IBM, Microsoft, Sun Microsystems, HP, Apple

by

Chris Fenot, Sam Hauxwell, Wade Reese

The .com Boom, Bust, and Recovery

The .com Boom• Internet was the way to the future

• Venture capitalist knew there could be huge gains from a winning investment

• Technology companies reinvesting money in other start up companies stock

• Most start up companies just wanted to be bought or go public, no long term plan

The .com Bust

• Some great ideas but backed by bad management

• Ideas without a feasibility plan were getting funded

• Dotcom’s weren’t making money• 30 million in Super bowl advertisements• Y2K scare• Scandals• Production Paradox

The .com Recovery

• Survival of the fittest

• Diversified companies carried on

• Venture capitalist invest more intelligently

• Total investment in computer related technology decreased

Hewlett-Packard Nasdaq: HPQ

Hewlett-Packard

• Rode dot com• Transition from Lewis Platt to Carly Fiorina

CEO’s• HP’s acquisition of Compaq

• Overview• HP is a information technology corporation• HP employs 151,000• Total Revenues $86.696 Billion • Net Income $2.398 Billion

• Product• HP specializes in the production of computer

products, software development, printers, digital imaging, servers, and PC’s.

Hewlett-Packard

• Market• Personal Computer Market Share at 14.8%

• Financial• Highest Trade at peak dot.com boom: $68.09• Lowest Trade at the end of 2001: $14.96• Currently trading at $32.18

• Future• The future of HP depends on the continued

success of its acquisition of Compaq and the performance of the IT sector, which HP supports

Apple Nasdaq: AAPL

Apple• Rode dot com

• Apple Computer’s CEO Steve Jobs took a different approach towards innovating.

• Apple focused on the internet

• Overview• Total Revenue $13.931 Billion• Net Income $1.335 Billion• Number of employees: 14,800

• Product• Emphasis on two product categories: The iMac

and the iPod for its hardware, and iTunes and Mac OS X for its software applications.

Apple

• Market• Apple’s market share in the US for desktop PC’s is 2.88%

and for portable PC’s is 4.99%• 28% of world HDD player market (2004)

• Financial• Highest trade at peak of dot.com boom: $37.60• Lowest trade at the end of 2001: $7.75• Currently trading at $63.38

• Future• The new strategy for Apple is to move into the Microsoft OS

market, making their iMac’s compatible with Windows. • Apple also seeks to replace its Power PC with the Intel

Processor.• Both are bold moves in an effort to compete for the widely

accepted standard of Microsoft as well as reduce the switching costs for Window’s users to adopt the iMac.

IBM Nasdaq: IBM

IBM

• Rode dot com • Company was highly affected with drops in share price of over $50.• Concentrated on internet

• Overview• Total Revenue of $91.134 billion (2005)• Net Income of $7.934 billion (2005)• Employees: 329,001 in over 170 countries

• Products• E-business• E-server• Mainframe computers• Software:

• DB2 (information management)• Rational (software development lifecycle)• Lotus (collaboration)• Tivoli (systems management and security)• WebSphere (application as well as data integration and middleware).

IBM

• Market• 29.8% in server market (2005)• 41% in server software market (2003)

• Financials• Dot com high at $134.9375• Dot com low at $80.0625• Currently trading at $80.02

• Future• IBM has more patents than any other IT

company: 3,248 solely in 2004• IBM is relying on its services and especially on

the e-business

Sun Microsystems Nasdaq: SUNW

Sun Microsystems• Rode dot com

• Company was highly affected with drops in share price of over $55.

• Overview• Total Revenue of $11.070 billion (2005)• Net Income of $ .107 billion (2005)• Employees: 35,000

• Products• Software – Java, Solaris• Desktop Systems• Servers• Storage

Sun Microsystems• Market

• 11.8% in server market (2003), #4 now

• Financials• Dot com high at $64.6563• Dot com low at $7.52• Currently trading at $4.54

• Future• Sun donated in 2005 1,600 patents to

the Open Source• More emphasis on pay as you go

programs

Microsoft Nasdaq: MSFT

Microsoft

• Rode .com• Anti trust issue• Stock was the highest at the end of the dot com bust

• Overview• International Computer technology company• $39.79 billion in revenues (2005)• $12.25 Billion in income (2005)

• Product• Microsoft Window• Microsoft Office• Xbox• MSNBC

Microsoft

• Market• 90 % of PC operating system market share• 85 % office application market

• Financial• Bubble high of $60.00 per share• .com bust low of $20.70 per share• Currently trading at $26.88 per share

• Future• Continually moving into new sectors of technology• Moving away from being a lager of technology

Comparison

Comparison – Key Points

• Companies that diversified their products rode the dot com with more ease

• Production Paradox – companies that invested wisely succeeded

• Each company fell by $25 to $50 during the bust of the

Any Any Questions?Questions?

Thank You!