Apple's latest technology defeat at the hands of Google, most recently in the area of maps, is underscoring how the two tech titans are going head-to-head in a tech battle where the stakes loom large.
Both Apple (AAPL) and Google (GOOG) are increasingly becoming the tech titans poised to dominate the area of mobile Internet access and devices. That leaves investors to wonder which company is best positioned in what's increasingly looking like a winners-take-all market that rewards just a few players.
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While lay people like to handicap the race between Apple and Google based on things such as the number of smartphone apps they offer, how many gadgets they ship or how thick the screens on their tablets are, investors are digging through the numbers to see how the two measure up in terms of:
• Stock performance. There's no question that while Google may be beating Apple in terms of selling smartphones, the battle on Wall Street has tilted in Apple's favor. Long-term Apple investors have pulled in one of the greatest all-time hauls in investing history. The stock went public on Dec. 12, 1980, at $22 a share. After adjusting for the stock's three splits, Apple's per-share IPO price was $2.75. Today, those shares are trading for $529.69, an increase of 19,150%, or nearly 18% a year compounded. Google, on the other hand, went public Aug. 25, 2004, at $85 a share. Those shares are now worth $702.70, representing a 725% increase.
But Google investors in the shorter term have actually gained more on a relative basis than Apple investors have. Google stock's compound average annual growth rate works out to 30%, well above Apple's. Yet, this year so far, Apple investors have again been on top. Despite the 30% decline in Apple shares from their high, they're still up 39% this year. Google's 2012 rise: 9%.
• Market value. When it comes to market value, no company can compete with Apple. Apple is by far the most valuable company in the world, valued at nearly $500 billion. That's more than double the $230 billion valuation of Google.
And with its premium market value, Apple's shares also command a premium valuation relative to Google, at least based on one measure. Apple trades for 44.2 times its trailing earnings per share excluding extraordinary items, says S&P Capital IQ. That outstrips the 32 P-E of Google based on the same measure.
• Profitability and financial resources. Apple's early lead in smartphones and savvy marketing has afforded it a giant war chest of cash and profit. The company generated $41.7 billion in profit on $156.5 billion in revenue over the past 12 months, enviable profit margins equaled by few firms.
Such rich profits have accumulated to give the company cash and short-term investments of $29.1 billion, not to mention its $92 billion in additional long-term investments. That's a cash pile few companies can rival, including Google with $44 billion in cash and short-term investments but a scant $1 billion in long-term investments. Google's net income of $10.6 billion on revenue of $47.5 billion doesn't reach even half what Apple has achieved.
There's no question that while Google is beating Apple in terms of getting its Android operating system, and now maps, into the greatest number of consumers' hands, Apple's premium pricing is making it a bigger darling on Wall Street.
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