Market Caps and Competition
News Analysis. Take this one to the bank. Apple's market capitalization is bigger than Google's. |
So claims John Paczkowski, in a blog post over at All Things Digital this evening. OMG. He's right.
According to Yahoo Finance, it's $157.23 billion for Google and $158.84 billion for Apple. Microsoft is still much larger, with market cap of $254.83 billion.
For today, Apple has something big over Google: Market capitalization, and it's no small feat. I haven't fully crunched the numbers, but it looks to me like Apple's gains are as much about Google's losses. As recently as November, Apple's market cap was around $143 billion and Google's about $196 billion. But these numbers hugely fluctuate depending on share price and trading volume. According to MacNN, Apple's market cap surpassed Google's in August of last year, too. Apple may not lead Google for long.
There's a cruelty in the share prices: Apple closed at $179.30 today, Google at $500.03 and Microsoft at, gulp, $27.91. Microsoft's shares are stuck at year 2000 levels, and they're simply going nowhere fast.
Yet Microsoft has larger market cap and pulls in more revenue and profits than either Apple or Google. In the second calendar quarter, Microsoft revenue topped $15.84 billion, with operating income of $5.68 billion. By comparison, Apple revenue was $7.46 billion, with net profit of $1.07 billion. And Google: $5.37 billion in gross sales and $1.25 billion profit.
By nearly every measure, Microsoft dwarfs Apple and Google, except in its perennially deflated share price. Yet Apple and Google are favored brands and public companies investors favor more than Microsoft. It's a strange condition, Microsoft's share price malady. Its cause? Microsoft has a perception problem, and it's huge.
I remember the mid-1990s, when Apple was performing poorly and public perception had it doing worse. Apple could do no right, and there were ongoing news stories about the company's demise or acquisition by another company. In business, perception is everything.
Microsoft is quite a good performer but is dogged by negative perceptions. There's perception that Windows Vista sucks—a view probably shared by many of this blog's readers—and that Microsoft is already defeated by Google and other Web 2.0 platform companies. Those perceptions are wrong, by the way. Microsoft is an enormous growth company, and it's a fighter.
What Microsoft needs is a marketing makeover, a revitalization of its brand—and that's not easy because there is no one Microsoft brand for people to identify with. Microsoft doesn't even have a company logo. There is no cute icon by which the company can be identified.
The stock market reveals just how important is brand identity. It's no coincidence that public companies most favored by investors also have strong brand identities. Wooing investors is about instilling the public with confidence about the company. Strong branding is one of the most important methods.
Oh, this is Apple Watch, so perhaps the Microsoft topic seems far afield. But it's not because Apple is quickly becoming a competitor Microsoft will have to reckon with. The signs are so many, such as Mac market share increases, iPod's success and the iPhone platform.
Microsoft is obsessed with Google and search, when Apple should be much bigger concern. Microsoft has already lost the search wars. Google won. Search and online advertising are overrated, anyway. Search is only as good as the means of accessing it, which has been the PC.
But the PC isn't the future. It's the past. The platform of the future, the one Microsoft needs to be a player, is the mobile phone. Microsoft needs to worry more about the mechanism by which most people will consume search and advertising. Google understands, which is why it's developing the Android phone platform. Nokia understands, which is one reason for buying the rest of Symbian. And Apple really gets it. The iPhone 3G isn't really a cell phone; it's a portable computer that can make phone calls. Apple's mobile is a platform, and it's one Microsoft should really be concerned about.
Instead, Microsoft is looking the wrong way, at Google and search, when Apple, iPhone and the mobile platform demand more attention. Right now, Windows Mobile is as moribund as Microsoft's stock price. If Microsoft doesn't get its ass moving—and soon—in another year or so I may be blogging about Apple surpassing Microsoft's market capitalization.
[Please send your tips or rumors to watchtips at live.com].
Comments (4)
The PC is the past, and the PC is the future.
With it's miniscule screen and tiny keyboard, the mobile phone will remain fundementally unsuitable for most applications.
Posted by JohnJ | August 14, 2008 11:31 AM
Sorry JohnJ, it won't. We are privileged to watch the birth of new platform that will change the way most people use the internet. Sure, if you're a knowledge worker, it will remain PC at the office. But when the worker gets in his car and goes home, the handheld platform will be the way most people consume the web in the near future.
Perhaps an analogy will help:
At the time of the introduction of the telephone, the primary method of rapid business communications was messenger services and the sending wires. The phone was nothing but a high tech plaything, not meant for real work. It was obvious how the new phone should be used: you call the messenger service with your message, they transcribe it, put it over the wire, and have your message reconstituted to paper and hand delivered to your recipient at the other end. The thought of person-to-person calling didn't occur to business people or the messenger services at first.
A revolutionary new platform or tool causes a elemental change in the way we work or play. Just look for the companies making buggy whips or delivering telegrams.
Sites will redesign and become more small-screen frendly. Imagine you have an ecommerce site and 60% of your traffic comes from small screen platforms. You can bet there will be shift, and sites will redesign to accomodate.
Posted by dev | August 15, 2008 3:47 AM
Although I am a long time Mac user, I do believe it is important for Microsoft and Windows to be successful in the PC market. Having the largest PC OS be American in origin is important.
It's too bad that Microsoft squandered its money, its time, and its reputation on Vista.
It is very much their own fault, so its sad. It's very hard to understand how Microsoft could have gone so far afield.
Maybe the bottom line is they got too greedy with all of the versions and the high cost. They shouldn't expect their customers to pay for all the wasted time, mistakes, and money they spent developing Vista.
I hope they get back on the right track. I wouldn't want Mac to be a monopoly either. Absolute power corrupts absolutely.
Posted by charley | August 15, 2008 1:53 PM
And Charley not to say what it has cost the new PC users in down time and frustration with the installed Vista. Apple is sitting back smiling while their sales keep climbing.
Posted by Jim | August 22, 2008 8:15 AM