Bill Gates was asked about Apple’s falling share price, and the recent comparisons of Apple to Microsoft, this morning on CNBC.
He dodged saying anything about Apple specifically, but he did toss out a general thought about tech companies getting beat up in the press.
“Well, with tech companies the leader is always questioned. They say, ‘Is this the end of them?’,” said Gates, “More times people think that’s the case than that’s really the case. Eventually they’re right. Then they remember, ‘Oh yeah, we said these companies would have challenges.'”
Gates would know. Microsoft’s stock collapsed after the dot-com boom. It hasn’t ever really recovered. It’s basically flat.
During that time, a lot of pundits have called for the collapse of Microsoft. Microsoft has yet to collapse. It just keeps churning out profits.
After Apple’s share price fell by 40% between September and April, some people started comparing it to Microsoft.
It’s an easy comparison to make if you base it on really superficial stuff. Both companies stock charts sort of look alike if you match up their peaks. And both companies replaced their visionary CEOs with guys who are not visionary product guys.
Upon closer inspection, the comparison doesn’t hold up. Apple has yet to whiff on a major technological trend like Microsoft did with smartphones and the iPad. When that happens (and it probably will at some point) then the comparison is fair.
Still, Gates’ point stands. In the tech business you can’t just be a leader. You have to be perceived has having the next idea before the next idea is even apparent.
Gates continued his response, defending tech companies overall by saying, “We’ve got some amazingly strong companies, Apple, Google, Microsoft, companies coming up like Amazon, Facebook, Samsung.
“If you do deep software on the client and deep services, if you have things unique for businesses, which is a particular strength of Microsoft, the software business is an amazing business to be in in terms of growth and the profitability dynamics.”
Here’s the clip, he talks stocks at 8:57.