Posted on 11/17/2014 1:39:54 PM PST by SeekAndFind
The air is beginning to get a bit thin for the Redmond tech giant, as reports released Friday showed Microsoft climbing to the number two spot on the list of most valuable companies in the world, bumping out Exxon by roughly $9 billion.
The cause for Microsoft and Exxon swapping places is two-fold, in that while the price of oil has been dropping, along with Exxon’s share price, Microsoft has been on the rise since October following reports of strong fiscal first-quarter gains with its cloud computing business at its heart. Microsoft has also been making waves recently with its Surface Pro 3, which despite not having the kind of sales numbers Apple’s iPad line enjoys, is quickly gaining fame online as quite possibly the best tablet on the market. The companies actually traded places Thursday, when Exxon’s market capitalization dropped $3.1 billion to an end-of-day value of $400.8 billion.
Friday markets showed Microsoft Corp. shares climbing 20 cents to $49.81, and a market capitalization of $410.5 billion. Likewise, Exxon Mobil Corp. shares rose 24 cents to $94.90, but it wasn’t enough to push Microsoft back down to third, ending the day with a market capitalization of $401.9 billion.
Of course, Apple still sits far above the rest, enjoying a cool $668.2 billion market capitalization.
There’s little doubt that Microsoft has undergone an intense metamorphosis under the leadership of CEO Satya Nadella. His “cloud first, mobile first” focus for the company seems to be paying off, and rather quickly at that. The company has been making moves that analysts are saying “the old Microsoft” would have never done, such as the recent release of Microsoft’s Office suite on iOS, the new Microsoft Band being one of the first fitness trackers to work across Windows Phone, iOS, and Android, and a surprising partnership with Dropbox, a direct competitor to their own OneDrive service, to provide cloud storage and collaborative efforts to Office 365 subscribers.
The rise to number two is also aided by sales of Microsoft’s Surface Pro 3 tablet, which for the first time out of the history of Surface tablets has proven to be a profitable endeavor. Compare that to the first round of Surface tablets, spearheaded by the ARM-based Surface RT, which sold so poorly, Microsoft had to write off nearly $900 million in inventory last year. Both the Surface 2 and Surface Pro 2 didn’t exactly have Apple fearing its stake in the market, either.
Finally, Microsoft has restored a bit of investor confidence by announcing that Xbox One consoles have been outpacing Sony’s PS4 consoles for the past two weeks. However, the Xbox’s success is due largely to Microsoft having cut out the Kinect motion sensor and slashing the price on the unit to $349. This price cut risks cannibalizing profits, due to Microsoft taking a net loss on each unit sold even at the original $499 price tag. By removing the Kinect, however, and since the price of materials has dropped since launch, the jury is currently out as to whether or not Microsoft is still taking a loss on each Xbox One sold. However, with more Xbox consoles in consumers’ homes comes more subscribers to Xbox’s subscription services like Xbox Live and Xbox Music Pass.
In before Apple evangelism.
"Don't Give A Crap Anymore" ...
That’s amazing, considering how virtually every new venture they’ve tried during the past decade or so has been a failure in the consumer/residential space. The original XBOX, and the XBOX 360 were successful, but the the Sony Play station 4 is totally killing the XBOX ONE in Sales thus far.
They still maintain the ‘old reliable’, which is corporate IT. Microsoft is the core of virtually EVERY medium to large business IT Infrastructure in the world, and it functions very well. Keeping it secure is the key.
Hindsight is always clear.
Anyway, if you bought MSFT stocks at the beginning of this year, you would be up over 30% today.
But if you bought AAPL stocks for the same time period, you’d be up OVER 40% today.
According to Slashdot, BGR, Engadget, The Verge, Gizmodo, Cnet and ATD, Microsoft is already entering into bankruptcy protection.
RE: Microsoft is already entering into bankruptcy protection.
If true, time to exit MSFT for a huge profit.
BTW, I tried to Google, Bing and Yahoo the following :
“Microsoft bankruptcy protection”
Nothing related to Microsoft at all.
But, but, but.... iProduct!
FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD, FUD
Microsoft is in virtually anything IT related. It may not be number one in everything it does, but it is there.
Maybe, just maybe, the Big Softie is waking up from a 14 year Ballmer nightmare. He was OK as a hard-driving COO, but hopelessly out of his depth as a visionary CEO.
It's not true, though.
Those sites he listed are anti-Microsoft, reverse fanboy sites. I think it was sarcasm, really.
You have a very good point there. Balmer was/is a lunatic (IMHO), and I say that as someone whose met and worked for him.
I’d be interested to hear more... offline if you think it appropriate.
I was not there, but he always came across as angry and full of himself.
RE: Before everyone dismisses Microsoft, the upcoming Windows 10 operating system now goes back to emphasizing the Desktop user interface over the Modern tiled touchscreen user interface.
Windows 10 is being BETA TESTED by over a million techies and users even as I write this.
If you try to install Windows 10, the act of installing will give you the appropriate legal warnings to scare people away from the Windows 10 preview.
I have however seen several of my colleagues decide to brave it and upgrade a computer that had been running Windows 8.1.
The install was quite smooth and I have yet to see then experience any crashes or other major issues that one expects of such an early stage product.
Here’s what I observe:
The OS returns the Start Menu and smartly extends it with a version of the tiles that are key features on Windows 8 and the Windows Phone OS.
The difference is that this time, their use is obvious and they enhance rather than detract from the experience.
One million downloads of a very early version of the new OS shows that while we can concede that it might not be as hip as Apple or Google, Microsoft still has a huge user base invested in its products.
Initial feedback were mostly positive.
If Microsoft continues to listen to the critiques and suggestions of these Beta users, I don’t see why Windows 10 won’t succeed the way Windows 7 did.
Now, do a 5 year chart comparing Apple and Microsoft? What does that show?
I don’t have to. Microsoft had been STAGNANT for the past five year, while AAPL BECAME the most valuable company in the planet these past five years.
Had you bought AAPL 5 years ago, you’d be THREE TIMES richer today.
MSFT would only make you 70% richer than you were 5 years ago.
And Only in 2014 did Microsoft start to soar and even then, did not soar as quick as AAPL.
Now, do a 5 year chart comparing Apple and Microsoft? What does that show?
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