Is Microsoft a Better Growth Story Than Apple?

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July 23 (Bloomberg) -- Bloomberg’s Cory Johnson and Bloomberg Businessweek’s Sam Grobart discuss R&D spending, Samsung’s ownership and tech earnings on “In The Loop.” (Source: Bloomberg)

36% jump in r&d spending year on year.

That is an incredible number.

What is cooking?

By cs.

I was updating my model and i punched in 1.6 billion in spending and research development.

It was a shopping -- shocking number.

A huge amount of spending.

What are they getting for that?

$6 billion a year on r&d. it is a fairly incredible number and that does not includes capitals benchers and acquisitions and so on.

Compare that to microsoft, spending over $3 billion in the same quarter from the results we saw last night, that is what it takes to have a stake in the game invented technology right now.

Ipads, watches, who knows what is next.

We expect a new iphone and the current quarter from apple.

Spending vast amounts of money to make that stuff happen.

We have heard potential iwatch were i time.

Is it all just that or is there something else going on here behind product development?

This is the kind of spending we saw before the first iphone came out.

With apple, there are two kinds of spending.

We hear and talk a lot about that.

There is the underlying infrastructure that powers the devices and services, things like what apple has slowly worked out, a big change in retailing and location-based services.

It is not something that necessarily has the big splash of a new phone or an entire new category, but it has the potential to bolster the existing businesses and offer new services and features to consumers.

We had david kirkpatrick on at the 8:00 hour and he said microsoft is actually a better growth story right now than apple.

Do you agree?

I love to disagree with him.

I do not know.

We do not know.

Microsoft is a battleship.

The way the business model works, with the recognition of deferred revenues, we can kind of see what is happening over a long-term there.

The surface is a fascinating device that they talked about over 400 million sales in the last quarter.

I think there are interesting things going on in the cloud with microsoft.

Some dispute that.

We will see that rollout over time.

Two sam's point, the ecosystem of apple, you could look at the macintosh business and the huge growth they have seen, and see a big growth story there.

It is an open question of what new things will drop from apple.

I will say if the ipad were to come into existence this year, as it did three years ago, the size of the business would be so much smaller compared to the rest of apple right now, it would just be a drop in the bucket.

Whatever the new device might be to apple, it might not show up so much in the result because apple is so huge right now.

I am talking about tablets, the whole thing.

It leads to the other story of the morning, tech leadership at samsung.

The chairman enters his third month of hospitalization following a heart attack as his family risks losing his grip on the conglomerate.

You have done a lot of work on the company and what it means.

Explain how important the lee family is.

They control the family group, the conglomerate that can -- and includes sam some electronics.

Dozens that permeate all of daily life.

An older gentleman, he is currently in the hospital, and we can say with certainty that at some point, he will die.

We do not know sooner or later and in power will pass to his son, but that will come with very big repercussions.

We should also point out they only own about two percent of the stock, 60% of the control.

A huge and complex organization.

A complex ownership structure where the family controls a little bit of one part of the company which in turn cross holdings throughout the rest of the company.

The entire company is owned by a theme park.

The chill group is a samsung theme park right next to his executive training facility.

That actually officially owns the entire samsung.

Thank you so much.

Also editor-at-large cory johnson.

We will hear from you later on today as well when it comes to facebook earnings.

Moving and shaking this hour,

This text has been automatically generated. It may not be 100% accurate.


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