History is full of repeat battles. You know where this is going, right? “What goes around, comes around.” And, a couple of favorites attributed to George Santayana, “Those who cannot remember the past are condemned to repeat it.” Plus, “Skepticism is the chastity of the intellect.” Take of those what you will, but suffice it to say, “The New Apple Is The Old Microsoft” from Laxman Vembar is a pile of crap, a wasted argument as old as electricity, a meme that won’t die yet is walking dead.
Yes, history repeats itself. No, the new Apple is not the old Microsoft. It’s not even the new Microsoft. Microsoft isn’t even the old Microsoft and Apple isn’t Steve Jobs’ Apple anymore.
Things change. But in this case nothing has changed because someone still sees the past at every turn.
I see signs of history repeating itself – the new behemoth in tech is becoming more and more like the old behemoth in tech.
Ostensibly, this is Apple today becoming like Microsoft of the past. Except that Microsoft of the past was a one-trick pony (Windows and Office; sorry– one trick), while Apple was a one-trick pony in the past (Mac) and became a multi-faceted technology titan where every product makes money hand over fist.
Is Microsoft like that today? No.
The bull case for apple is the strong moat around its best selling product – the iPhone. Based on this year’s WWDC, if anything, this moat is only getting bigger.
Call it what you will, but moat is wrong. Apple’s success in recent years is iPhone centric, but that is not the only success story. It’s just a very big success story. Mac, iPad, Watch, Services, et al. All are big success stories but somewhat overshadowed by the historic success of iPhone.
The bear case is that it is a single product company. They just can’t seem to be able to expand meaningfully into other categories that can rival the iPhone.
This is where the feces hits the fan. Nothing rivals the iPhone. Nothing. Everything else pales by comparison. But a single product company? Hardly. Let’s do it again. Mac, iPad, Watch, Services, et al. All are very successful products in their own right. All. Of. Them.
Is the new Apple with its iPhone a lot like the old Microsoft with its windows/office?
Betteridge’s Law applies here. The answer is still ‘No.’ Why? Because Microsoft failed at everything else it tried to diversify itself under Bill Gates and under Steve Ballmer. Failed. Failed as in wasted tens of billions of dollars and didn’t make any product to rival the Windows-Office hegemony.
Where has Apple wasted money on a failed product since Steve Jobs returned to Apple in 1997? The Mac Cube? MobileMe? Mac Pro? Every technology company has such losers, but not one of those had much impact on Apple’s fortunes. Meanwhile, Microsoft wasted tens of billions of dollars on fruitless ventures and acquisitions that quickly soured.
I am biased to prefer Linux over macOS/Windows and an android based phone over an iPhone (though I own both). This leads me to not be a big fan of Apple products.
A geek. A certified geek.
I am however also in the minority.
Yes, and no. Minority because of Linux, majority because of Android (noting, of course, that Android device users fall into two distinct groups; the geeks, everybody else).
The bear case for apple on the other hand is that it is a single product company at this point and at today’s valuation as the most valuable company ever in history, any misstep here can lead to a significant correction.
No, Apple is not a single product company any more than Microsoft relies wholly on Windows and Office for prosperity. As to so-called missteps, Apple doesn’t seem to make many, and they’re very obviously public, while Microsoft has made many through the years, all swept under the rug.
Vembar on the iMac Pro:
I fail to see who the target audience is for this device. It also looks like Apple realized this would be a concern and included language in their press release to assure customers that they are still working on a Mac Pro with a modular design. That being the case, it still does not excuse apple from creating useless product lines. This is the exact opposite of what Steve Jobs did to turnaround the company.
Who should we put trust in? An admitted geek who loves the contrarian way? Or, Apple, which recognized the error in the Mac Pro and has decided to move straight into the rapidly growing workstation segment with the iMac Pro and a modular Mac Pro?
Does anyone not think Steve Jobs would be proud of the iMac Pro? And, yes, Apple has moved well beyond the four product quadrant.
Microsoft famously experienced a “lost decade” where the company was tremendously profitable but the stock languished with no one believing Microsoft could build anything successful beyond windows/office. It continued to generate massive profits through this period but the multiples just contracted. It was only recently when Satya Nadella took over the reigns and refocused the company as cloud-first and mobile-first that the stock has taken off.
It was more than a decade, but I understand the premise.
I see a similar case with Apple. I believe the iPhone will continue to be a very successful product. Revenues from services related to this ecosystem will also continue to grow in the near-mid term.
What is similar? Success? Profits? Or, languishing stock? APPL goes up and down and mostly without reason. MSFT languished for a decade for a good reason. Can you say, rudderless? So far this year APPL has improved nearly 50-percent. MSFT, not so much.
At the end of the day if you are bullish on the overall market at today’s levels or just want to stay invested, I consider Apple a good buy as long as it is below our cohort fair value.
Which is market techno geek speak for ‘I told you so‘ if things go South, but also ‘APPL is a good buy‘ in case the stock goes North.
Yes, history repeats itself. No, history is not repeating itself with Microsoft vs. Apple.