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Business – Jobs Overtaking Gates With Apple Stock Surge

Mary Childs

Oct. 28 (Bloomberg) — Apple Inc.’s 131 percent surge in 2009 has made it the second most-valuable technology company in the U.S., trailing only Microsoft Corp. after record iPhone and Macintosh sales produced better-than-estimated profits.

The CHART OF THE DAY shows Apple’s stock-market value trailed Microsoft’s by $52.3 billion last week. Shares of Apple have done almost three times better than Microsoft’s this year and reached a record $205.20 on Oct. 22. Apple Chief Executive Officer Steve Jobs cut iPod prices, introduced a faster iPhone and ran a back-to-school Mac promotion to fuel purchases as Microsoft, founded by Bill Gates, saw sales of Windows for personal computers fall 39 percent, including deferred revenue.

“The iPhone is really the growth driver,” said David Pearl, who helps oversee $7.8 billion as co-chief investment officer at Epoch Investment Partners in New York, which owns shares of both companies. “It’s the most profitable product by Apple, more so even than the Mac, and has the biggest growth opportunity.”

Apple sold 7.4 million iPhones and 3.05 million Macs in the third quarter, up 7 percent and 17 percent, respectively, from a year earlier. While Apple’s share of mobile handset revenue globally was 8 percent in the first half of the year, it generated 32 percent of the operating profit, according to Sanford C. Bernstein & Co.’s Toni Sacconaghi. In the worldwide PC industry, Apple had 6 percent of sales and 25 percent of operating profit in 2008, the analyst said Aug. 4.

Apple has grabbed its biggest share of the home-computer market since the 1990s, said Roger Kay, an analyst at Endpoint Technologies Associates in Wayland, Massachusetts. As the U.S. economy emerges from the worst slump since the Great Depression, consumers will upgrade their operating systems, he said.

“It’s been a rocket ship,” Kay said. “Apple thinks it can pry loose more buyers during this transition, and Microsoft thinks it can staunch the flow of users away from them and toward Macs. Everyone’s girding for battle.”

(To save a copy of the chart, click here.)

To contact the reporter on this story: Mary Childs in New York at mchilds4@bloomberg.net.

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October 29, 2009 - Posted by | Uncategorized |

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