Tuesday, June 19th 2018

Apple, Microsoft and Google - Who Has Performed The Best


Friday, February 19th, 2010

While three years may not seem like a long time for the typical stock market blue chip company, in the world of computer technology and consumer electronics it can seem like almost a generation of products has changed within that time.

Consider the three titans of computer technology and software industry, Microsoft, Apple and Google. They are currently still all dominant in their markets with almost monopoly status.  However there has been a significant turn of events which have seen some flounder while others have thrived.

Let's consider where these companies were in 2006.

  • Google in 2006 nabbed 59.3 percent of search queries, while in 2009 it was 65.7%, Gmail was an invitation-only beta release on April 1, 2004, and was only released to the general public as on February 7, 2007.
  • Apple's iPod Nano was introduced in the end of 2005 as a replacement for the iPod mini.
  • Microsoft was still working on Vista, and eventually released it on January 30, 2007.

The following table illustrates how these companies have performed over those 3 years.

In summary there has been a 314% increase for Apple, 112% increase for Google and only a 29% increase for Microsoft.

Figure 1 - Net Income in $M from 2006 to 2009

* Year ending for Apple was 2009-09-26 while G and M is year ending 2009-12-31 - Data Sourced from Google Finance

 

So as the chart above indicates there have been some major changes at all of the companies over the past 3 years. Here is a summary below of some of the products released between 2006 and the end of 2009.

  • Google released their Android Mobile Phone OS, Google Chrome Web Browser and Google Apps.
  • Apple released many more iPods with many editions including the mini, nano, classic and touch. They also released the hugely successful iPhone on June 29, 2007
  • Microsoft had released Windows Vista on January 30, 2007 as well as Windows 7 on October 22, 2009.

It seems to be that the one who has had least amount of growth in net income over the period is Microsoft. However the poor reception of Vista and its delays shows that this delay in particular had a big impact on Microsoft's growth over the period. This however understates the potential impact that Windows 7 is likely to make in subsequent quarters.

Some further irony to illustrate Microsoft's fortunes, because although they did make a profit many years ago from the purchase of Apple shares, it would have been a much nicer deal at today's $201 a share.

 

Figure 2 - Data from Google Finance

 

From Apple's 2003 SEC filing:

"In August 1997, the Company and Microsoft Corporation (Microsoft) entered into patent cross license and technology agreements. In addition, Microsoft purchased 150,000 shares of Apple Series A nonvoting convertible preferred stock ("preferred stock") for $150 million. These shares were convertible by Microsoft after August 5, 2000, into shares of the Company's common stock at a conversion price of $8.25 per share. During 2000, 74,250 shares of preferred stock were converted to 9 million shares of the Company's common stock. During 2001, the remaining 75,750 preferred shares were converted into 9.2 million shares of the Company's common stock."

 

So looking ahead in 2010 all three companies look set to continue their dominance in the various monopolies they occupy.  It will be another interesting year for the computer technology and consumer electronics industry with many more products to be released.

 

Future Products

 

 

 

Microsoft

 

Google

Apple

Microsoft Surface/Tablet

Google ISP

iPad

Windows Mobile 7

Google Buzz

Mac Pro revamp

Office and Exchange 2010

Chrome OS

iPod touch with video

Live Mesh and Azure

Cloud Computing

ITunes Streaming

 

 

 

iPhone 4G

 

 

 

 

 

 

 



Article by James Jones

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com





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