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  How Apple Became More Valuable Than Microsoft
Time: 12:53 EST/17:53 GMT | News Source: PC World | Posted By: Kenneth van Surksum

In the past decade, Microsoft has acquired nearly 10 times as many companies as Apple, and spent nearly nine times as many dollars on research and development.

Yet Microsoft's stock price performance has stagnated these last 10 years, while Apple has soared to its current status as the world's most valuable tech firm, a title wrenched away from Microsoft just last week.

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#1 By 16302 (207.195.91.66) at 6/3/2010 5:00:13 PM
If Apple had to live under the same regulations that are placed upon Microsoft by the DOJ, there is no way they would be worth more than Microsoft. If Microsoft played its heavy hands on all the hardware manufacturers and developers as Apple, they would have their pants sued off. Said another way - if Apple was not allowed to own the hardware, own the marketplace, and was forced to let third parties put everything they want on their devices, they wouldn't be so popular as they are now - at least in the eyes of the consumer.

#2 By 92283 (70.67.3.196) at 6/3/2010 7:03:02 PM
Its nice to know a company can cause dozens of employees that manufacture its products to commit suicide - and still get to the top.

#3 By 95132 (96.25.183.211) at 6/3/2010 7:49:27 PM
Amazing what passes as tech 'news' these days.

#4 By 16302 (24.72.70.37) at 6/3/2010 7:56:11 PM
#3 - that's a simple test for Active*WIN*. If it is Apple news, then the editors feel compelled to put it here on ActiveWin...

#5 By 8556 (173.27.246.50) at 6/3/2010 11:46:07 PM
#2: The Foxconn facility with 400,000 workers must be a pretty reasonable place to work. With 13 suicides this year it should come in under the US national rate, per capita.
http://www.suicide.org/suicide-statistics.html

If the Foxconn plant really sucked as bad as the media misleads us to belive the workers would be killing their bosses, not themselves.

#6 By 92283 (70.67.3.196) at 6/4/2010 1:33:19 AM
" With 13 suicides this year it should come in under ... "

"So far, at least 16 people have jumped from high buildings at the factory so far this year, with 12 deaths. A further 20 people were stopped by the company before they could attempt to kill themselves.

The hysteria at Longhua, where between 300,000 and 400,000 employees eat, work and sleep, has grown to such a pitch that workers have twisted Foxconn’s Chinese name so that it now sounds like: “Run to your Death”. "

http://www.telegraph.co.uk/finance/china-business/7773011/A-look-inside-the-Foxconn-suicide-factory.html

"Inside the facility, workers were busily stringing nets between dormitory buildings to try to catch any further jumpers. “It is a clumsy solution, but it may save lives,” said Mr Gou. The company, which also makes dozens of electronic goods for the likes of Dell, Sony and HP, is also now blocking windows and locking doors to roofs and balconies. "

"Overtime last year was an average of 120 hours per month per worker, bring their weekly hours up to 70 hours, above the maximum level set by Apple in its guidelines to suppliers. In the wake of the suicides, the company has now reduced the time to 80 hours per month, and is now considering raising its basic wage of 900 yuan (£90) a month by between 50pc and 100pc. "

#7 By 432 (209.167.107.58) at 6/4/2010 7:25:30 AM
The Foxconn deaths are a tragedy, however, I still have to put some blame back on the people themselves. Can they not quit the job? Are they forced to work for Foxconn? I am sure I am going to get lamebasted and probably because of my lack of understanding of chinese culture, but seriously...what is happening over there....in China, if you don't like your job, can you not quit?

#8 By 17855 (205.167.180.131) at 6/4/2010 7:51:10 AM
Apple is worth more than Microsoft on the stock martket right? I know i am over simplifying, but this is the same stock market that crashed the economy right? So why do people keep listening to these "experts".

#9 By 1896 (68.153.171.248) at 6/4/2010 8:29:29 AM
#8: The "Stock market" did not crash the economy; the so called "crash" was caused, technically speaking, by banks and hedge funds playing with very sophisticated financial instruments like the derivates.
In more general terms is like a dog biting its own tail running in circle: the economy prospers when there are sales; in order to generate sales you need to give people money to spend. Unfortunately nowadays people are spending money that they do not have; in other words the majority of the people, especially in ths Country, are living above their real possibilities ergo the need for credit to keep fueling growth.
As I said above a vicious circle which, at the end, will crumble the "Empire".
If you checked history you will see that happened unnumerous times in the past, a quick examples could be the Roman Empire and the French Monarchy bankrupted by Louis XIV, and will happen over and over until the human race will be around.

This post was edited by Fritzly on Friday, June 04, 2010 at 11:23.

#10 By 17855 (205.167.180.131) at 6/4/2010 11:56:59 AM
#9 Thank you for the clarification.

#11 By 1896 (68.153.171.248) at 6/4/2010 12:22:50 PM
#10: My pleasure; regrettably more than a clarification is a sad but true analysis of what we are. I am sure that Iketchum could argue that "in the good old times" we were not like this but again from a historical perspective what made the human race progress so much is also what causes our demise again and again.

#12 By 92283 (70.67.3.196) at 6/4/2010 12:45:51 PM
#9 The "crash" started because politicians ordered (through laws) banks to lend money to people to buy homes when those people could not afford it.

Then the banks had to con other idiots to take that worthless paper (the mortgages) off their hands.

"Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: September 30, 1999
NY Times

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans. "

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html?sec=&spon=&pagewanted=1

#13 By 92283 (70.67.3.196) at 6/4/2010 12:48:10 PM
... continued

"In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'' "

#14 By 92283 (70.67.3.196) at 6/4/2010 12:48:36 PM
...

This post was edited by NotParkerToo on Friday, June 04, 2010 at 12:48.

#15 By 16797 (99.236.143.109) at 6/4/2010 1:20:03 PM
#12 "The "crash" started because politicians ordered (through laws) banks .. Published: September 30, 1999 ... increasing pressure from the Clinton Administration .."

Hm.. was it not that in 1999, republicans already had majority in both the House and the Senate? Come on, you need 41 votes in the senate to prevent ANY bill from going through. They had around 55 I think, so you need to blame both sides, right (republican congress and democrat president)? Just like some other laws that were in effect since 30s and were repealed in late 90s: republicans pushed those through the congress and Clinton signed...

But I would not say it was just mortgages.. I mean, did you sleep through recent Goldman Sachs hearing and the whole "shitty deal" thing?

Etc.

#16 By 1896 (68.153.171.248) at 6/4/2010 3:15:50 PM
#12: I would advise you to check the Financial Times or DM; Specialized financial pubblications which could help you understand that the mortgage issue is just a very small part of the problem.
Btw the entire bank system crack happened in 2008/2009... although Fox News may have missed it....


#17 By 28801 (65.90.202.10) at 6/4/2010 6:34:11 PM
Fritzly - nothing but net!

#18 By 92283 (70.67.3.196) at 6/4/2010 9:42:12 PM
#16 I would suggest you are delusional.

You could start reading here about the subprime mortgage mess: http://en.wikipedia.org/wiki/Subprime_mortgage_crisis

"The immediate cause or trigger of the crisis was the bursting of the United States housing bubble which peaked in approximately 2005–2006.[2][3] High default rates on "subprime" and adjustable rate mortgages (ARM), began to increase quickly thereafter. An increase in loan incentives such as easy initial terms and a long-term trend of rising housing prices had encouraged borrowers to assume difficult mortgages in the belief they would be able to quickly refinance at more favorable terms.

However, once interest rates began to rise and housing prices started to drop moderately in 2006–2007 in many parts of the U.S., refinancing became more difficult. Defaults and foreclosure activity increased dramatically as easy initial terms expired, home prices failed to go up as anticipated, and ARM interest rates reset higher.

Falling prices also resulted in homes worth less than the mortgage loan, providing a financial incentive for borrowers to enter foreclosure. The ongoing foreclosure epidemic that began in late 2006 in the U.S. continues to be a key factor in the global economic crisis, because it drains wealth from consumers and erodes the financial strength of banking institutions.

In the years leading up to the crisis, significant amounts of foreign money flowed into the U.S. from fast-growing economies in Asia and oil-producing countries. This inflow of funds combined with low U.S. interest rates from 2002-2004 contributed to easy credit conditions, which fueled both housing and credit bubbles.

Loans of various types (e.g., mortgage, credit card, and auto) were easy to obtain and consumers assumed an unprecedented debt load.[4][5] As part of the housing and credit booms, the amount of financial agreements called mortgage-backed securities (MBS), which derive their value from mortgage payments and housing prices, greatly increased.

Such financial innovation enabled institutions and investors around the world to invest in the U.S. housing market. As housing prices declined, major global financial institutions that had borrowed and invested heavily in subprime MBS reported significant losses. Defaults and losses on other loan types also increased significantly as the crisis expanded from the housing market to other parts of the economy. Total losses are estimated in the trillions of U.S. dollars globally.[6]"

#19 By 92283 (70.67.3.196) at 6/4/2010 9:47:11 PM
... continued

As I said in #12 "Then the banks had to con other idiots to take that worthless paper (the mortgages) off their hands."

"The traditional mortgage model involved a bank originating a loan to the borrower/homeowner and retaining the credit (default) risk. With the advent of securitization, the traditional model has given way to the "originate to distribute" model, in which banks essentially sell the mortgages and distribute credit risk to investors through mortgage-backed securities. Securitization meant that those issuing mortgages were no longer required to hold them to maturity. By selling the mortgages to investors, the originating banks replenished their funds, enabling them to issue more loans and generating transaction fees. This created a moral hazard in which an increased focus on processing mortgage transactions was incentivized but ensuring their credit quality was not.[92][93]

Securitization accelerated in the mid-1990s. The total amount of mortgage-backed securities issued almost tripled between 1996 and 2007, to $7.3 trillion. The securitized share of subprime mortgages (i.e., those passed to third-party investors via MBS) increased from 54% in 2001, to 75% in 2006.[77] American homeowners, consumers, and corporations owed roughly $25 trillion during 2008. American banks retained about $8 trillion of that total directly as traditional mortgage loans. Bondholders and other traditional lenders provided another $7 trillion. The remaining $10 trillion came from the securitization markets."

#20 By 92283 (70.67.3.196) at 6/4/2010 9:52:40 PM
Keep in mind that the Japanese Economy has been "recovering" from their real estate bubble since 1991.

http://en.wikipedia.org/wiki/Japanese_asset_price_bubble

The US has possibly another 20-30 years to recover from its bubble. If it ever does.

Obama has pretty done the stupidest things possible and made things much, much worse.

#21 By 143 (96.28.66.92) at 6/4/2010 10:41:06 PM
Obama has pretty done the stupidest things possible and made things much, much worse.

You mean when Repugs deregulated or when Bush scared everybody in to signing-off on bailouts?

#22 By 1896 (68.153.171.248) at 6/5/2010 7:50:03 AM
#17: No I am not delusional, I have an open mind, something that both the original "Parker" and an epigon as you do not.
Keep cherry picking what you like where you like and contraddicting your same statements jumping from 1999 to a 2005/2006 period and being unable to wider your focus from mortgages only and expand it to the operations of hedge funds playing with derivates etc. etc, from 1999 to 2005/2006.
As Cicero said: "Similis cum similibus".......

#23 By 92283 (70.67.3.196) at 6/5/2010 10:16:41 AM
#21 Nope. I mean when Obama quadrupled the deficit.

http://blog.heritage.org/2009/03/24/bush-deficit-vs-obama-deficit-in-pictures/


#22 I think you are delusional when you say stupid things like "the mortgage issue is just a very small part of the problem".

The Housing Bubble is the core of the problem. Subprime Mortgage Backed Securities made things worse, but mortgages were still the core of that issue.

#24 By 89249 (72.213.159.5) at 6/5/2010 11:24:37 AM
Fritz you are only partially right. The mortgage issue is nearly all of the problem in some form. As NPT pointed out the government started pushing lending to those w/o the means to purchase regular loans. This was made possible through Fannie and Freddie being able to buy up more and more "risky" mortgages from banks.

As the banks found they could just funnel crap loans through to fannie and freddie the continued whole heartedly making more and more risky loans since they knew they had a clearing house who didn't care about the state of the loan.

After doing that for quite a while Goldman got Moody's to AAA rate collections of these bad mortages using quite equations and terrible statistics from the 1970-80's. As soon as Moody's started doing that they started stuffing the risk for these securities into AIG. They also started selling these AAA securities to everybody because a governmental AAA rating is pretty much a no risk return.

Take out the government sponsored ratings system, the "home ownership" push, and Fannie and Freddie and none of this would have happened.

It's worth noting that Fannie and Freddie have been expanding their practices even today priming us for even more problems in the future.

#25 By 16797 (99.236.143.109) at 6/5/2010 12:24:13 PM
#23 "21 Nope. I mean when Obama quadrupled the deficit. "

So, Obama is guilty of preferring stimulus spending (just like every major economy in the world agreed to do) over going into another depression?

See, Obama spent that money because there was a good reason to do it, unlike all that money spent on war in Iraq, for example. Cheney famously said that "deficits don't matter."



By the way, aren't credit rating agencies also to blame?

http://www.risk.net/risk-magazine/news/1602503/rating-agencies-congress

Senate subcommittee shows major rating agencies gave optimistic credit ratings to keep profits high.

..

"A conveyor belt of high-risk securities, backed by toxic mortgages, got AAA ratings that turned out not to be worth the paper they were printed on. The agencies issued those AAA ratings using inadequate data and outmoded models. When they finally fixed their models, they failed for a year – while delinquencies were climbing – to re-evaluate the existing securities.

Then, in July 2007, the credit rating agencies instituted a mass downgrade of hundreds of mortgage-backed securities, sent shockwaves through the economy, and the financial crisis was on.

By first instilling unwarranted confidence in high-risk securities and then failing to downgrade them in a responsible manner, the credit rating agencies share blame for the massive economic damage that followed."

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