In the past ten years or so, Apple has become one of the most beloved brands in the country. Their product offerings of iPods, iPhones, iPads, Macbooks, iTunes, and more captivate people like few other tech companies on the market. In fact, many Apple fans are criticized for the zeal they bring to their fandom of Apple. It’s as if the planets aligned for Apple over the last 10 years or so in its ability to woo consumers. Their plans, products, and choices have almost always yielded positive results. Plus, this love and captivation of Apple around the world has also made the company very, very rich.
Who’s the Richest of Them All?
With all the recent talk about how poorly Facebook and other social media start-ups are performing on Wall Street, the current news about Apple is quite welcome. Rick Newman at US News & World writes, “Apple’s market value is nearly $624 billion, eclipsing the prior record of $618.9 set by Microsoft…That makes Apple the most valuable company in history.” Of course, this figure is not adjusted for inflation. This news is not all good, nor is it entirely true according to some.
When Microsoft reached its zenith as the most valuable company in the world, it was impressive. Their success was a testament to the power of capitalism and American ingenuity (and a little bit of monopoly). But it was also the sign of the end for the company. Not completely, but Microsoft has never recovered. Newman comments on Microsoft’s rise: “From that point on, the company’s dominance over computer operating systems diminished. It became more dependent on purchasing innovating companies than on cultivating in-house breakthroughs.” Of course, Microsoft is still a successful and profitable company today, but the points Newman addresses are important to recognize.
Future of Apple
I think Apple will be able to hold on to its grasp of the market—and its top spot—for longer than Microsoft did. Apple has billions of dollars of cash on-hand. As long as they are smart about what they do with this cash, they can continue to foster “in-house breakthroughs.” The world is a different place than it was in 1999. Apple has a global market at its fingertips. Microsoft did not. Tablets and smart phones are products that still require a great deal of innovation, and Apple is likely to deliver on that. Microsoft had nothing similar in terms of products.
But being a student of history I recognized the inevitable. Quoting Richard Sylla, professor of financial history at NYU, the Wall Street Journal writes, “Just as Apple overtook Microsoft, someone inevitably will replace Apple. It is a challenge that not only caught up with Apple’s predecessors, but also faces other newly enormous market leaders such as Google Inc. and Amazon.com Inc.” However, I do think Apple will be able to continue to grow for quite some time. It will be years before it starts to fall, and it will take a long time for it to fall.
Claim in Question
Interestingly enough, some websites are claiming Apple is not the most valuable company in the world. Lawrence Latif at the Inquirer claims that Petrochina still holds the title of most valuable company. He writes, “In present day trading and thus ignoring inflation, Apple’s market capitalisation doesn’t top the charts, with Petrochina, a company traded in New York, Hong Kong and Shanghai worth $722bn.” Other sites are starting to address this story as well. Did the media jump to conclusions too quickly? Maybe.
Sooner or later, though, especially with the iPhone 5 and new tablets coming soon, Apple will single-handedly reach the top. It will be able to look down on Petrochina in the near future. There’s even a chance the company could become the first ever to reach a market capitalization value of over $1 trillion dollars. That’s still a bit far away, but it’s definitely not out of reach.
Do you think Apple is on the way down now, or is this another sign of their continued dominance?