Yesterday, I was having lunch with a friend and the idea of a direct line to God for Truth was briefly fantasized about. Of course we know what the reality of life's journey is. I often feel that my journey is most like this quote from Jack Kerouac - “I had nothing to offer anybody except my own confusion.” In other words, don't follow my advice, live your own dream.
I am not a guru of truth, nor do I think that I have many answers to life's questions. What if you took my advice on something related to your business and it was completely wrong? Consider this recent news story before taking anyone's advice. Achieve your dreams and have a Happy Sunday!
Why Apple is now worth four Dells - Fortune Online
It was only seven months ago that we celebrated the 10 year anniversary of what may be Michael Dell’s most famous quote. Asked on Oct. 6, 1997, what he would do if he were in charge of Apple, he told a crowd of several thousand technology execs gathered in Orlando:
“What would I do? I’d shut it down and give the money back to the shareholders.” (link)
The irony, as we noted last October, was that Apple’s (AAPL) market cap was then double that of Dell, Inc. (DELL). Since then, Apple’s value has gone on to triple and, last week, quadruple Dell’s. Here, thanks to MacDailyNews, are the market cap milestones:
Jan. 13, 2006 Apple passes Dell: $72.13 billion vs. $71.97 billion
July 27, 2007 Apple doubles Dell: $127.81 billion vs. $63.65 billion
Dec. 6, 2007 Apple triples Dell: $165.66 billion vs. $54.42 billion
May 1, 2008 Apple quadruples Dell: $158.66 billion vs. $38.97 billion
By week’s end, Apple was worth 4.04 Dells.
Michael Dell, however, is still worth 3.01 Steve Jobs, according to the latest list of the richest Americans:
Dell’s net worth: $17.2 billion
Jobs’ net worth: $5.7 billion
And according to IDC, Dell is America’s No. 1 PC maker, with a 30.9% U.S. market share, while Apple is No. 4 with 6%.
So why the big difference in market capitalization? Apple’s track record of innovation, integration and customer service has something to do with it, but investors pay even more attention to the margins.
Apple Profit margin: 15.13% Operating margin: 19.28%
Dell Profit margin: 4.82% Operating margin: 5.91% [Source: Yahoo Finance]
In other words, Dell sells a lot more machines, but Apple makes way more profit on each machine it sells.