Apple Nintendo Sony: The power of focus

Lets benchmark three iconic companies:

Apple Nintendo Sony

  • APPLE: Wednesday October 22 APPLE announced spectacular full-year results with a year-on-year net income increase of 38%. The results are even better than they look, because iPhone sales and income are spread forward over 2 years due to accounting rules. (See our comments on CNBC here)
  • NINTENDO: on August 29, 2008 Nintendo revised the forecast for full-year net income upward by +26.2% (See our comments on CNBC here)
  • SONY: in contrast, on October 23, 2008, SONY said that full-year net income (for the financial year ending March 2009) is expected to be 37.5% lower than previously predicted (see our comments on SONY’s 1Q results here on CNBC)

Apple Nintendo Sony – Lets look at today’s market caps:

  • APPLE market cap = US$ 85.6 Billion (about 4 x SONY)
  • NINTENDO market cap = US$ 37.2 Billion (about 2 x SONY)
  • SONY market cap = US$ 19.9 Billion

Apple Nintendo Sony – Why this dramatic difference in market caps? We believe its focus.

Apple and Nintendo are companies with clear focus. Lets look at the details below:

Comparing revenues (sales):

SONY = 3 x APPLE
SONY = 4 x NINTENDO

Annual revenues of Apple, Nintendo and SONY
Annual revenues of Apple, Nintendo and SONY

Comparing annual operating income:

APPLE = 3 x SONY
NINTENDO = 3 x SONY

Operating income of Apple, Nintendo and SONY
Operating income of Apple, Nintendo and SONY

Comparing operating margin:

APPLE = 9 x SONY
NINTENDO = 15 x SONY

Operating margin (operating income as a ratio of revenues) for Apple, Nintendo and SONY
Operating margin (operating income as a ratio of revenues) for Apple, Nintendo and SONY

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