Apple

$1 Trillion and Counting

Apple

Apple recently became the first company in history to be valued at $1 trillion—the largest value ever recorded for a publicly traded company.

Apple has come up with many game-changing inventions in its lifetime, from the iPod’s click wheel to innovative operating systems to intuitive ways of interacting with touchscreens and touchpads. But Apple has grown as large as it is today mainly by selling a whole lot of iPhones.

How Apple makes its money

During the company’s 2017 fiscal year, Apple sold:

$141 billion in iPhones

$19 billion in iPads

$26 billion in Mac computers

$30 billion in services

$13 billion in Apple Watches, Apple TVs, and other miscellaneous products

“Our belief was if we kept putting great products in front of our customers, they would continue opening their wallets.”

—Steve Jobs

Secrets of Apple’s success

Apple has become such a uniquely valuable company by:

  • Releasing a string of successful products
  • Redefining how users interact with technology—through its intuitive designs and Jobs’ obsessive attention to detail
  • Crafting incredible branding and marketing campaigns
  • Creating an ecosystem of hardware, software, and services that gets users hooked on its products

What does a $1 trillion value mean?

The $1 trillion refers to Apple’s market capitalization, which is basically a measure of the total value of every share of the company’s stock. Since each share represents a tiny slice of ownership of the company, adding up the value of all the shares gives a picture of the value of the company as a whole. It’s a bit abstract, and it’s a value that will continue to change as Apple’s share price moves up or down.

A brief history of Apple

1976—Company founded in a garage in Los Altos, California, to develop and sell personal computers.

1980—Apple has its initial public offering.

1984—The Macintosh computer is launched.

1985—Founders Steve Jobs and Steve Wosniak leave the company. Sales start to fall.

1997—Steve Jobs returns to Apple and develops a plan to turn around the now struggling company.

2001—Launches the iPod.

2006—Introduces the MacBook.

2007—Invents the iPhone.

2011—Tim Cook replaces Steve Jobs as CEO. Steve Jobs passes away.

2012—Introduces the iPad.

2018—Apple’s market capitalization hits $1 trillion.

“That has always been the objective of Apple: to do things that really enrich people’s lives. That you look back on and you wonder ‘How did I live without this?’”—Tim Cook

What happens next?

Some investors worry that Apple has become overly dependent on the iPhone. Consumers’ tastes can change quickly, so it’s possible that a couple of less-than-perfect phone iterations could hurt Apple’s ability to charge a premium price for its products. Plus, as companies grow larger, inevitably their growth starts to slow.

Whether or not Apple will be able to keep growing, keep making the hottest phones on the market, and continue to innovate without Steve Jobs are probably the biggest questions facing the company and its investors today.

Closest rivals

Although Apple was the first company to cross the $1 trillion threshold, it probably won’t be the last. The companies next closest to the trillion mark in terms of market capitalization are:

  • Amazon—$969 billion
  • Alphabet—$872 billion
  • Microsoft—$843 billion

Fun facts:

  • “Mobi,” “Telepod,” and “Tripod”: These were some of the alternate names considered before Apple settled on “iPhone.”
  • At $1 trillion, Apple is larger than the 17th largest economy in the world (bigger than the Netherlands but smaller than Indonesia).
  • Ronald Wayne, the third founder along with Jobs and Wosniak, sold his 10% share in the company in 1977 for $800. Today, it would be worth $100 billion.

 

References

http://files.shareholder.com/downloads/AAPL/6360651272x0xS320193-17-70/320193/filing.pdf

https://www.inc.com/peter-economy/steve-jobs-19-inspiring-power-quotes-for-success.html

https://www.britannica.com/topic/Apple-Inc

https://www.google.com/finance

Finance.yahoo.com

https://www.inc.com/larry-kim/21-surprising-to-bizarre-facts-about-apple.html

http://www.imf.org/external/datamapper/NGDPD@WEO/OEMDC/ADVEC/WEOWORLD

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