Nya, nya, nya

Apple is now worth more than Dell.

Dell makes a lot more computers. But they are worth a lot less.

Apple makes better computers. And that is worth much more. Even Wall Street figured that out. MacDailyNews reports [via my son]:

On October 6, 1997, in response to the question of what he’d do if he was in charge of Apple Computer, Dell founder and then CEO Michael Dell stood before a crowd of several thousand IT executives and answered flippantly, “What would I do? I’d shut it down and give the money back to the shareholders.”

A little more than a month later, on November 10, 1997, new Apple iCEO Steve Jobs responded, speaking in front of an image of Michael Dell’s bulls-eye covered face, “We’re coming after you, you’re in our sights.”

Today, after a little more than eight years of hard work, Apple Computer, Inc. passed Dell, Inc. in market value. That’s right, at market close Apple Computer ($72,132,428,843) is now worth more than Dell ($71,970,702,760).

I told you to sell.

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  • http://marginalizingmorons.blogspot.com/ CaptiousNut

    Jeff,

    Did you tell us to sell Dell AND buy Apple?

    Apple overtook Dell this year because of a huge surge in its price – not because Dell dropped that much.

    http://finance.yahoo.com/q/bc?s=AAPL&t=2y&l=on&z=m&q=l&c=

    http://finance.yahoo.com/q/bc?t=2y&l=on&z=m&q=l&p=&a=&c=&s=dell

    But I guess people always see what they want to see.

    The iPod is a fad, at least as it is currently priced and bought. Soon people will tire of paying for music, illegal file swapping is already gaining renewed traction, and the portable MP3/Video player will be commoditized either by cell phone companies or Dell.

    In May Apple was half the value of Dell. A year and a half ago it was a quarter of its size.

    Two years ago it was 1/8 the size.

    I challenge all Apple trumpeters to buy the stock here at $85 a share.

  • Ted

    Exactly right.

    Until last year we had never, ever bought an Apple product.

    In 2005 we purchased both an IPod Shuffle and a Mac Mini.
    And a MightyMouse. And an Apple Keyboard.

    This year we are likely to purchase another Mac Mini. And
    an IPod Nano.

    Kudos to Apple! Kudos to Steve Jobs!

  • http://www.laurencehaughton.com laurence haughton

    Apple has been worth more than Dell many times over the last 25 years. And there have been periods where the positions have been reversed. The same can be said for stock after stock. I guess that means that Wall Street is not sure what it thinks (and what it values) except for a few days at a time.

    I’m personally thrilled for Apple. I’ve been a big fan since the days of Apple DOS. I’ve also been perplexed by Apple’s many stumbles and self-inflicted wounds. Have they learned their lessons? Or will it be (as a friend once said) “In the long run, there will be no long run?”

  • http://deadnewspapers.blogspot.com/ Gutenberg

    I’d argue that Apple really is a consumer electronics company that makes computers (a la Sony) and really doesn’t play in the same space as Dell (or HP, which is now only worth a little more than Apple, despite having much more revenue).

    For Apple, its most recent annual report shows $5.44 billion in iPod/music-related revenue, $6.28B in desktops/laptops, $1.13B in peripherals, and $1.09B in software. That puts consumer products at 39% of total revenues.

    Music-related sales are increasing about 240% year over year, while everything else is growing around 27%. Let’s say that the music stuff will now grow at half that rate (worldwide music sales and device sales simply aren’t big enough to accommodate a 2.5x increase for another year). Using that logic (since Apple hasn’t year released its Q1/06 numbers (which are calendar Q4/05), consumer music products and services will be 53% of revenue, while desktops and laptops will be 35%. This is not assuming the inevitable stall that Apple will experience in computer sales the first half of the year with PPC technology languishing on the shelves while the processor change gears up (I spoke with an Apple corporate rep this week who told me about large customers pulling PPC orders upon hearing of Job’s announcement in order to figure the whole thing out).

    Saying that Apple is better than Dell based on market cap is like saying that Google is better than any other company worth less (which essentially is the entire NYSE and NASDAQ save a few companies). Time travel back to 1999 to see how flawed that is.

    I would admit that Apple is a far superior marketer than Dell, able to squeeze the maximum value out of buzz, while Dell is a much better executor (it had a much wider product base and can consistently deliver). They also have had diametrically opposed business strategies, in that Apple makes its money by creating brands out of commodities, while Dell made commodities out of others’ brands (more so in the early days). Coca Cola is worth nearly $100 billion, but few would argue that this is a result of marketing and brand management and less due to the quality of its brown sugar water. Wall Street is an odd place.

    Jarvis can “nya nya” all he wants, but let’s see who’s left standing in a few years. Apple’s ascension is patently unsustainable and after a quarter or two of its inability to “feed the bear” in Wall Street parlance, its valuation will be cut down to size.

  • Mike G

    The iPod is a fad

    A consumer product that sells 40 million of something is hardly a fad, if that word has any meaning. Now, it may well be a product that has a limited time when it will be popular– like, say, the phonograph record, the cassette tape, the AM transistor radio, the CD, and so on. So yeah, if Apple fires all their R&D people and says they plan to make them for the next 100 years no matter what, sure, you better sell.

    I’d argue that Apple really is a consumer electronics company that makes computers (a la Sony) and really doesn’t play in the same space as Dell

    Yes, exactly– except that you seem to see that as a negative. Apple is innovating consumer-friendly uses of computer technology, making things that do computer stuff without looking like or being computers. Other makers are still stuck in the 80s-90s paradigm of building commodity boxes for corporate buyers. One business commands huge margins, the other one razor thin ones. Which would you rather be in?

  • Eric M

    Gotta love Jobs – for all his faults he’s doing something right.

  • http://v-gb.fatal.ru/s/ bob

    I’m personally thrilled for Apple. I’ve been a big fan since the days of Apple DOS. I’ve also been perplexed by Apple’s many stumbles and self-inflicted wounds. Have they learned their lessons?

  • http://marginalizingmorons.blogspot.com/ CaptiousNut

    MikeG,

    The iPod is not a fad but,

    “…it may well be a product that has a limited time when it will be popular.”

    I guess you must have your own personal definition of a fad.

  • http://www.bloodandtreasure.com Noel Guinane

    Apple’s ascension is patently unsustainable

    PC people have been saying that about Apple for decades, but somehow Apple keeps coming up with new ideas, new ideas that drive the industry.

    Even Michael Dell, the famous ‘fold up and sell out’ guy wants to license the Mac OS. Good luck to him.

    It’s not better marketing. It’s better products (though my favorite ad line of all time has to be Hell Froze Over put up on Apple’s website when they started offering iTunes for the PC).

    Guttenberg, stop tyrannically inflicting PC’s on your people. Buy them Macs. Not only will they love you, it will be so much easier for them to get their work done without their files disappearing, programs freezing, network crashing etc … unless of course you enjoy watching them suffer. ;-)

  • Mike G

    MikeG,

    The iPod is not a fad but,

    “…it may well be a product that has a limited time when it will be popular.”

    I guess you must have your own personal definition of a fad.

    Was VHS a fad? It sold billions of cassettes and had a 20-year life. Was it a fad? Or just a product with a life cycle?

    If it was a fad, is the internal-combustion engine? I doubt we will still be driving gas cars in 50 years. It will have had a 150-year life, then, does that make it a fad? How about the candle? How about the ox-driven plow? A few thousand years, then– gone. Replaced.

    I don’t have a precise definition of a fad, but it seems to me that a fad lasts a season, maybe a year, and leaves little imprint when it’s gone– pet rocks, Beanie Babies, Callanetics, that sort of thing. When something lasts a decade or more, when it has genuine cultural impact, when it changes the nature of a significant industry, it’s more than just a fad.

  • w

    it will be so much easier for them to get their work done without their files disappearing, programs freezing, network crashing etc … unless of course you enjoy watching them suffer.

    is this still the line of bs coming out of pro-apple folks mouths? it’s one thing to like a product, but don’t embellish. i’ve had a pc for years and none of that happens, i just think it was uttered once and you folks just keep repeating and repeating it cause it makes you sound in the know. just say you want to be cool and your cool crowd likes apple k? hey my apple can do email too, ohhhh ahhhhhh, it’s so like different, i click here instead of there.

  • http://www.bloodandtreasure.com Noel Guinane

    w hasn’t been online much with his PC. Virus is something he associates with the flu. Having had a decade and a half of experience on both platforms – PC and Mac – I know which is better and it sure as hell ain’t the PC. And I liked Macs when Macs were seriously ‘uncool’.

    Nice try though.

  • http://marginalizingmorons.blogspot.com/ CaptiousNut

    Noel,

    The entire business world is patently dumb to use the PC platform?

    Very interesting.

    It’s almost comical how the iPod is now wrapped up in identity politics along with Starbucks, hybrid vehicles, and Whole Foods.

  • http://www.bloodandtreasure.com Noel Guinane

    The entire business world is patently dumb to use the PC platform?

    Yes.

  • Alfred Langen

    Wow!

    I have been an Apple hater ever since 1978 when I was not allowed to touch the keyboard in a BYTE shop. The demo was held in a glass cage with users looking on from six feet away. A month later, I bought Radio Shack’s TRS-80.

    I have purchased 8 PC’s from DELL over the past 7 years and in the past year I have had two very bad experiences.

    Now that Apple has introduced it’s INTEL base machine, maybe this is a better alternative than HP Pavilion.

    DELL Support used to be fantastic. Now, it is frustrating. The DVD CD-Rom drive that they installed in the latest machine has a chip that is supported only by the driver supplied by DELL. What next?

  • DB

    Sadly, I just had a TERRIBLE experience with Dell’s so called “customer service”. My calls were dropped FOUR TIMES after 25-30 minute waits each time. FINALLY, I tried their website and got a notice that I was Number 63 on the waiting list. So, I again called Dell’s support number and after a 95 minute wait, spent an hour taking my computer apart (this was for a black non-responsive screen on a laptop). I was told if I didn’t have an appropriate screwdriver, they would mail one to me, by the way. Finally they said they’d send a box for me to ship the computer back to them for repair. I now own four Dell computers and have bought five computers from Dell. I have bought my LAST Dell computer. I lost an entire day of my life dealing with rude, crass and sarcastic technicians and this will not happen to me again.

  • Jackster

    DB: I’m surprised you were able to make heads or tails of what they said. They’re called English-speaking Indians, but you could’ve fooled me. I wasted 1 hour of my valuable time trying to get them to send me a couple of disks that should’ve come with my machine. I went thru 5 different individuals before I could get one who, when REPEATEDLY reminded, spoke slowly enough for me to understand her. Oh, by the way, Dell’s transferring 20,000 MORE jobs to India. Wowzerootie! Also, I’m still waiting for that rebate card they said they’d send me 2 weeks ago. It’s supposedly worth $75, but I’m weighing whether or not it’s worth another hassle with those foreigners. Anyway, this is the LAST Dell I get. There’re competitors out there and I’ll be buying from them from now on.