Apple could buy Dell with cash
Here's an interesting corporate milestone: When the markets closed on Wednesday, Dell (DELL) was trading at $11.98 share, with 1.96 billion shares outstanding. That puts Dell's market capitalization at $23.5 billion.
Meanwhile on Tuesday, Steve Jobs reported that Apple (AAPL) ended fiscal year 2008 with $24.5 billion in the bank.
In other words, Apple could buy Dell with the cash it has on hand and still have more than $1 billion left over. (Or rather $10 billion, if you count, as reader Joe Goodart does, the $9 billion Dell has in the bank.)
Hard to believe that it's been only 11 years since Michael Dell, asked what he would do if he were Apple's CEO, answered:
"What would I do? I'd shut it down and give the money back to the shareholders." (link)
For the record, Apple's market cap today stands at $85.8 billion.
Don't cry for Michael Dell, however. According to a list of the 400 wealthiest Americans published last month, his net worth is still more than three times Steve Jobs’.
- Michael Dell: $17.3 billion
- Steve Jobs: $5.7 billion
For a timeline of other Apple v. Dell milestones, see MacDailyNews here.
Viswakarma is correct, there are only two computer companies that matter anymore, HP and Apple. With an engineering background I have always admired these two companies.
I have spent over $100 Million on hardware and software over the past 20 years from nearly all the vendors, and seen many companies come and go. 20 years later HP and Apple still are the leading innovators and still are on my top 5 vendor list. (Sorry to see IBM sell itself off in bits and pieces. Microsoft is still my most expensive vendor.) Dell is not worth even $23B. Every catalog mail order vendor is worthless (e.g. Packard Bell, Gateway, Dell).
I would like Steve Jobs to get serious about the enterprise and buy Sun Microsystems.
Not sure if you know this, but market cap isn't the price tag for a company. Dell couldn't be bought for anything near $23.5 billion. Read a book…
Whoa there, folks. Dell and Apple are in completely different businesses.
Apple are a software company that design beautiful hardware in which to deploy their primary creations.
Dell is, with respect, a distribution company for cheap hardware running even cheaper software.
SOFTWARE COMPANY vs DISTRIBUTION COMPANY.
Micheal Dell applied considerable energy and basic economic theory to the distribution of what is already in the market. He is a good, nay brilliant, economist, and an inspiration to everyone, as far as work ethic goes.
The divine being is playing a different sport. He is digital Jesus, come to save our asses from death by spreadsheet, and to deliver music to the people. Or something like that.
The actual key to why Dell is not producing as much money in comparison has to do with the niche that Apple has created. And that goes back to marketing. Dell uses Microsoft Windows which is so passe. Apple has the iPod which is botique. If you look at system reliability and other factors, Dell is a known for solid products. This may be why the Government has such lucrative contracts for their computers.
The key to why Dell is floundering and Apple is not? It's all in who the CEO directs his company to serve.
Michael Dell: $17.3 billion
Steve Jobs: $5.7 billion
Michael Dell serves Michael Dell.
Apple serves it's customers.
Nothing else needs to be said.
Apple should buy Dell keep what ever is useful then sell all the parts out and keep the cash 
In the end Apple moves up a notch in the amount of computers sold and the world is a better place with one less crappy computer maker running virus infested winblows.
Dell is a hardware company!!! There are better hardware manufacturers that Apple can choose from. Also, Dell is on the way out since HP has better quality in manufacturing Windows Computers. Ultimately, it will be Apple (Mac OS X) and HP (Windows) that will be left standing in the near future as viable computer manufactures.
At the time Michael Dell was right. Apple was a disaster. But then soon Steve came along and turned Apple from looming disaster to global leader. Dell is still very successful.
@Mr. Whipple: In addition to PED's comments to your posting, you should be aware that Apple's cash balance is significantly higher than Microsoft's (about $4 billion higher!) and is unencumbered by debt.
Having a hard time keeping up, Mr. Whipple?
Watch for IBM to buy it or Michael to take it private…. Apple wouldn't touch Dell if Dell's shareholders paid them to do it. Different missions.
Apple is the AOL of the computer industry. If you need handholding and think that monochrome is artsy, you idolize it. But in reality, you pay much more for much less. In a recessionary economy Dell wins and Apple loses.
Something wrong with M Dell's net worth surely. Dell is worth some B$24.5 and MD is worth B$17.3? Dell is on a hiding to nothing in the coming 2 years. It's hard to imagine what will prevent Apple from taking over the PC market. They will time their introduction of a cheap laptop that makes everything else irrelevant except for those who still think the Trabant is a good car.
Dell is a house of cards. If you really want to do an expose, do a little in-depth on its financials. Look at the funds that are dumping it from their portfolios.
Laying off almost 9,000. Trying to sell their manufacturing plants. Razor thin margins. Stuck with the whims of Microsoft when it comes to desktop software.
Dell is the new Gateway.
No wonder Apple has so much $$$ – new video outs on every new laptop model, 30 bucks a pop for adapters! I love 'em, but I hate 'em!
Apple is a completely difference company to Dell. Dell sells systems and services, Apple sells systems and develops software (from the ground up).
Apple should be compared to other companies that develop their own systems and software just as Dell are 'usually' compared with HP.
However, this is an interesting point to note though not very relevant.
@ashley
Apple did not really create a new industry either iPod or iPhone. They introduced disruptive technology and concepts to existing industries. FOr that matter, Apple has really never invented much of anything, but they are awesome at taking known, great underutilized technology and introduce into existing industries in a visionary way.
As Steve Jobs said about market research (loosely paraphrased): "We do not want find out and give people what they want, we want to give then what they do not yet know they want"…
Better idea for AAPL: Buy NFLX! Only 1.26 Billion and they have the largest share of the streaming content for the living room.
Prediction: Apple will beat MSFT on market cap by September 2009. Steve Ballmer will continue to throw chairs and act like a baby.
@ Mr. Whipple. The impetus for writing this article is that Michael Dell once suggested that Steve Jobs should shut down the company and give the money to the shareholders. Steve Jobs responded with, "We're coming after you, you're in our sights." The author is pointing out the irony of the situation. That's all.
Sweet, sweet revenge.
Rest assured, if they bought Dell, they would no longer offer Windows or Linux.
I would not encourage anyone to think of Dell as an attractive investment just because the stock is hammered. The stock can probably recover a few bucks but the company has never had a core. It is simply a JIT source for cheap boxes that run Windows. The volume purchases that make Dell fly can only be made by robust businesses that need lots of eyes on screens. But the new business model that is shuttering so much business is not going to vanish and abandoned buying pressures suddenly reopen these jobs. The model of what is a viable business (for Dell's customers) has already changed and the genie will not go back in the bottle. Waiting for customers to return is a terrible strategy, because it never happens. Dell might find a new business to be in but all its components that work well are an obstruction to finding that new thing. Apple has three times succeeded; once at holding on to a core business (Macs) and twice at creating new industries that they dominate: iPods and iPhones. AAPL is the better investment.
What an incredibly stupid article from who else…De Twit! Microsoft could buy Apple with its pocket change and still have enough left over to donate a giant plastic pancreas to poop Jobs.
ex ped: Interesting fantasy, Mr. Whipple, and a fascinating window into your colorful imagination. But for the record, Microsoft's cash holdings amount to $21.17 billion, while Apple's market cap — even at less than $97 a share — is $85.8 billion.
I would agree with David that Dell (along with alot of other stocks) is attractive as a seriously undervalued stock. As far as Apple buying them, pure fantasy, 1)Corporate ideology would mix like oil and water, 2)Apple buying a computer manufacturer that utilizes Windows or Linux would create serious questions as to whether Apple was tossing the towel in on their operating system. Apple needs the cash to maintain their R&D efforts to come up with the next "gottcha".
Thanks for this one!
Seriously, I've seen several comments about Dell as a good investment as either badly undervalued and/or takeover target.
But as Jobs said about making cheap computers, it's not in Apple's DNA.
Very few deals go for the market cap price. In fact, I can't think of one. So when you start off an article with statements like Apple could buy Dell at market cap price and have a billion left over, you lose credibility from the very beginning…EVEN IF…that isn't the point of your article.
@Ashley — Very astute observation. Good post. You're right, Dell is waiting for their customers to return and it just isn't going to happen. HP and Apple did take marketshare from Dell, but Dell also did it to themselves with poor support.
Despite what everyone here is saying, Dell is a technology manufacturing company and REALLY good at it. Dell has some very smart people, so I wouldn't count them out. But they are married to a model that doesn't work when the innovation curve is high.