Dell: Apple should close shop (1997) | Hacker News Reader

Dell: Apple should close shop (1997)

news.cnet.com

25 pointsrkwz21 comments

And almost 10 years later, in 2006, Jobs sent the following note to his employees:

"Team, it turned out that Michael Dell wasn't perfect at predicting the future. Based on today's stock market close, Apple is worth more than Dell. Stocks go up and down, and things may be different tomorrow, but I thought it was worth a moment of reflection today. Steve."

Source: http://www.nytimes.com/2006/01/16/technology/16apple.html?pa...

Ah I was confused, I thought the comments were recent. Maybe the OP can plop a (1997) in the title!

And today, Apple is worth well over 10x what Dell is.

Actually 12x :)

http://macdailynews.com/index.php/weblog/comments/28418/

A billion here, a billion there. Eventually you start talking real money!

Please people, put the year in the title when you submit old stuff.

To be fair to Michael Dell, this is what AAPL looked like in 1997: http://bit.ly/fyjoqu

And this is what DELL vs AAPL looked like in 1995-1997: http://bit.ly/hhKZGH

While Dell was clearly wrong in the long run, he was surely not the only person to believe Apple was through.

It's interesting to look at those stock charts. By the end of 2004, Dell had earned back about half the share price that it lost in the dot-com bust, but its share price has never been that high since, and in fact is now about the same as when Michael Dell made this comment.

By contrast, at the end of 2004 Apple's stock had recovered entirely from the dot-com bust, and has now reached almost 10 times the price it peaked at during the dot-com bubble.

Of course, you can make pretty much the same comparison between Apple and most any tech company that was around during the dot-com bubble. Very few have ever recovered for any length of time, and among those who have, IBM seems to be doing best, but they're only about 20% higher than their pre-bust peak.

"There is some concern that Apple will have a hard time recruiting a top-notch CEO because of Jobs's presence."

I think he's done a passable job.

Today: There is some concern that Apple will have a hard time recruiting a top-notch CEO who can replace Jobs's presence.

I don't really understand the rationale behind 'closing shop' in this scenario. Why would they close up shop? To make Dell's life a little easier? They wish! What a difference that would have made! :P

Article isn't very clear either,

"Apple is reportedly planning to come out with network computers that would require high-end servers to function."

I understood the sentence, but its kind of ambiguous. Would these be remote servers, in-house, etc? Did this ever come to fruition?

This was written over a decade ago (in 1997), when Apple was in a much more precarious situation than the one they are in now.

I wonder how that would have changed the industry if they had shutdown, for whatever reason. Would we all be working on Dells?!

FYI 13 years in the computer industry is like 65 human years.

It is truly astonishing how much Jobs got right. I'd forgotten about the clone market killing and the Microsoft deal, both of which seemed like suicide at the time, albeit for different reasons.

business is business, to suggest it was anything else is silly. It's clear he (Dell) understood this, brands are built on confidence, misplaced or accurate.

[1997]

So? Shall I start investing in poorly performing companies with crap leadership and terrible products, then? Are they all going to turn around in a big way after a decade, like Apple?

It's all well and good to point and laugh with the benefit of hindsight. How about taking a look at Apple's position in 1997 and finding any reason to invest at all? That would make an interesting submission.

I suppose the thing to spot was the change in leadership. Oh, and that Jobs wasn't the washed up has-been that everyone (including myself) thought he was. I guess that follows Y Combinator's approach of looking at the team rather than the product / idea.

The other thing would be that Apple always had a devoted following even when their computers were abysmal, which fits with Warren Buffets idea of a big moat.

But yeah, hindsight 100%. At the time I wouldn't have given them a bean either.

To answer your question with a question: What would be the 2011 equivalent? We need a company with big mindshare, doing poorly who just had a change of leadership.

A company that's spent a long time getting good at a disruptive technology, something that appears simple yet requires a deep understanding, while the incumbent are all focused on incremental improvements of soon to be legacy technology.

Myspace!

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