Of course investors aren't rewarding them for an upcoming VR headset which is yet to be proven. Why would they?
They are forced to by their hardware business model. Almost every entry point to the Apple ecosystem is through hardware and nobody can meet QC and scale of Chinese factories. Too much of a risk to block China and risk supply chain disruptions.
... then i just got an email receipt from my xbox gold subscription. curses!
What's the story behind your key?
That "single device company" makes just half of its revenue from iPhones. Recurring services revenue accounted for almost 25%.
They can structure their financial reports however they like, but it doesn't change the fact that their entire ecosystem is directly or indirectly tied to that one device.
One way to think about this is that Apple isn't diversified enough. Another way to think about it is that Microsoft's long tail is a mess.
Would they? Microsoft also own other stuff they monetize like GitHub, Linkedin, X-Box, and a shit tonne of gaming IP inclusing Activision Blizzard, plus other things I'm surely forgetting.
Looks pretty diverse to me comapred to a company who's revenue stream is limited by the ammounts of walled garden phones it can sell and who's grasp over its walled garden can be regualted away by the EU waving their wand the same way they lost the Lightnig cable revenue stream.
Can Apple keep up this momentum in the long run and keep growing by getting people to buy more expensive stuff, or will they slowly loose steam and stagnate?
Office and Azure make up half of their revenue, but their other revenue streams are actually different things, like Windows, gaming, LinkedIn, Bing advertising. It's actual diversification.
With the introduction of IE in 1995 and its deep integration into Win95 and ruthless take-no-prisoners assault on Netscape, Microsoft was probably already aware that they were starting to resemble a monopoly, given Apple's poor sales and market share at the time. My personal take is that MS propped up Apple to help appear to have a competitor ahead of the Antitrust action in 2001[2].
[1]https://www.cnbc.com/2017/08/29/steve-jobs-and-bill-gates-wh...
[2]https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....
I'm _pretty_ sure Apple could have gotten the money from elsewhere if they really had to. It's history now, so we'll never know for sure, but I'd bet that they could have found other investors if they really had to. People seem to think it's a black and white scenario - money from MS or death! But I don't think it ever was.
They were already on a bit of a shaky nail for a while when they relied only on Office and Windows, but their shift to the cloud (and resultant cuddly Embrace of Linux) has paid off well for them, so overall a smart move on their part.
In ~theory~ such an announcement would be priced into the markets since market capitalization is also dependent on future expected returns.
Maybe investors just don't think everyone will be wearing $3000 digital fisheye goggles in a few years.
https://www.barrons.com/livecoverage/apple-wwdc-2023/card/ap...
Also Microsoft is still selling HoloLens but for selected audience.
Honest question: does Wall Street care? In my experience, this is the kind of thing that’s (rightly or wrongly) considered a “cost center”, not a “profit center”.
In some sense, that is the right move. For example, Intel was a market leader for decades while their research arm was very stagnant for many years too. Other times, it is short sighted not to price in what might be to come because you miss buying shares on the cheap before a huge technology/product leap.
Some people on wallstreet do. In Mckinsey's book Valuation, they make it pretty clear to the reader that companies who spend a lot on r&d tend to have outsized returns compared to their counterparts, who don't spend that much.
I didn't want to say this without doing a little bit of homework so I checked their Wikipedia page (https://en.wikipedia.org/wiki/Microsoft_Research) which doesn't list any accomplishments, just claims they have a lot of patents, and their main site has a publication index (https://www.microsoft.com/en-us/research/publications/?) but publication is not a good metric for ever seeing use.
Nope. Microsoft Research has some luminaries such as Leslie Lamport, Christopher Bishop, Xuedong Huang and others, but as far as actual research output that has been commercialized, there is not much to show off.
Except a 2.8 trillion dollar valuation at the top of the biggest stock market in the world.
Here is a video of it demo'd: https://youtu.be/YKkULaN7J9o
Note that it does research and not R&D. You aren't going to get products from research but rather technology advancements that then get incorporated. That happens a lot, and they obviously publish a lot.
The Haskell 1.0 specification was published before Microsoft Research existed at all.
(I worked briefly on a Haskell compiler in those days.)
The other one aims to strap screens to other people's faces to keep them even longer in a perpetually-online computer bubble of their own choosing, because that's been going great for society so far.
Apple is also invested in AI, they just refuse to use the AI buzzword, and use ML instead, which is probably the more accurate term.
Did you forget allowing the sum total of human knowledge to be swamped by dogshit, because it allows for the creation of dogshit at scale more cheaply than ever before?
What does that even mean? When has human knowledge ever gotten "swamped" by the capability of creating newer content?
And potentially kills people's jobs, potentially helps spammers and phisher to start larger and better campaigns, potentially increases the amount of fake news, disinformation or just bullshit.
What has Microsoft been innovating recently?
>taking tested and consolidated tech from others and rebranding it as its own.
Didn't Microsoft just recently build out a whole public cloud infrastructure by copying AWS and "rebranding it as its own"?
That's not innovating, that's direct competition, red in tooth and claw - something MS relishes.
It seems to be rewarding Apple? They also had a similar market cap two years ago. Microsoft has seen growth in revenue and net income, Apple has not. Going back to pre-covid times the picture is similar: better financial results for Microsoft but still head-to-head with Apple in market cap.
He’s offered a short opinion on the behaviours of two companies and made something of an ethical judgement.
Why disparage someone for daring to have an opinion?
If you’re going to excuse this guy making an obnoxious unfounded moral high ground claim, grant me the same courtesy for telling others not to preach about things they don’t know.
If you ever find yourself writing something like “I don’t know much about X.” Then don’t conclude your statement with an assertion about X. Go learn about X or ask questions or shut up. Your opinion contributed negative value when it’s knowingly predicated on incomplete information.
Would you mind sharing what the other comment is missing?
After that, you can start to try and figure how where most of the money comes from. For Apple this is the iPhone hardware sales and the App Store tax. For Microsoft it’s split roughly evenly across cloud, business processes and PCs. Cloud is the biggest.
These are the basic fundamental facts that begin to describe why Microsoft may or may not be valued. I don’t care or have an opinion on it. But I’m irritated by some guy saying he heard four media headlines ergo shame on wall st. for trading based on those four headlines. Like shut the fuck up man. That’s such a stupid claim. And look how many people have been suckered into responding to this garbage.
Love them or hate them, Apple isn’t playing that game (and despite their having hired Giannandrea, who was the reason Google has an AI strategy in the first place).
But I think wall street is ignoring them at the moment.
Thing the markets would care about, thing you are personally bothered by, thing the markets would care about. Got it.
No, the advertising and telemetry in Windows isn't a reason for the markets to value Microsoft highly.
Interesting to see what Wall Street rewards.