Now, back on the focus of the original post:
What reason should Apple be more highly valued than Microsoft? They make less revenue, less profit, a lower profit margin, do not dominate their core markets like Microsoft, and are losing marketshare to new offerings.
What possible sound, technical reason is there for Apple being the most valued company in the world?
I can think of just one: hope for the future. Even though things are sliding down in market share, it's hope for the future.
Isn't that what defines a bubble? Irrational hope for big returns in the future, when there aren't any technical indicators to support the valuation?
For that matter, why would Microsoft or Apple be more highly valued than ExxonMobil? Modern society CAN function without smartphones! It ran fine without PCs up until the mid 80s. But remove oil. No cars or planes. None of those container ships to bring those iPhones over. None of the polymers and plastics to MAKE those iPhones.
XOM has massive sales - $310 billion. They have $19 billion in profits. They sell a fundamental product REQUIRED for 2nd or 1st world life, everywhere around the world.
I can see Microsoft being close to the same valuation as XOM - they make about the same product, and much of modern life everywhere in the world revolves around a PC and computer systems.
Apple? Way down in profits. Their profits are driven by smartphones and media players - neither of which are necessary in the least for modern life (there's a reason Nokia sells 260,000 phones a day - they're reliable, they make great calls, they last forever on a charge, and they're durable).
So XOM sells a base commodity that is REQUIRED for modern life. Microsoft dominates the core (the OS) of information technology around the world. Apple sells a dwindling share of smartphones and media players.
And Apple is going to be the most valuable company in the world?
Signs of a bubble to me, much like the tech bubble in 1999/2000. Companies taking 1-2 years (or less) of growth, projecting forward, and asking for insane valuations based upon that growth.
Should be:
I can see Microsoft being close to the same valuation as XOM - they make about the same productprofit, and much of modern life everywhere in the world revolves around a PC and computer systems.
Most valuable in the world across all industries? None. Most valuable tech company? Plenty.
None of the polymers and plastics to MAKE those iPhones.
iPhones have very little plastic compared to the competition. But I get your point.
I can see Microsoft being close to the same valuation as XOM - they make about the same product, and much of modern life everywhere in the world revolves around a PC and computer systems.
The killer difference is that Microsoft's products are very easily and economically replaced by others of equal or better usefulness. You have to get oil from someone. You don't need what Microsoft makes at all.
Microsoft is old, fat and slow. Microsoft has lost the innovative spark. That signals a death watch in the tech industry, the same death watch Apple was on in the late 90s before Jobs' return. Microsoft is mainly running on momentum. An obese man takes longer to die when deprived of food than a thin one.
there's a reason Nokia sells 260,000 phones a day
Yeah, they're cheap. So cheap in fact that Nokia makes very little profit off of most of them.
they're reliable, they make great calls, they last forever on a charge, and they're durable
True there. My old Nokia phones were great. My Android is slow to make or receive calls, has spotty reception, poor battery life and is already pretty dinged and scratched up.