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Print 42 comment(s) - last by weskurtz0081.. on Aug 21 at 11:11 PM

Apple's market cap surpasses Microsoft in its 1990s hey-day

CNN Money carried an interesting story on Monday entitled "Apple is now the most valuable company of all time".  Similar headlines soon abounded.

Indeed Apple, Inc. (AAPL), despite a "bad" quarter which would be cause for celebration for just about anyone else, has soared in value over the last decade with the success of the iPod, then the iPhone, and most recently the iPad.  From 2000 to present, shares increased from a market cap of $8B USD to $623B USD.  For comparison's sake gold -- typically consider a massive commodities success story -- has only ballooned from $238 USD per oz. to $1640 USD per oz. at last count.

So when Apple's soaring stock set a market capitalization record of $623B USD (at $665.15 USD/share) -- more than the $618.9B USD Microsoft was worth (according to investors) in Dec. 30 at the height of so-called "dot com bubble".

But for all the streamers and confetti, the claim that Apple is the "most valuable of all time/in all of history" isn’t accurate.  Value is based on the worth of the currency at the time.

Siri
"Siri, who is the most valuable company in all of history?" Ding ding.. "In today's dollars Microsoft in 1999 would be." [Image Source: AP Photo]

In 2010 dollars, Microsoft's $618B USD valuation would be over $820B USD.  While inflation data is still being finalized for last year, it would likely be somewhere in the ballpark of $850B USD in today's money (The Columbia Journalism Review says $856B USD in today's money, although it admits to goofing by saying that International Business Machines, Inc. (IBM) in 1967 was the most valuable, failing to realize that the data it was working off of was already adjusted).  

The headlines are particularly troubling, given that even a simple Wikipedia search would have revealed the truth (Wikipedia pegs Microsoft's peak value at $846B USD in today's money).

In other words, Apple still has to grow by another third in order to truly become the most valuable of all time.

Still, it is fair to lavish Apple with some praise.  The company was most profitable tech firm for 2011 and third in total profits.  For 2012 Apple is expected to be the most profitable American firm.

Those profits could soar even higher if Apple succeeds in its court bid to ban rival Samsung Electronics Comp., Ltd.'s (KSC:005930) devices from the American market -- the world's most lucrative and second largest smartphone market.

But Apple has a long hard road ahead to become truly the biggest company in history.  For now, it is merely in a small crowd of historic elites.

Sources: CNN Money, CJR



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By mocyd on 8/21/2012 12:59:33 PM , Rating: 3
Apple exist in a market where there is healthy competition and are not necessities. Typically, people purchase the product once a cycle (usually a year), and can forgo a cycle if need be.

Oil companies exists in a market where there's not healthy competition against their product, the cost of producing infrastructure and migrating energy users limits the entry of new competition, and speculation works to keep prices up on a a product that is more of a necessity to our economy. The purchase cycle is much shorter for oil (at least once a week for most poeple) and most can't forgo the purchase without suffering major financial impact.

There's a HUGE difference. Our economy is hostage to oil, so when an executive makes millions to billions in a year, yeah, everyone should be pissed because we don't have much of a choice.

Our choice with oil is on par with our choice in paying taxes. The difference is that taxes go to benefit everyone, including the rich, while oil profits only benefit oil executives and speculators.

Big effing difference.


By 91TTZ on 8/21/2012 1:38:23 PM , Rating: 2
quote:
Oil companies exists in a market where there's not healthy competition against their product,


This isn't true. There is a lot of competition in the oil and gas market. In the list of the top 10 companies by revenue there are 6 different oil and gas companies. Those are a lot of strong competitors all competing against one another.

Meanwhile in the smartphone market there are only a couple of big players. While there are many companies that sell smartphones, Apple and Samsung make 90% of all the profits. Oil is a commodity and goes for a commodity price. There isn't much brand loyalty in such markets. Buying gasoline is like buying bottled water or buying produce. Yeah, you probably need it but you can go anywhere to get it.

quote:
There's a HUGE difference. Our economy is hostage to oil, so when an executive makes millions to billions in a year, yeah, everyone should be pissed because we don't have much of a choice.


Apple- Tim Cook's 2011 compensation: $378 million
ExxonMobil- Rex Tillerson's 2011 compensation: $35 million

You have just as much choice to buy Apple's products as you do about buying ExxonMobil's products. Don't like Exxon? Go to the BP station across the street. Don't like either of them? Go to the Sunoco station down the block.

The fault in your entire argument is that you're treating oil companies like they're all the same company just because they all sell oil and fuel. They're merely competitors in the same market. Blaming Exxon for your dislike of BP is like blaming Samsung for your dislike of Apple.


By Dorkyman on 8/21/2012 1:46:06 PM , Rating: 2
Disagree with some of your points.

There is a tremendous amount of competition within the oil industry; I can assure you that BP would LOVE to increase their market share at Exxon's expense. Outside that industry I guess you can argue that there isn't much competition (solar, wind) but that's because oil is a remarkable substance, a densely-packed yet relatively inexpensive energy source that is useful for thousands of applications. And the delivery infrastructure has been in place for many decades.

Oil prices are set by the interaction of numerous market forces including availability, quality, risk of supply interruption, delivery cost, and demand.

As to your belief that taxes "benefit everyone." I'm guessing you a Big Government guy, where all us little people are cared for and protected by an all-knowing and wise bureaucracy--right? And your notion that oil profits "only benefit oil executives and speculators.." Sounds like something lifted out of Pravda.


By ritualm on 8/21/2012 2:00:58 PM , Rating: 2
Wrong.

There is little competition, in fact you are crazy to increase production - and thus, supply - for a necessary commodity when you can make more money with less produced. Consumers hate high spot prices for gasoline, but what other choices do they have? EVs are barely viable as is, and only good for those rich enough to afford detached housing with their own electrical outlets to top up their motorized babies overnight.

High oil prices deal more damage than a roundhouse kick to the money books of oil-consuming nations everywhere, and the only folks who benefit are 1) oil producing states, 2) oil companies, and 3) speculative commodity traders. All three want oil prices as high as possible without risking total financial meltdown.

You are the one smoking crack.


By Ringold on 8/21/2012 2:27:11 PM , Rating: 2
quote:
There is little competition, in fact you are crazy to increase production


Yep, which is why they plough hundreds of billions of dollars in investment in hostile environments in odd corners of the planet. Maybe it's a little more complicated, huh?

Then look at our domestic gas market.

In a competitive market, and oil with its number of different actors is competitive, supply will expand until price equals marginal cost. Thats what we see domestically, and internationally one of the only countries with any slack capacity is Saudi Arabia, and its debated how much they have. The rest of OPEC in theory has slack, but in practice appear to pumping flat-out, OPEC production quotas be damned.

Some people just can't see past their own indoctrinated hate.

The only caveat to all this is that the worlds largest oil producers are state-owned, and light-years behind private firms in efficiency and technology. But still, you don't know what you're talking about.


By ritualm on 8/21/2012 2:37:54 PM , Rating: 2
Care to explain how many new oil refineries were built in the past decade?

The answer? You can figure out with your fingers alone.

Why produce more supply when you're already laughing all the way to the bank?


By weskurtz0081 on 8/21/2012 3:37:14 PM , Rating: 2
So, you think the oil companies haven't made new refineries because they are trying to keep the price of oil high?


By Ringold on 8/21/2012 7:09:47 PM , Rating: 2
Notice too another sign he doesn't know what he's talking about: lumping oil companies in with refiners. In a lot of cases, oil majors have spun off their refinery operations over the last couple decades, so they two groups are fairly distinct sectors. Independent refiners would love cheap oil to get unloaded at their terminals. But all he knows is he hates capitalism and traditional energy sources, he doesn't know any details.


By Ringold on 8/21/2012 7:04:42 PM , Rating: 2
quote:
Care to explain how many new oil refineries were built in the past decade?


Thanks for asking! Fantastic question! Why don't you tell me how many NEW refineries were attempted to be built in the US over the past decade, but failed in the face of environmental protests?

I know of at least 2 large ones. You apparently know of none, otherwise you'd of not asked such a retarded question. You don't know what it is you propagandize on.

Furthermore, refiners are hardly laughing all the way to the bank of a regular basis. They've mostly been tooled for light-sweet crude, of which we're able to get our hands on less of, so they've had expensive upgrade costs to handle more sulfur-laden oil. The crack spreads between a barrel of oil and what they can get for its resulting distillates has many times over the last 10 and 20 years been awful.

And despite all that, we export a small amount of refined product, so they make enough to satiate local demand, if not be a major exporter. We have the technical expertise so could easily be a major exporter, but again, missed opportunity -- economic green terrorists.

Again, you appear to not know anything besides what some 30-second left-wing attack ad might've told you, or some Marxist at Huffington Post. Got any other ridiculous assertion though, or give up?


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