Apple Still Hates Microsoft

For a moment, I'd like you to consider something remarkable:

Net Cash After Debt

Apple

Microsoft

Current

$24.490

$17.736

Dec. 31, 2007

$18.448

$19.092

Dec. 31, 2006

$11.869

$26.400

Dec. 31, 2005

$8.707

$34.701

Source: Capital IQ, a division of Standard & Poor's. Numbers in billions.

How about that? Apple (Nasdaq: AAPL  ) outpaces Microsoft (Nasdaq: MSFT  ) in net cash and liquid assets by almost $7 billion. The iPod and the iPhone must be exactly as big as we all thought. (Seriously. Look at those 2005 numbers.)

And your point is...?
Mac addicts will be tempted to gloat. They shouldn't. Apple needs all the cash it can get. Competition is fiercer and expectations are higher than they've ever been. Research In Motion (Nasdaq: RIMM  ) , Nokia (NYSE: NOK  ) , and Google (Nasdaq: GOOG  ) all want a slice of hot, tasty Apple pie.

"I'm not sure that brand loyalty (as silly as I find it with them) will matter enough as their are cheaper versions of many of their products out there," wrote CAPS investor vladus2000 about Apple earlier this month. "They have made a killing constantly staying ahead of the curve, I'm not sure they are going to be able to sustain it in the current climate."

I'm not so sure of that myself. But, as a shareholder, I'll confess to being comforted by Apple's moves; CEO Steve Jobs, alive and well, is taking no chances. The iEmpire spent $486 million on advertising in fiscal 2008, up 4% from fiscal '07 and 44% from the year prior, VentureBeat reports. A flurry of new pitches showcasing the iPhone's App Store advantage suggests that fiscal 2009 will see even more ad spending increases.

You know what that means: Mr. Mac still hates Mr. Softy. And he's using his surprisingly fat wallet to exact revenge.

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Fool contributor Tim Beyers had stock and options positions in Apple and Google, and a stock position in Nokia, at the time of publication. The Motley Fool's disclosure policy fits snugly into most wallets. Not George Costanza's, though.


Read/Post Comments (4) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 25, 2008, at 6:51 PM, damastr wrote:

    Apple may have more cash than MSFT at this point. But it seems like writer may have missed accounting for about $30B that MSFT paid out as one time dividend a couple of years ago. It had around $50B at that time. Also, MSFT generates about 3 times as much profit as AAPL. Still AAPL is definitely catching up.

    As for comparing iPhone with other "similar" devices out there, I think it doesn't make much sense. All those devices may be as good as or even better than iPhone as far as PDA or phone features are concerned. But the biggest differentiating factor in favor of iPhone is that it has iPod too. Nobody can compete with that.

  • Report this Comment On November 25, 2008, at 8:00 PM, mattack2 wrote:

    "their are"?

    You need an editor.

  • Report this Comment On November 25, 2008, at 11:22 PM, RipRagge wrote:

    Please name the companies that sell all the hardware and software for an interoperable digital ecosystem.

    That will be Apple and all of Apple's competitors.

    The companies that are normally called "competitors" to Apple sell one piece of the whole. Dell sells the computer. Microsoft sells the operating system. Nokia sells a phone. The list of companies that sell pieces of a puzzle is endless.

    Apple is the only one who sells the whole widget. Many companies compete with pieces of the widget. No one company competes with the whole widget.

    Apple can change the whole ecosystem at a moment's notice. All those other companies need endless inter-corporate meetings and an agreement on how to share the credit (blame) to make even a minor adjustment.

    Full disclosure: I bought 50 shares of AAPL@$20 in 1998 – two splits ago. I still have all of that, plus some.

  • Report this Comment On November 25, 2008, at 11:28 PM, RipRagge wrote:

    Sorry about stacking, but I didn't mean to imply that Apple is "better" than all those other companies. What I meant is that they aren't Apple competitors. They are each in a different game.

    The New York Mets and the Pittsburgh Penguins are not competitors with each other or the Detroit Lions. Likewise, Nokia and Dell are not competitors with each other or Apple.

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