This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Will Apple or Microsoft Be Under More Pressure?

NEW YORK ( TheStreet) -- Owing to events over the weekend and while markets were closed, two big tech bellwethers will be under pressure when trading opens as expected Wednesday: Apple (AAPL - Get Report) and Microsoft (MSFT - Get Report).

What investors, as opposed to traders, should be asking is whether each company deserves the punishment.

First, let's set the scene.

Microsoft's problem is the Windows 8 launch. The words John Carter come to mind. If you're if a certain age, think Ishtar. The company was laughed at -- not with, at -- over the weekend.

CEO Steve Ballmer's impassioned speech in defense of his company's creation played to a mostly silent hall, and when it turned out many "in line" at Microsoft stores were employees, as Geekwire reported , the story line was set.

Apple seems to be in turmoil. Senior Vice President for iOS Scott Forstall was shown the door, writes , as was John Browett, head of retail, adds the blog Cult of Mac .

Forstall took the fall for Siri and Apple Maps, "a huge disaster" writes Gdgt. He was also considered abrasive, an empire builder. The Guardian writes that Browett had lost the confidence of his troops at the Apple Stores.

In the short run, I think Microsoft will fall harder. Remember, $1 off a $28 stock is $8.4 billion, while $1 off Apple's $604 stock is less than $1 billion. Microsoft's rise came in the 1990s when stock splitting was in vogue, while Apple's came in the last decade when it was not.

Because it has been better for investors over the last decade, Apple has more fans in the trading pits than Microsoft. There is more sentiment to catch dips. But I honestly think that, right now, Apple has a bigger problem.

While Apple dominates devices and is taking bigger shares of what was the desktop market, there's not much beyond that niche. Sure, its iTunes store is Wal-Mart (WMT - Get Report) to everyone else's Family Dollar (FDO), but at best that's mildly accretive to earnings.

How quickly will fans of the iPhone, iPad or even iPod upgrade? These are sturdy devices, running the latest software Apple can push to them. Apple can expect more volume sales in education and the enterprise, but is it staffed up to handle those kinds of contracts? No, it's not.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FDO $0.00 0.00%
AAPL $95.03 0.21%
INTC $31.11 0.00%
MSFT $49.90 0.00%
WMT $68.91 0.00%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs