Why Microsoft Is a Better Buy Than Apple

There I was, writing this very criticism of Apple (Nasdaq: AAPL  ) when my MacBook Pro suddenly died on me. For a minute, crazy thoughts raced through my head: "Does Apple know what I 'm writing?" "Did my Mac rat me out?"

In the end, Apple repaired my faulty graphics chip free of charge, and I remain a happy customer.

But as a potential shareholder, I still don't feel the love.

"Good to customers" isn't the same as "good to owners"
Remember Webvan? The service cheerfully set out to replace the weekly grind of grocery shopping for thousands of satisfied Americans, and then the company went bust. Shareholders lost everything, although Amazon.com later resurrected the brand name.

A company can likewise be bad for customers and good to owners. Cigarette companies produce a product that has a nasty habit of killing its own customers. Yet historically the companies themselves have been wonderfully profitable ones to own.

I choose "good to owners"
Like the cigarette companies, a truly great business can continue to succeed without having to reinvent the wheel. Microsoft (Nasdaq: MSFT  ) fits the bill: Almost all of Microsoft's profits come from virtual monopolies (such as Windows and Office) that are indispensible to business. Market share in Office Suites, for instance, exceeds 94%.  

But if Apple were to stop innovating, customers (and shareholders) would drop them like a hot potato, because Apple faces fierce competition in its bailiwicks.

In the computer space, Apple faces lower-priced competitors from the likes of Sony (NYSE: SNE  ) and Hewlett-Packard (NYSE: HPQ  ) .

In smartphones, there's real competition from Google Android-based phones as well as Research In Motion’s (Nasdaq: RIMM  ) BlackBerry.

And although the iTunes Music Store may well be the dominant provider of music going forward, customers aren’t captive to the iPod anymore since iTunes went DRM-free more than a year ago.

So Apple must continue to innovate to fend off competitors, but history says that its odds of doing so indefinitely are next to none.

In consumer electronics, a competitor inevitably ends up building a better mousetrap, usually for cheaper. Just ask RCA about the TV, Sony about the Walkman, Motorola about the StarTac -- followed by the Razr -- and Apple itself about the Macintosh.

So when given the choice between a company that depends on innovation (Apple) and one that can succeed without it (Microsoft), I suggest choosing the latter -- because 10 years from now, even though we'll all probably be using smartphones, they probably won't be iPhones.

More on Microsoft and Apple:

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Fool contributor Chris Baines hopes his MacBook Pro won't burst into flames (again) upon the publication of this article. He actively participates in CAPS as cbaines2. Chris owns no shares in any of the companies in this story. Google and Microsoft are Motley Fool Inside Value selections. Google is a Motley Fool Rule Breakers recommendation. Apple and Amazon.com are Motley Fool Stock Advisor selections. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.


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  • Report this Comment On December 05, 2010, at 7:10 PM, midnightmoney wrote:

    what, you ran out of those cool cartoons that were appearing a while back, so you ran this instead?

  • Report this Comment On December 05, 2010, at 7:34 PM, aapl2222 wrote:

    yeah, why don't you ask the sharelholders of msft and aapl what it was like to hold the monopoly company versus the innovative the past 10 years?! I read alot of blogs, and this is perhaps the worst piece of advice I have read about aapl or msft for that matter. Microsoft windows days are starting to fade as people are finally realizing apple is a better computer. Apple doesn't need to innovate anymore, (even though it will) why is it that you use a macbook again ? seriously... I cant realisticaly think of a reason for your recommendation unless you are being paid by microsoft.

  • Report this Comment On December 05, 2010, at 7:46 PM, uc22 wrote:

    " I read alot of blogs" No offense but this is not something you want to say when making a point about technology. Anybody that knows anything about tech knows that tech blogs are the most uninformed resources about the subject. They are ripe with misinformation and fanboyism

  • Report this Comment On December 05, 2010, at 7:48 PM, GeorgiMilev wrote:

    I had a discussion about Apple and Microsoft couple of years ago with my broker. Since then, Apple is up 265%, while Microsoft is up 57%.

    So, for people who are planning an eternal lifespan, your article might be correct. However, if someone would like to make some money in the mid-term, and still with low risk, Apple proves to be the choice.

  • Report this Comment On December 05, 2010, at 7:50 PM, MOS1992 wrote:

    Mr. Arrogant or Mr. Ballmer? I'll take the previous Steve because he will continue to innovate. Jobs has changed the world 4 times and Gates/Ballmer just copy what he does. Which stock would you have rather owned, doubled and tripled down on over the last 10 years? The iPhone may not exist in 10 years but only because Mr. Jobs innovated it of existence by making it obsolete.

    Jobs innovates and kills old things for the same reason a hound dog chases a rabbit. It's what he does and he does it well!

    This is the worst article I have ever read as a fool. Retract this one......

  • Report this Comment On December 05, 2010, at 8:09 PM, jjBerk wrote:

    Yes, you could have said the same thing ten years ago when Apple was 8 dollars a share and Microsoft was 23 a share. I must admit that it does make some sense that, since the market rewards innovation, and MSFT stopped innovating ten years ago (at least), therefore MSFT has little to loose since it's already suffered stagnant performance for a decade. At some point apple may run out of new ideas, but I don't know anyone who has made money long term by betting against Steve Jobs.

    PS. I'm happy to have bought and held apple for ten years.

  • Report this Comment On December 05, 2010, at 8:12 PM, aapl2222 wrote:

    @ Uc22

    I have to disagree in part . Even though blogs are full of misinformation like you point out, they are also filled with good insights and people's opinion on stuff. You can't disregard fanboysm totally, there is a reason behind it.

    Im just talking for the retail investor who may lose money after reading an article like this one. I would much rather NOT own aapl or msft, rather than thinking that msft is a better investment than aapl. It's plain stupid, misinformed, agenda driven advice by this writer.

  • Report this Comment On December 05, 2010, at 8:14 PM, nixtr wrote:

    The irony of someone using an Apple product and getting great customer service, while bashing the very same company is not lost on me.

    Apple only holds 4-8% of market share in computers, yet everyone with a disposable income realizes the advantage of having a computer that starts quickly and does not need a bunch of virus hand-holding and update hoop-jumping.

    Seems premature to throw the stock under the bus when it has so little market penetration.

  • Report this Comment On December 05, 2010, at 8:17 PM, Davewrite wrote:

    I read almost the EXACT same reasoning like 10 years ago i.e: msft has un-killable monopolies, Apple has to make great products, faces stiff competition.

    10 years back:

    Msft was around 22, now it's 27

    aapl was around 7.5 it's now 317.

    Put a 10 year growth chart of msft vs aapl. You'll see aapl is like a growing mountain, msft is dead line flat.

    Around the time when steve Jobs came back 15 years ago Apple's market cap was like 10-15 billion vs Msft approaching 600b. Today apple is 291 b vs Msft 231 b

    reminds me of the guy who said:

    I'm telling you to sell apple!

    "you BOUGHT at 10 but ...

    I told you to SELL when it was 20

    I told you to SELL when it was 50

    I told you to SELL when it was 80

    I told you to SELL when it was 100

    I told you to SELLuwhen it was 150

    I told you to SELL when it was 200

    I told you to SELL when it was 250

    I told you to SELL when it was 300

    shooo......t

    I'm telling you to sell NOW!!!!

    will you FINALLY LISTEN TO ME???"

  • Report this Comment On December 05, 2010, at 8:21 PM, aapl2222 wrote:

    @ davewrite

    So true, I know many of those.

  • Report this Comment On December 05, 2010, at 8:29 PM, daveshouston wrote:

    I almost fell out of my chair laughing when I read this headline. Surely you jest!

    >>>Almost all of Microsoft's profits come from virtual monopolies (such as Windows and Office) that are indispensible to business. Market share in Office Suites, for instance, exceeds 94%.

    Well there is some truth to that but you've ignored the most important facts:

    -> Windows is yesterday's news. They've been copying Apple's operating system for years. More and more users are wising up and switching to the Mac. Microsoft has inertia but that's all they have. They'll be able to ride it for a while but not for the long haul.

    -> Microsoft Office defines the term 'Bloatware.' No one really needs that confusing pile of crap. Once again, they have inertia but nothing else. I still have a copy of Office 2008 for the Mac. Once in a while I use Word to open an archived document but I never use it to create anything new. Excel is used 2 or 3 times a year to create a simple spreadsheet. Powerpoint is never used because Apple's Keynote is better. I will not be updating to the new version. Why would I want to buy overpriced bloatware that I don't need?

  • Report this Comment On December 05, 2010, at 8:45 PM, DefunctAcct wrote:

    This article is written by someone who completely confuses the hardware, software and hardware+software business.

  • Report this Comment On December 05, 2010, at 9:02 PM, FreeRange1 wrote:

    What an absolutely clueless "anal-ist" if that is what the author is claiming to be. What an absurd piece. Laughable at how ignorant the author is about these two companies.

  • Report this Comment On December 05, 2010, at 9:06 PM, otter82 wrote:

    Given the title this should have been the shortest article in the history of journalism: absolutely nothing more than a blank space.

  • Report this Comment On December 05, 2010, at 9:26 PM, iraself wrote:

    GiGo, i.e. garbageIN-garbageOUT. Hewlet & MS are desparately trying to innovate, take it from someone who KNOWS. Ditto, Sony. AAPL are the ones who enjoy cost advantage due to their economies of scale (that came about via innovation). AMZN, AAPL, GOOG are the ONLY credible tech players. They each command an organizational capacity, i.e. Black Swan firepower power & agility, that the also rans lack. Before you write your next blog, or, invest your next dolar, first read Taleb's "BLACK SWAN".

  • Report this Comment On December 05, 2010, at 9:37 PM, websterphreaky wrote:

    Oh dear author Chris Baines (and all the CrAppleTards that beat the broken drum), you are so CLUELESS.

    Apple, nor Stevie Gods, is any kind of "innovator" .. they are Thieves, Usurpers, Cloners, Ripoff artists and Copiers of Intellectual Property. Apple has been SUED more than any other computer and gadget company in the industry. Not a damn thing that CrApple has come out with is ORIGINAL, nor made by them, in the US since the Apple IIe was farmed out to Canada, then Japan and on to the Sweatshops of China since 2000.

    The G3 iMac was designed, engineered and made by Hyundai in Korea. The Sony /IBM consortion in Japan DESIGNED AND MADE EVERY PowerBook from the FIRST model till the end of the G3 PowerBook in 1999. Since, ALL have been DESIGNED and made by Acer, Quanta, MSI, etc. of Taiwan and now in Commie China by Foxxcom.

    CrApple "idea" swiped the iPud from Rio, Kodak designed and made the Apple Quicktake digital Cameras, the Newton was designed by an Engineer at UC San Diego, the Airport was designed by OrINOCO and made another company in Ohio. Apple STOLE Widgets from Konfabulator, the iPhune has had more patent lawsuits against it than chickens have feathers.

    Of course the REALLY BIG shame and Clone is that "Macs" are now nothing but IBM PC CLONES!! These in NO DIFFERENCE between a Mac and a Dell or Gateway that comes off the SAME CHINESE SWEATSHOP Factory line, except the two things ... that one little BiOS Chip and the HUGE RIP OFF PRICE DIFFERENCE!

    No, CrApple is The Great iNOvator. .... the King of Theft.

    And one last thing, I can only hope that MS Drops Office for Mac and Adobe drops ALL Mac software ... we'll see how long Mac exist. If Keynote is so great .... why doesn't anyone in serious business use it?? Ha ha ha ha ...

  • Report this Comment On December 05, 2010, at 9:40 PM, techy46 wrote:

    Past 10 Years: Apple has been very innovative in the consumer electronic space (iPod, iPhone, etc.) thus their outstanding performance. Microsoft has been very innovative in the enterprise software space (Exchange, Sharepoint, SQLServer, Windows 7, etc.) thus their high profitability but low growth. Next 10 Years: Apple has probably peaked and Microsoft has plenty of profits from enterprise space to deversify the consumer software offerings and offer those to all hardware companies. Apple $380 (+20%) by 12/2011, Microsoft $35 (+29%) by 21/20211, I'd by a more MSFT and even more of Intel $28 (+33%) by 12/2011, How cares above either Steve?

  • Report this Comment On December 05, 2010, at 9:47 PM, websterphreaky wrote:

    Forgot to mention one more thing, a reason Apple is the King of Greed and why indeed their stock sucks as an investment.

    With all the gratuitous and obscene Profits Apple has made in the last 20 years, the cheating on Stock Options for King Stevie Gods, the purchase of an 80 MILLION DOLLAR PRIVATE JET for His Highness and the excessive Salaries the Apple Execs get ... CrApple HASN'T PAID a stinking cent of Dividends to their Stock Holders while Stevie Gods the Stock Option Cheat, has be in-charge!~

    Fact ... you in denial.

  • Report this Comment On December 05, 2010, at 10:42 PM, BabyGoat wrote:

    I cant believe how emotional the comments are!!! This is not a football game and we are not here to cheer the CEOs up or play them down with our money.

    I suggest we look at investments with a cold mind. You should look at the financials and the growth potential of the products Apple and Microsoft carry, and draw your own conclusions from there.

    My opinion (o fanboyism) is that portable is the future and Apple has the lead. Looks like iOS growth is inevitable and profits will just keep coming to Apple. I don´t see growth in Office and Windows other than industry growth and that does not account for too much.

    Just my $0.02

  • Report this Comment On December 05, 2010, at 11:03 PM, sewdog wrote:

    Beware the cloud, you who think MSFT has an unconquerable monopoly! How could you not figure the arrival of cloud computing into your analysis? As an entirely satisfied Apple shareholder, I will admit that I have started to look at MSFT. With a 10 p/e and a 2.5% yield, MSFT may be a good investment, but that doesn't mean that AAPL cannot continue to be a good investment as well. The rivalry between the two companies is not a zero-sum game. MSFT appears to be a good investment perhaps because, after doing nothing for ten years, there is very little downside left in the stock, as evidenced by its below-market valuation. However, buying MSFT because it looks too cheap to ignore and because it appears as though there is little risk in owning the shares is not the rationale that AAPL investors use. AAPL, despite its hefty price, actually is reasonably priced based on fundamentals. People buy AAPL bc they think the company will continue to make them money, not because they think that the investment won't lose them money, which is the appeal of MSFT shares. Basically, this is a case of value vs. momentum investing, although I would not call AAPL purely a momentum stock.

  • Report this Comment On December 05, 2010, at 11:20 PM, sewdog wrote:

    @websterphreaky:

    I remember reading a similar comment from you several years ago. You truly are a voice in the wilderness. AAPL investors have been handsomely rewarded and it did not involve a taxable dividend. Since dividends are taxed more highly than long-term capital gains, I would guess that most AAPL investors are delighted to have amassed substantial gains in the stock that will be only moderately taxed when the investment is sold (provided current tax rules are maintained).

    As for your clueless rant about AAPL being a thief rather than an innovator, please wake up and realize that almost all progress comes from improvements of established ideas. Is the Smartcar a fraud because company executives stole Henry Ford's idea of motorized transportation and improved on it?

    Steve Jobs works for $1 per year. Having a corporate jet is a pretty standard management perk.

    AAPL makes tons of money because it makes and sells products that consumers want. That's the ultimate arbiter. Companies with good products and/or services are successful, companies without these go out of business. The consumer says that you are dead wrong, and have been ever since you began this rant however many years ago you started it.

    No one is forcing you to own AAPL stock or any of its products, so I suggest you stop your insane wailing bc your "analysis" lacks all credibility and AAPL shareholders could care less if Apple didn't actually invent the products that it sells.

  • Report this Comment On December 06, 2010, at 4:41 AM, xmmj wrote:

    @ author - you write:

    "because 10 years from now, even though we'll all probably be using smartphones, they probably won't be iPhones"

    The iPod is 10 years old. Its market share is actually still increasing.

  • Report this Comment On December 06, 2010, at 9:51 AM, mkj1928 wrote:

    Both companies are great......own both and lets move on to the next stock.

    mike

  • Report this Comment On December 06, 2010, at 11:33 AM, techy46 wrote:

    There's something that the Apple fan club convienently forgets - the US Justice department told Microsoft in 1998 to back off on hardware and software integration else they would be broken up. Bill and Steve B did not want the hassel of 3 companies. Thus, Microsoft focused on the enterprise market and really couldn't attempt developing a monopoly in consumer toys, overpriced proprietary hardware and software) unless they wanted to break the company into three pieces as the DOJ proposed. With Apple's and others success those restraints are no longer a concern. In retrospect, they probably should have create 3 companies, but now they are free to compete w/o any concern except for the European Socialist Union that is now focused aon Apple and Google.

  • Report this Comment On December 06, 2010, at 12:02 PM, techy46 wrote:

    I wonder how much Apple stock Biil and Steve B bought. The Steve's; B and J are friends. Only 30% of Bill's wealth is in Microsoft stock. That would be a great joke (irony) on the Wormies - Bill and Steve B made billions on Apple stock while keeping Microsoft out of the iToys market due to DOJ consent decree. Is that a conflict of interest - don't think so.

  • Report this Comment On December 06, 2010, at 1:58 PM, polley11 wrote:

    If you want any return on your investment, ignore this article!

  • Report this Comment On December 06, 2010, at 8:50 PM, baldheadeddork wrote:

    @sewdog: "Beware the cloud, you who think MSFT has an unconquerable monopoly!"

    Care to explain how "the cloud" will hurt Microsoft? I know this is a very popular meme among investment analysts (and those who like to pretend). I work in IT, including a lot of virtualized installations, and it's effect on MSFT is going to be minimal.

    Here's how "cloud" computing works: You buy a copy of VMWare and install it on one server so you can then run multiple server installations on the single physical machine. But each of those server installations still has a full product license for whatever server you're running. If you run a Microsoft server environment, it means that you're installing your three server programs on one machine instead of three. Your cost for Microsoft software is the same.

    On large organizations you increase those numbers, sometimes exponentially, but it is the same. Virtualization doesn't reduce your operating system costs, they actually go up a bit because you're buying the VMWare programming, too, but your overall costs go down because you're buying fewer servers.

    The emergence of cloud computing has resurrected predictions about eliminating individual installations of desktop software and running everything from a central server. This has been a pipe dream in IT for decades. It used to be called thin clients, now it's being called cloud-based desktop computing, but it's all the same. It's not going to work this time, either.

    Thin clients (by any name) are only practical when you have a large number of users who use the same program and only that program. Call centers are great for thin clients. Not so much for everyone else. If you have your typical office environment, where people need to use a dozen different applications at different times, the back end hardware and network requirements to run virtualization for even a small number of users becomes hugely expensive. And you still need desktop OS licenses, because there has to be some framework to allow individual users to move between applications. A $100 license for MS Windows is a steal compared to creating new code for yourself that works with everything your company needs.

  • Report this Comment On December 06, 2010, at 9:10 PM, baldheadeddork wrote:

    To everyone pointing at the performance of AAPL and MSFT for the last decade, how would this conversation have gone in 2001? From December 1991 to December 2001, Apple went from 14.09 to 7.44. In the same period Microsoft went from 2.31 to 21.69.

    The point is, past dominance does not guarantee future performance. If you're being an honest observer, I think you have to at least admit that a lot of Apple's performance over the last ten years was fueled by almost total ownership of digital media and the consumer smartphone market. Neither of those are true anymore. They have a level of competition today that they haven't really faced in decades.

  • Report this Comment On December 06, 2010, at 10:22 PM, cbaines2 wrote:

    Baldheadeddork (if that is your real name, lol),

    Your observation above is almost exactly what was in a prior draft, but I needed to remove it for space reasons. :-)

    Nice work.

  • Report this Comment On December 06, 2010, at 10:49 PM, baldheadeddork wrote:

    Thanks for the compliment.

    One adjustment on my post: The dates should say December 1991 to December 2000. The prices are correct for that period.

  • Report this Comment On December 06, 2010, at 10:56 PM, TMFTypeoh wrote:

    MSFT isn't going anywhere.

    As an apple and MSFT shareholder, im much more concerned about my apple shares than my msft.

    Why?

    1) Valuation

    2) Steve Jobs

    3) Steve Jobs

    4) Steve Jobs

    5) Apple is on an endless wheel of innovation. If they fail, they will fall. Hard. MSFT doesn't have this issue.

    I will continue to hold both, happily. AAPL will out-perform over the next 3-5 years. MSFT will outperform over the next 10-50.

    Brian

  • Report this Comment On December 06, 2010, at 11:14 PM, TMT33 wrote:

    When I look at Apple I think it comes down to the fact that there retail stores are always packed and product is flying out the door, I expect they'll have a strong XMAS.

  • Report this Comment On December 07, 2010, at 1:17 AM, cbaines2 wrote:

    "5) Apple is on an endless wheel of innovation. If they fail, they will fall. Hard. MSFT doesn't have this issue."

    Typeoh, you pretty much summed up my analysis in a nutshell.

    As for valuation: MSFT is very cheap. Adjusting for cash and debt, the stock gives you 12% free cash flow yield, about 5% of which immediately goes into shareholder pockets from dividends and share buybacks.

    The real difference between the two firms, however, is in the durability of their competitive advantages, and not valuation. Hence why I focus on former in the article and not the latter, despite being a value investor myself.

    Thanks for reading.

  • Report this Comment On December 07, 2010, at 12:49 PM, Brent2223 wrote:

    The number one way to fail at investing - making future decisions blindly based on historic information. Apple is changing the home technology industry, Microsoft has Office which business has been forced onto. PC's loaded with local software will be dead in 10-20 years and Apple is positioning itself to be the provider of new technology. Microsoft has Office. Companies that don't inovate become cash cows that eventually die.

  • Report this Comment On December 08, 2010, at 2:40 AM, JustEconist wrote:

    This blog is very misleading. Microsoft and Apple do not cover the whole Software,OS,PC ,cloud etc market. Google,Amazon,Salesforce.com oracle must be included.

    Cloud is the future and microsoft is loosing that market to Google and amazon and the rest. The Windows 7 OS is as insercure and buggy as XP and the only way MS can survive is by keeping monopoly over PC + office but that is over. Google is offering replacement for office and tablet (Ipad and android based tablets) will replace most PCs. Chrome OS from Google will be another fatal blow to MS OS. For too long MS have been selling overpriced,buggy software. since they had monopoly. There are millions of single mom who spent good portion of their saving on a PC only to find out it is infected with viruses and some has taken control of them, they go and buy another one and the same thing happen, that is how Bill gate made his ten's of billions. No more SOME PEOPLE CAN NOT BE FOLLED ANYMORE, I say sell MS now

  • Report this Comment On December 08, 2010, at 4:51 PM, cbaines2 wrote:

    "The number one way to fail at investing - making future decisions blindly based on historic information."

    I couldn't agree more. Assuming Apple will continue to go up because it has in the past is an example of this.

  • Report this Comment On December 09, 2010, at 12:17 AM, av84fun wrote:

    I have to agree with aapl2222 who wrote..."I read alot of blogs, and this is perhaps the worst piece of advice I have read about aapl or msft for that matter."

    The only way I would agree that SOFTY is a buy would be if Ballmer is fired or...ummm...permitted to resign.

    Ballmer is the man who, among other things, presided over the development of Vista which is universally thought to be one of the worst OSs of all time and nearly ruined MSFT.

    He is the same man that let a couple of young kids EAT HIS LUNCH in the browser space that MSFT once monopolized.

    He is the same man who thought YHOO was a great buy above $30 but not a buy at all below $15.

    Ballmer is the luckiest man on the planet (financially) to have been Gates' roomy at Harvard. Were it not for that, he'd be just another guy hacking around the tech space.

    The MSFT board should be ashamed of itself for not giving Ballmer the boot YEARS ago.

    And as for the inherent value of monopolies, I can list dozens of names like...oh...Kodak and Poloroid but that's another story.

    (-:

  • Report this Comment On December 09, 2010, at 12:57 PM, bzhayes wrote:

    I love reading anti-AAPL articles just for all the flaming from the fanboys...

    Yup, AAPL has had great growth for the past 10 years... it has to be a great investment for the next ten.

  • Report this Comment On December 10, 2010, at 11:33 AM, OmegaSD wrote:

    I like the comments by baldheadeddork ("past performance...") and typeoh ("AAPL 3-5, MSFT 10-50"). Which ones makes a "better investment" depends on your investment objective. If you're going for growth in the short-to-mid-term, AAPL is probably better. The thing about MSFT is, the stock price may have been flat over the past year, but the dividend has been consistent; and overall, while you may not get much return, you're getting a safe return while not losing much in equity. With AAPL, you've gotten higher return, but with higher risk; that risk paid off so far, but there's no guarantee it'll continue to pay off (I'll give AAPL credit where credit is due, they are obviously a good company that competes and innovates well).

    My personal opinion is that AAPL is doing well because people are whimsical and AAPL is just giving "creative" new ideas, but many are fads that will come and go. The constant quest for "innovation" is a problem. Sure the iPod and iTouch were innovative, but it's just a matter of time before someone else comes up with a cheaper equivalent, and market share spreads. Personally, I like my PC because I've been able to upgrade and do whatever I want with it, hardware and software wise. It's a predictable animal. Everyone has different preferences; AAPL caters to some, MSFT to others. As someone else mentioned, so does GOOG and other companies.

    Disclosure: I own a small position with MSFT.

  • Report this Comment On December 10, 2010, at 11:34 AM, OmegaSD wrote:

    *past year - meant to say "past few years or even decade."

  • Report this Comment On December 10, 2010, at 6:37 PM, manlymanliness wrote:

    Bizarre advice, really. I bought MSFT in... 2005?? Since, it has hovered around $27/share. No real movement at all. I sold it a few years ago with absolutely no regrets whatsoever. AAPL is an entirely different story. It has shown an ability to innovate. I see iPhones, iPods and Macbooks everywhere now, something I couldn't say 10 years ago. It was the first single stock I ever bought in 2005 and since then I have gained 210% on it.

    I'll stick with AAPL, thank you very much.

  • Report this Comment On December 10, 2010, at 9:24 PM, websterphreaky wrote:

    Here is the bottom line .... when Stevie Gods dies ... so does CrApple. Stevie IS the company iCON(man). He cons the Media, he cons the Fanbois into buying a new model iPhun every 9 months (oh how stupid), that game is over with the iPod, now Stevie will con the stupid into buying a new model iSanitaryPad every 6 - 9 months.

    But the CON is dying with the Mac, sales are way down, and they won't come back, even the Hack Media is reporting it. The buying public knows that a Mac is just a Dell Clone off the same Chinese Sweatshop assembly line ... you can run Windows on a Mac and Mac on a Dell! But your Mac niche is very small, look at the numbers. So is the iPhun and iPad niche.

    When the Great iNOvator CON is dead, so will be CrApple. They can keep stealing other companies and developers ideas, but the iCON will be dead and so will the "con".

    Those years and decades of alcohol and drugs are catching up to the "iCON", even a Liver a year won't save him.

    MSFT, Sony, HP, Dell, Toshiba, Acer, etc. AREN'T just one guy like CrApple ... and THAT is why CrApple is a bad long term investment and the other are NOT.

    Read it and weep Fanbois in denial, it's the Truth.

  • Report this Comment On December 10, 2010, at 10:04 PM, brothermoses62 wrote:

    Wow, so much emotion between the two camps. Aren't we supposed to invest with our minds and not our hearts??? Emotionally, I lived in Seattle two miles from Lakeside, where Bill G went to high school. Then I attended Reed College, from where Steve J dropped out. Emotion aside, I'd buy stock in both companies, watch their progress, and adjust my portfolio as needed. May they both continue to grow!

  • Report this Comment On December 11, 2010, at 9:17 AM, lqs101 wrote:

    the article says microsoft has no real competition. it doesn't mention the fact that google just announced its new operating system, chrome os, this week, which will compete directly with microsoft.

  • Report this Comment On December 11, 2010, at 8:11 PM, cbaines2 wrote:

    And how much software, pray tell, can I get on this chrome os?

  • Report this Comment On February 20, 2011, at 3:05 PM, goscuderi wrote:

    Well, all I can say is that I bought shares of Softy in 1998 and held, stupid me, at the advice of my ML broker, who also advised me to not buy shares of Apple at 8 bucks per share at the time. Since that time, the stock price has not budged at all. Aside from dividends, there has been no capital appreciation at all since that time. An absolutely miserable stock. Finally bought Apple at $247 !!

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