Monday, January 16, 2006

Apple vs. Dell

A lot of time ago Michael Dell, in a moment of unusual candor, suggested that the best thing for holders of Apple stock would have been to "cash-in" and simply forget about the company ... and recently, almost 10 years later, the market capitalization for Apple has somehow managed to (minimally and probably temporary) surpass the market capitalization for Dell !!!

That will teach us a few things:

- predictions are harder than it might seem and any "slip of the tongue" might later come back to haunt you :) (I still remember the famous quote "nobody will ever need more than 640k of RAM in their computers" from BillG, and a few decades earlier the even funnier "the entire global market for computers is certainly under 100 units", that one coming from IBM);

- do not underestimate "parallel thinking" - actually MichaelD is (surprisingly) quite correct - the COMPUTER part of the Apple business is only a very minor part from the current trend, while the iPod-related business (which was certainly NOT even an idea in SteveJ's head in 1997, and would have NEVER become the market leader without the total incompetence of the managers from companies like Sony) is probably responsible for well over 90% of the real growth;

- but while SteveJ might (temporarily) feel a sense of "revenge" over MichaelD, the final word on that story might still hold another very surprising turn of events - there was another company that at his top moment was bigger than either Apple or Dell (if we account for the devaluation of the US$) - I am speaking about ENRON and I can bet that those shareholders might see things in a very, very different way now - the entire "growth" for Apple is derived from basically a single product family which is HIGHLY OVERPRICED and is probably near its peak sales - it is quite unlikely that the iPod will ever be able to be a major hit anywhere outside of the very rich world and exactly in the same way as the HIGHLY OVERPRICED Apple computers were reduced to a real global market penetration of probably under 1-2% (since there are estimates that for each legal Windows license there are at least 2-5 illegal ones) it might be possible for the iPod to go to precisely the same direction - and probably that day MichaelD might have the final word :))

And just to end this on a technical note that might some day came back to haunt me - after recently spending more time in the Apple world (on the iBook but also on a test machine with the leaked OSX86) I can guarantee you that anybody who values his time and his money would rather dual-boot Windows and OSX on a Dell machine than on an Apple machine!


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