Did companies plan around the rumored apocalypse of Dec. 21, 2012? Possibly, but I doubt it. Now that we are all still alive, the world didn’t blow up, and we are looking forward to the next big thing, several tech companies are looking to impress consumers with just that – the next big thing.
Apple Inc. (NASDAQ:AAPL) seems to release a new product, design, or update every few months. Starting in 2001 Apple Inc. (NASDAQ:AAPL) has updated its devices (iPhones, iPads, and iPods (except for 2011)) annually. People have become accustomed to this, but Apple is planning to wait a while on the iPhone 6. In 2012 Apple derived 53% of its revenue from iPhones. With the stock recently dropping from around $700/share to currently float around $460-$470/share, many people have concerns for the company.
As for shareholders, there shouldn’t be much concern. With earnings per share increasing the past five years to the tune of 823%, and revenues increasing 507% in the same time frame, the company appears to be rising. Apple Inc. (NASDAQ:AAPL)’s largest fear should be the expectations others put on them. The company just had its best quarter and yet many people were disappointed with the results. The company shows a P/E of 10.62 and a market cap of nearly half a trillion dollars.
Google Inc (NASDAQ:GOOG) seems to want a piece of everything, and why not? In recent years the company has grown from a simple page with a logo to a company boasting products and services ranging from Gmail, a social network, Android phones, Android tablets, and even Android TV’s. So what’s next for the tech giant? Google Inc (NASDAQ:GOOG) goggles.
The company wants to place a tiny screen in front of customers eyes as they go about their every day life. The screen will present an augmented reality overlay as the user goes about his or her everyday activities. Google never seems to do anything small, as its current market cap nears $258 billion. Although search ads accounted for nearly 74% of Google’s revenue in 2012, this new device could be a big hit. Reports show Google Glass including a camera, 4G with GPS technology, and a Bluetooth connection to Android-based phones.
Google currently has a P/E of 24.08, an FCF yield of 5.1%, and a 231% increase in earnings per share over the past five years. The company’s stock has increased 46% in the past five years, minimal compared to Apple’s 263% increase. This still doesn’t lead me to think that it is a bad buy – in fact I recommend both of these companies.
Google might not seem glorified by some metrics in comparison to Apple, but Microsoft Corporation (NASDAQ:MSFT)’s stock has decreased in the past five years by 3.5%. Xbox only accounts for 10.6% of Microsoft’s nearly $74 billion revenue, but they are still focused on keeping gamers happy. Not much has been released about the new version of the device, including an announced name. Some people suggest Xbox Loop, the Durango, or possibly Xbox Infinity. We will call it the Durango.
