TECHNOLOGY (COMPUTERS)

SECTORApple – Dell – HP

Apple Inc.

Sheila Jung

Eric Kao

         1976: Founded by Jobs, Wozniak, and Wayne.

        1977: Incorporated, without Wayne.

        1984: The first Macintosh 

        1997: Apple Store; Microsoft Office

        1998: iMac .

        2001: The first Apple Retail Store and Mac OS X

        2006: Intel-based Macs, MacBook Pro and iMac 

        2007: iPhone and iPod Touch

        2010: Introduced new and improved Ipad

Employees: 49,000 Sales: $65.23 billion (2010)

Stock Exchanges: NASDAQ, NYSE Ticker Symbol: AAPL

Background

COO: Tim Cook• Previous VP of

Corporate Material at Compaq• Reduced

inventory levels and streamlined supply chain, increasing margins• Acted as CEO

when Steve Jobs took leaves of absences

CFO: Peter Oppenheimer

• Previous CFO of ADP and IT Consultant at PwC

Steve Jobs: Co-Founder and CEO• Emphasizes Design and Aesthetic Appeal• Awarded over 230 patents or Patent

Applications • Previous CEO of Pixar Animation Studios and

Current Board Member of Walt Disney Company

Management

Strengths Innovative Brand, Aesthetic, Design Marketing and Accessibility Product Development Steve Jobs

Weaknesses Business Practices Expensive Product Defects and

Complaints Not Share-Holder Friendly Steve Jobs

Opportunities Advancement in Technology Improvement in Technology Rapid Changing Industry and

Response to Client Feedback Brand Loyalty Market Diversification and

Online Presence

Threats Competition High Priced Products Economic Crisis Product Substitution Effect Copycat Effect

SWOT Analysis

Apple Quantitative Analysis

Apple Qualitative Analysis

Apple Technical Analysis

One Year Range

Apple Horizontal Analysis

2010 2009 2008 2007 20060.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.0065,225.00

42,905.00

37,491.00

24,578.00

19,315.00

14,013.00

8,235.006,119.00

3,495.00 1,989.00

Apple Horizontal Analysisin Millions of $

Total Revenue

Gross Profit

Net Income

2010 2009 2008 2007 20060.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

45,000.0039,541.00

25,683.0024,294.00

16,426.0013,717.00

Apple Total Cost of Revenue

in Millions of $

9/25/2010 9/26/2009 Amount Increase Percent Increase

Total Current Assets 41,678,000

31,555,000

10,123,000 32.08%

Total Current Liabilities

20,722,000

11,506,000

9,216,000 80.10%

Total Revenue 65,225.00

42,905.00

22320.00 52.02%

Apple Vertical Analysis9/25/2010 % of Total 9/26/2009 % of Total

Current AssetsCash/Cash Equivalents 11,261,000 27% 5,263,000 17%

Short Term Investments 14,359,000 34% 18,201,000 58%

Net Receivables 11,560,000 28% 6,192,000 20%

Inventory 1,051,000 3% 455,000 1%Other Current Assets 3,447,000 8% 1,444,000 5%Total Current Assets 41,678,000 31,555,000

Current LiabilitiesAccounts Payable 17,738,000 86% 9,453,000 82%

Other Current Liabilities 2,984,000 14% 2,053,000 18%Total Current Liabilities 20,722,000 11,506,000

Stockholders' EquityCommon Stock 10,668,000 22% 8,210,000 26%

Retained Earnings 37,169,000 78% 23,353,000 74%

Other Stockholder Equity -46,000 0% 77,000 0%Total Stockholder Equity 47,791,000 31,640,000

Emily ZhangJuan Carlos

Background1984: Founded, 26 years ago

1987: Started International Operation

1988: Public on NASDAQ

1988: 3.5 Million shares; $8.5 per share

2011: 6.15 Million shares; $15.73 per share

1991: First Notebook

1996: Initiated Internet Operation

2011:No.38 on the Fortune 500 (2011)

Principle operating Units:

Dell Americas, Dell Europe;

Dell Asia Pacific –Japan;

Middle East and Africa.

1992 Dell Precision 386SX/25, Sale Price: $1,295 

Current Employees:

Dell: 100,300

Apple: 49,000

HP: 324,600

ManagementMichael Dell: Chairman, CEO, FounderFounded Dell at age 19Youngest CEO ever to earn a ranking on the Fortune 500: 1992

12 members in Executive Leadership Team 12 members in Board of Directors

Paul Bell: President of the Public and Large Enterprise business MBA from Yale School of Organization and Management. 14 years in Dell; Born in North Africa;7 years in Europe;Broad international experience;Deep insights into all segments of the company

Steve Schuckenbrock: Dell Service PresidentFormer role in Dell: Chief Information OfficerPresident of Large Enterprise

Strengths• Customization• Diversified Products• Business operation• Customer service

Weaknesses• Labor-intensive Assembling• Risks for quality

management• Inflexible supply Chain

Opportunities• Customer service• Cohesion between depts. • More customization

Threats• Not standing out from the

rest• Not keeping up with

technology changes• Competitors producing at

low cost

SWOT Analysis

Quantitative AnalysisStock Activity

Last Price  16.01

52-Wk High  16.45

52-Wk Low  11.34

Volume  29.44 MilAvg Daily Vol (13 Wks)  23.63 Mil50-Day Moving Average  15.06200-Day Moving Average  13.86

Volatility (beta)  1.42

Fundamental Data

Debt/Equity Ratio    0.77

Gross Margin  18.53%

Net Profit Margin  4.28%

Shares Outstanding  1.91 Bil

Market Cap  30.2 Bil

EPS  1.35Institutional Ownership  70.50%

Qualitative Analysis

6 Design Centers located mainly in U.S. Singapore, Mainland China, Taiwan.Transformation on the way: Data Center!

Business will be centered on services and the bigger gear used in data centers — server computers, storage and networking equipment.

Technical AnalysisOne Year Range

Dell Horizontal Analysis

2011 2010 2009 2008 20070.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.0061,494.00

52,902.00

61,101.00 61,133.0057,420.00

2,635.00 1,433.00 2,478.00 2,947.00 2,583.00

Dell Horizontal AnalysisIn Millions of $

Total Revenue

Gross Profit

2011 2010 2009 2008 2007Total Revenue 61,494.00 52,902.00 61,101.00 61,133.00 57,420.00Gross Profit 11,396.00 9,261.00 10,957.00 11,671.00 9,516.00Net Income 2,635.00 1,433.00 2,478.00 2,947.00 2,583.00

Source:http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?symbol=DELL

2011 2010 2009 2008 200740,000.00

42,000.00

44,000.00

46,000.00

48,000.00

50,000.00

52,000.00

50,098.00

43,641.00

50,144.0049,462.00

47,904.00

Dell Total Cost of Revenue

Dell Vertical Analysis

2011 2010 2009 2008 20070.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.0038,599.00

33,652.00

26,500.00 27,561.0025,635.00

7,766.005,641.00

4,271.00 3,829.00 4,439.00

Dell Total Assets/Liabilities/Euityin Millions of $

Total AssetsTotal LiabilitiesTotal Equity

2011 2010 2009 2008 2007

Total Assets 38,599.00 33,652.00 26,500.00 27,561.00 25,635.00

Total Liabilities 30,833.00 28,011.00 22,229.00 23,732.00 21,196.00

Total Equity 7,766.00 5,641.00 4,271.00 3,829.00 4,439.00

Source: http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?lstStatement=Balance&symbol=US%3aDELL&stmtView=Ann

Leanne ChouQueenie He

YoYo Li

1939: HP was founded by Bill Hewlett and Dave Packard

1947: HP incorporated with Revenue – 851,287 and 111 employees

1957: HP went public and employees receive stock

1966: HP invented its 1st computer- HP 2116A

1980: HP’s 1st PC

1981: HP moved to China 

1983: HP introduced Touch screen PC

2002: HP and Compaq merged

2006: HP acquired Mercury Interactive Corp.

2008: HP acquired Electronic Data Systems Corporation (EDS)

2010: HP acquired Palm

Background

HPQNet Revenue in 2010: 126.3

BCurrent employees: 324,600

Léo Apotheker: President & CEO Main focuses for H.P.: innovation, employee engagement, and operational

efficiency Former CEO of SAP Founded & COO of ECsoft BV Held various leadership positions in: ABP Partners, McCormack & Dodge

Europe, S.W.I.F.T. and Altex GmbH.

Management

Randall D. Mott: VP & CIO responsible for the global information technology (IT)

strategy and all of the company's IT assets Former VP and CIO for Dell Inc. & Wal-Mart

Catherine A. Lesjak: VP & CFO Served as CFO since Jan 1, 2007 Served as interim chief executive officer of HP from Aug 2010

to Oct 2010 Was previously HP’s senior vice president and treasurer

Strengths

-Well-established brand/brand reputation-Wide variety of products and services -World’s biggest computer hardware

Weaknesses

- Large long term debts (21B)-Hardware supplies complaints/bugs-Lack of in-house management consulting division

Opportunities

-Emerging markets-Government shifting to cloud computing-Acquisition of EDS-New technological innovations

Threats

-Major competitors in industry-World recession—lower prices-Computer substitutes -Retaining technical talent

SWOT Analysis

HP Quantitative Analysis

Market Cap (intraday) 88.31 B

Enterprise Value (May 9, 2011) 98.85B

Trailing P/E (ttm, intraday): 10.41

Revenue (ttm): 127.16B

Total Cash (mrq): 9.93B

Total Debt (mrq): 20.47B

Current Ratio (mrq): 1.18

Beta 0.99

Historical Prices Chart: Stock price: $40.81 Declining (As of May 6th, 2011)

Technical AnalysisOne Year Range

HP’s executive changes HP feel pressure from IPad2 Benefit From Government's Shift to Cloud

HP Qualitative Analysis

HP Horizontal Analysis

2010 2009 2008 2007 20060.00

20,000.00

40,000.00

60,000.00

80,000.00

100,000.00

120,000.00

140,000.00

HP Horizontal Analysis in Millions of $

Total RevenueGross ProfitNet Income

2010 2009 2008 2007 20060.00

20,000.00

40,000.00

60,000.00

80,000.00

100,000.00

120,000.00

95,956.0087,489.00 89,699.00

78,887.0069,427.00

HP Total Cost of Revenuein Millions of $

2010 2009 2008 2007 2006

Total Revenue 126,033.00 114,552.00 118,364.00 104,286.00 91,658.00

Gross Profit 30,077.00 27,063.00 28,295.00 25,041.00 21,903.00

Net Income 8,761.00 7,660.00 8,329.00 7,264.00 6,198.00

HP - Vertical Analysis Jan 31, 2011 % of

TotalOct 31, 2010 % of Total

Cash/Cash Equivalents $9,934,000 19.325% $10,929,000 20.17%Net Receivables $19,534,000 38.001% $21,467,000 39.619%Short  Term Investments -- 0.00% $5,000 .00923%Inventory $6,747,000 13.125% $6,466,000 11.933%Other Current Assets $15,189,000  29.548% $15,317,000 28.268%Total Current Assets $51,404,000 $54,184,000

Accounts Payable 32,508,000   74.543% $34,719,000   70.277%Short/Current Long Term Debt $3,381,000   7.753% $7,046,000   14.262%Other Current Liabilities $7,721,000   17.705% $7,638,000  15.461%Total Current Liabilities $43,610,000 $49,403,000

Common Stock $22,000 .05339% $22,000 .05432%Retained Earnings $34,005,000 82.524% $32,695,000 80.730%Capital Surplus $10,877,000 26.397% $11,569,000 28.566%Other Stockholder Equity ($3,698,000) -8.974% ($3,837,000) -9.474%Total Current Assets $41,206,000 $40,499,000

HP Vertical Analysis

2010 2009 2008 2007 20060.00

20,000.00

40,000.00

60,000.00

80,000.00

100,000.00

120,000.00

140,000.00 124,503.00114,799.00 113,331.00

88,699.0081,981.00

40,449.00 40,517.00 38,942.00 38,526.00 38,144.00

HP Total Assets/Liabilities/Equityin Millions of $

Total Assets

Total Liabilities

Total Equity

2010 2009 2008 2007 2006

Total Assets 124,503.00 114,799.00 113,331.00 88,699.00 81,981.00

Total Liabilities 84,054.00 74,282.00 74,389.00 50,173.00 43,837.00

Total Equity 40,449.00 40,517.00 38,942.00 38,526.00 38,144.00

HP – Horizontal Analysis 2010 2009

Total Asset 124,503,000 114,799,000 8.45%

Total Liability

84,054,000 74,282,000 13.16%

Total Equity 40,449,000 40,517,000 - 0.17%

Questions?

Thank You!