Dueling Fools Apple Core of Ailing PC Sector
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Dueling Fools
By Rick Aristotle Munarriz (TMF Edible)
September 5, 2001

My condolences, Paul. Having argued the unpopular side of many Duels in the past, I know what it's like to have my emailbox ablaze with vent. But let me go out on a limb here. When we last met here to cut Apple up, you pointed out that your anti-Apple stance generated just 20% of the vote and a ton of hate mail. Can it be that the share of Apple believers is many times larger than Apple's single-digit market share in its box business?

And even if we're going to hone in on the computing hardware side, what's so bad about being a niche player with a loyal fan base? Isn't $2 billion an enterprise value bargain when the other players include Dell (Nasdaq: DELL) commanding a $55 billion market cap and Hewlett-Packard (NYSE: HWP) and Compaq (NYSE: CPQ) agreeing to get together with a $70 billion cap? That's before we even begin to consider that the market premium on the operating software side -- you know, Microsoft -- multiplied by Apple's market share on a percentage basis is worth far more than all of Apple many times over!

But, like residents at the whiner's wing of a hospital maternity ward, Paul is bent on complaining of all the discomfort the last nine months have produced rather than the life that lies beyond it. He's willing to dig all the way back to fiscal 1995 to produce Apple's peak in sales but fails to point out that the bottom line veritas. Last year the company earned nearly twice as much on $8 billion in revenue than it did on $11.1 billion during 1995. Not that it matters, but Apple actually out-earned Compaq last year and the year before that, and if Carly Fiorina has an extra $25 billion burning a hole in HP's pocket, well...

So where does that leave us, overpriced systems? Perhaps. But that is the kind of premium one can command when it is putting out the last of the un-colas. There will always be alternative music, film noir, and a mob that can't follow Microsoft's Steve Ballmer in shouting out, "I love this company!"   

Software compatibility? Is this really that big of a problem now that so much time is spent and so much is possible on the Internet? Besides, I can't play RollerCoaster Tycoon on my Windows NT system either! I can also add that if I want to play a pair of extra scenarios on the latest Pop Top sim game Tropico, I need to do so on a Mac. But, with the Net being what it is and the latest generation of home video game consoles being so advanced, the argument of game availability on one computer platform over another is almost moot.

People will always want a choice, Paul. Developers will still need to cater to the niche targets if they want to reach critical mass. The ease, style, and panache of Apple -- in all of its pursuits -- is not going away. If you find better bargains in today's market, go for it. But, if you've got $2 billion that I can bum off you I would really appreciate it about now.

Think Different. Invest Smarter.

Rick Aristotle Munarriz doesn't think an Apple a day will keep the doctor away, but it would sure make the shareholders happy. Rick's stock holdings can be viewed online, as can the Fool's disclosure policy.

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