A lot of skeptics have been asking, fairly, why Apple Inc, also known as AAPL in NASDAQ should have a larger market capitalization than tech firms like Microsoft (NASDAQ: MSFT), Hewlett-Packard (NYSE: HPQ), and IBM (NYSE: IBM). The answer is that Apple’s growth is much faster and Stevev Jobs and his firm are about to reach a point at which the firm will be the No.1 technology company in the world in total sales.
Apple posted a $20.3 billion in revenue for the last quarter. It was a 67% increase from the same period last year. Apple’s profit for this period was $4.3 billion, a 71% increase.
IBM reported a revenue rose of 3% to $24.3 billion. IBM’s profits rose from $3.2 billion in the same quarter last year to $3.6 billion in the recent period.
Hewlett-Packard, the largest tech company in the world by sales, had revenue of $30.7 billion in 2nd quarter this year, up 11.4%. But net income was only $1.8 billion.
Microsoft is still by far the most profitable of the large tech companies. It had net income of $4.5 billion in its 2nd quarter this year. With a revenue of $16 billion.
Apple expects its revenue for the current quarter to rise above $23 billion. Apple is known for stating guidance which tends to be well below future results. But, based on the firm’s own forecast its annual revenue-run-rate as of the end of the current period will be $95 billion. Its net income annual run rate will be $17.5 billion.
Some of the core businesses of IBM, HP, and Microsoft grow quickly over time. Microsoft recently got a growth spurt from the introduction of Windows 7. HP has benefited recently from a rebound in printer and PC sales.
Apple’s growth rate over time cannot be matched by any of the other companies in the tech category, or perhaps any large public company at all. Apple’s revenue in its 2007 fiscal was $24 billion and had announced its 2010 fiscal sales of $65 billion today.
Why has Apple Inc done so well? Perhaps because it is not in the highly competitive enterprise market in which tech companies have to compete for huge contracts with large corporations. Perhaps because almost all of its major product launches in the last decade has been a hit, or that the management has an unprecedented ability to offer the market products which are better designed, better branded, and better featured than its competitors.
Apple will be the largest tech company in the world by both revenue and net income. All that is left to guess is the quarter in which it will happen. Artitcle from 247wallst.com
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