The Big Players In Tech: An In-Depth Look At The Financials Of Apple And Microsoft
With the world continually evolving and moving closer to technology advancements, it is no surprise that the tech giants, Apple and Microsoft, are significant factors in driving the global economy forward. Yet, despite their similarities, the companies possess differences in their financial information that are notable. This article will delve into the financial information of Apple and Microsoft and compare their standings in the stock market, revenue streams, and financial strategies.
The Stock Market
Both Apple and Microsoft are publicly traded on the Nasdaq and are parts of the Dow Jones and S&P 500. However, their stock prices differ significantly. As of August 2021, Apple has a market value of around $2.4 trillion, with stock prices peaking at $156.69. Microsoft, on the other hand, is valued at $2.2 trillion, with its stock prices peaking at $292.47. This difference reflects the two companies’ different business models, where Apple revolves around pricey electronic gadgets, and Microsoft predominantly deals with software.
Revenue Streams
Apple’s primary source of revenue comes from its iPhones and related products that make up 54% of its revenue stream, followed by Mac (10.5%), iPad (8.4%), wearables and accessories (11.9%), and services, including Apple Pay, iCloud, and Apple Music (16.7%).
In contrast, Microsoft’s principal source of revenue is its cloud service, Azure, which makes up 20% of its annual revenue. The remaining 80% is split between software, Surface, gaming, and LinkedIn businesses.
Financial Strategies
Apple and Microsoft have different financial strategies that cater to their distinctive market positions.
Apple is known for its cash reserves of $191.8 billion, which are no coincidence. Its financial policy adequately reflects its business model, focusing on capturing high market shares through pricier products and premium prices. This strategy has worked effectively for the company as Apple’s revenues have been booming over the past few years, solidifying its position as an industry leader.
Microsoft, meanwhile, utilizes its cash for share buybacks, and dividend payments worth several billions of dollars, making it an attractive investment for investors.
Conclusion
In conclusion, while both companies operate under the umbrella of the technology industry, their distinctive business models reflect in their financial information. Apple maintains a predominantly hardware-based business, selling luxurious electronics for a premium price, whereas Microsoft’s primary focus is on software, cloud services, and gaming.
Overall, both companies have strong market standings and are critical players in driving the global economy forward. Investors, analysts, and stakeholders will continue to keep an eye on Apple and Microsoft’s financials with anticipation to see how the industry will continue to evolve.
