Wednesday, October 24, 2007

Bigger than Big Blue

Who would have thought that 10 years and, the return of Steve Jobs could make a huge difference? Businessweek in 1996 had an article about The Fall of an American Icon:
With its stock trading at $30 and below for the first time in 18 months, Apple could be takeover bait, eliciting fresh interest from companies such as Toshiba, Canon, Motorola, and Philips, in addition to Sun. Experts figure Apple would go for about $35 a share, or $4.4 billion--about half the $8 billion that investment bankers a year ago said it might fetch. That's when Spindler approached the company most likely to pay top dollar: IBM. Now, even at a bargain price, the computer giant is no longer interested.

That leaves Sun as the most likely suitor. It could be a good fit. The workstation maker would gain Apple's office desktop business as well as Apple's Macintosh software interface for a Sun ``Internet appliance''--a stripped-down PC for surfing the Net. The companies were close to a deal in December, insiders say, when Sun CEO Scott G. McNealy dropped in on Apple's board at the St. Regis Hotel in New York. The stock-swap deal would leave McNealy in charge of the combined outfit. Negotiations broke off a week later, when Apple warned of the impending quarterly loss, but they have since resumed, sources say.
Fast forward to today, headlines are all about the halo effect and the meteoric rise of the boys and girls from Cupertino. In yesterday's trading, Apple's stock surged and found itself in a well deserved market capitalization of US$161.89 Billion (total market value of the company) and thus they surpassed Big Blue--- IBM's US$156.01 Billion and Intel's US$156.51 Billion market capitalizations respectively. This meteoric rise is a result of a better than expected quarter.

How Apple Can Keep its Value, Saul Hansell of the New York Times ponders, as Apple Gains PC Market Share, Jobs Talks of a Decade of Upgrades. Then again, 10 years ago, who would have thought Apple would be bigger than Big Blue? Certainly, Apple and its faithful are basking in this glow and looking forward to the future and growing annualized returns that for now, has no end in sight.

*google finance screenshot was from a few minutes ago.