By Carl Howe
I asked the following question last Thursday: Who will be the new tech leaders as the old ones fade?Well, we didn't get a lot of answers from the market Friday we hadn't already noted. But we did get confirmation of one we already knew: new leader Apple's (APPL) market capitalization of about $56 billion eclipsed old guard Dell's (DELL) $50 billion for the second time.
Google Finance and Reuters provided me with a bit of insight in that comparison that I hadn't realized though. Guess which company is more efficient as measured by revenue per employee? If you guessed Dell because of their efficient manufacturing model, you'd be wrong. Dell makes only about $870K per employee, whereas Apple is up to somewhere around $1.3 million per employee. And in terms of net income, Apple is about double the efficiency of Dell. No wonder their market cap is bigger.
I'll dive into the details of why this is so next week if readers are interested; leave a comment if you are.
And by the way, don't feel bad if you guessed wrong. Dell marketed its efficiency for years as part of its corporate story. Apple doesn't do that as much. Your impressions of a company are molded more by narrative the company tells than by most detailed analyses. Why? Because it's easier to tell a quick story at a party than to pull out a spreadsheet full of numbers. Stories get passed on and remembered better than the numbers. And no one goes back to check the numbers they heard at a cocktail party; they just remember what they heard. Call it cocktail buzz marketing, if you'd like, but it definitely works.
The chart below definitely says it all.
AAPL-DELL 1-yr comparison chart:
Full disclosure: I own some Apple stock.
