurricanes will hit the U.S. coast in that same time period, or that the Mayans were right and the world will end in December 2012.

 

[MagnusVonMagnum]

No, smart guy...the investigation is based on Apple's ~70% share of the online music market. Try getting your facts straight before shooting off next time.

And the investigation will go nowhere, just like the one four years ago.

Sorry, but music is music. CDs are digital too. WTF is the difference whether you get the bits "online" or through a brick and mortar store? Essentially, NONE. No one has stopped anyone else from offering digital music online either (even the EXACT same format and rates if they want), so there is no case. Sherman/Clayton states quite clearly that even a monopoly formed by preference (rather than someone trying to prevent competition) is allowed and why not? If you like something better, you should be able to choose it. Most of the usual suspects on here cannot seem to get ANY of their facts straight. My point is the justice department can call their investigation any way they like but it doesn't change the facts that Apple represents only about 1/3 of overall music distribution. Given the TOTAL AND COMPLETE HYPOCRISY on here regarding the Psystar case and what not, I find some of the comments on here highly amusing. It's "bad" if Apple sells too much music for the industry but it's good if the consumer has NO CHOICES for hardware and has to pay inflated hardware prices because no one else is allowed to compete with OSX hardware.

Do you get all you info from "favored flame bloggers"? Or you just think of this stuff and make it all up in your own little world? You keep on making outrageous bogus claims that everyone refutes and throws you back into your arm chair where you like pretend you decide the fate of the world. lol

Gee, I dunno. Do you make up all the abstract drivel you post on here or do you get it from some Rain Man blog site?

Seriously, nothing you posted even seems to relate to what I said at all. In fact, it really meanders all over the place, with no clear direction or focus on WTF you are trying to say. You post bits about how Vista was poorly received and yet how much better it sold at first than XP, but then Microsoft continued to sell XP because it sucked yet some gamerz with their heads up their butts liked it because of the promise of DirectX 10 yet no games utilize it and yet you say the heck with XP users; they can rot while you buy new hardware so you can have bragging rights over yourself and your old killer system that is bested by your new killer system.... WTF!?!?

What ANY of that has to do with how Microsoft controls its market to force software sales versus how Apple does it to force hardware sales, I couldn't really say. What I do know is that Apple didn't get to be #2 ahead of Microsoft by selling 9% of the world's operating system sales compared to Microsoft's 90% . They got it selling hardware that has no direct 1:1 competition. But then I'm just "making it up" so don't mind me.

 

[Battlestar]

Yeah, yeah...we get it. You believe that the dollar is going to collapse after mega-inflation sets in. Great. Your belief in this theory doesn't make it true before the fact, so stop pontificating like you know something the rest of the world doesn't. Stating economic opinion in the manner you are, only leads to making a person look stupid. You might as well get on here and tell us all who will win the Super Bowl in each of the next few years, or how many Category 5 hurricanes will hit the U.S. coast in that same time period, or that the Mayans were right and the world will end in December 2012.

Your continued responses here are showing nothing but your total lack of understanding of basic economics.

From another thread you stated that a true economic boom resulted from 70% consumption based on debt. You did this not only by stating it but also by posting the GDP numbers for several years.

Can you name me one debt. based over consuming economy that monetized its debt that didn't have its currency collapse?

I am not saying that I know something that the rest of the world doesn't as there are many people who have the same view of what is going to happen to the U.S. dollar. These happen to be a lot of the same people who called the dot com bust and the real estate crash. You just keep on listening to all of the people who keep saying that there is a recovery going on and everything will work itself out.

Government spending in the 1930's did nothing to end the great depression, but is it going to work now?

If you can't come back with a valid point on how the actions of the U.S. government will not harm the dollar and not lead to inflation being realized in consumer prices then don't bother replying with your same old broken record responses that have no substance.

Here is a better one for you. Where are all of the jobs for the so called recovery? Economic growth always creates jobs so where are they. Governement jobs do not count as economic growth.