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Apple becomes the first $1T company
- metalliqaz 8y agoIf time travel existed, I'd go back and buy me some 1980's Apple stock. I think we just proved time travel can't happen.
- __sr__ 8y agoOr 1996.
- jlv2 8y agoSeriously, my wife and I bought a pile of Apple stock in 2004. I wonder if we were time travelers in that old timeline.
- joemag 8y agoOr it does, but the person is smart enough to diversify to avoid suspicion :). Potentially because they tried that several times, each time going back and adjusting the plan.
- philliphaydon 8y agoI think 1 of 2 things would happen. If someone went back in time and bought stock. It would branch another timeline. Or If someone went back in time and bought stock. The timeline is altered and we would know only that the time owned stock. But then does that mean that the future has already happened and the past exists at the same time as the future and both the future and the past is constantly changing? Omg my head hurts now.
- riffraff 8y agoyou're forgetting the paradox free fixed timeline thing. One can go back in time, but he cannot buy stock because he did not in fact buy stock.
- pilsetnieks 8y agoOne can go back in time but he cannot displace the air atoms where he appeared because he did not displace the atoms in the first place.
- mikekij 8y agoI legitimately love that discussions of company valuations can morph into discussions of time travel on HN. Favorite comment threads anywhere.
- endorphone 8y agoOne can go back in time but they materialize in the emptiness of space and die, long left behind by our galaxy moving at 1.3 million miles per hour.
- zeristor 8y agoMaybe someone advanced enough to master time travel no longer has need for money? A bit like saying we could go back three thousand years and corner the market in nifty sea shells
- newswriter99 8y agoJust go back to 2009 and buy bitcoin, then sell it on 15 Dec 2017 at $17,500.
- prolikewh0a 8y agoI personally just use the wayback machine.
- TuringNYC 8y agoPretty awesome how we can all be millionaires as long as we can complete historical information and can choose our buy and sell dates :-)
- benologist 8y agoAvoided the most taxes in history too!
- gorkemyurt 8y agoProbably lifted thousands of people out of poverty!
- oculusthrift 8y agoyeah probably chinese iphone makers. (not americans)
- chii 8y agoso poor people outside america don't count as people?
- deleted 8y ago[deleted]
- UncleMeat 8y agoAre those things mutually exclusive? Apple is sitting on hundreds of billions in cash. They could literally make a million people rich just by gifting the money. But they don't.
- Theodores 8y agoIT takes two to tango, the Irish government was ordered by the E.U. to pick up those ten billion or so of taxes but they didn't think it would be the thing to do and didn't demand what was rightfully theirs.
- ryanmercer 8y agoExcept, you know, all the sales tax collected in their retail channels. And employment taxes on their 80,000 domestic employees. And property taxes. And real-estate fees. And government testing. And the obscene amounts of duties they pay importing every single thing they make. That's just for the U.S., in every other country they do business those apply as well (with exception of perhaps the import duties for business done in China).
- deleted 8y ago[deleted]
- sna1l 8y agoFirst public trillion dollar company, right? Source: http://www.visualcapitalist.com/most-valuable-companies-all-time/ http://www.visualcapitalist.com/most-valuable-companies-all-...
- nathanaldensr 8y agoIn. History. :: serious face :: I'd say the Washington Post is off by maaaaaaaybe an order of magnitude, or more.
- xhrpost 8y agoOr even: https://www.marketwatch.com/story/petrochina-soars-to-1-trillion-market-cap-in-debut https://www.marketwatch.com/story/petrochina-soars-to-1-tril...
- ryanmercer 8y agoI guess you missed where that infographic says "inf. adjusted". Regardless of inflation adjusted or not, Dutch East India shouldn't be considered given their rampant use of slave labor. doing a lot of business off of slave trade (pretty easy to make money when you're kidnapping people and sailing them across an ocean then selling them), having a nearly absolute monopoly, and uh... being government backed.
- jandrese 8y agoKind of arbitrary to exclude a company because it uses slave labor or other immoral practices. Your list of giant multinationals would be very short indeed. No textile producers for example except for some tiny boutique shops. No petrochemcial companies at all. No agribusiness. Modern society is built on the suffering of the poor and disenfranchised.
- ryanmercer 8y ago>Kind of arbitrary to exclude a company because it uses slave labor or other immoral practices. No it is arbitrary to say "nuh uh this company back when was worth a trillion dollars, if we adjust for inflation". Apple is literally the first worth a trillion United States dollars, a currency that did not even exist for the first 190 years of the Dutch East India company.
- tehabe 8y agoAn honest question, why do people really care about the market capitalisation of a company?
- oculusthrift 8y agoit’s one number that’s easy to get understand.
- tehabe 8y agoeasier to understand than revenue?
- cakebrewery 8y agoBecause investing has become integral in personal finance and market cap gives an estimate of a company's value, room to grow, etc.
- kovek 8y agoI appreciate how you state that investing has become an internal part of personal finance. I agree with you, but unfortunately nobody taught us this where I am from.
- TheGRS 8y agoSame for me, other than tidbits I got from my parents occasionally. Like many of the important things I learned in life, I had to teach myself.
- tehabe 8y agoBut for investing the market cap is irrelevant, the stock price development is relevant, dividends are relevant, interests are relevant. There are a lot more indicators which are more relevant if you want to invest in a company or not than the market cap.
- Leary 8y agoThe trillion dollar mark is an artificial one for sure. But the market capitalization is a good proxy for the financial power of a company. It's basically what the market values the entire company to be worth. If an alien has $1 trillion dollars, it can theoretically buy Apple (if the shareholders are willing to sell, and if the US regulatory agencies would approve the acquisition.)
- amaccuish 8y agoHmm. I'm waiting to see what the iPhones are like. I sense trouble brewing.
- coldcode 8y agoWhen I worked at Apple in the mid-90's (BS before Steve) they lost $1B while I was there. I left and moved away because I didn't want to be there when it was sold or went out of business. Exactly one year later Steve came back. Oh well. Being there at the time not one person would have ever thought Apple could be viable much less worth $1T.
- HaHa31 8y agoNo. It is the first PUBLICALY TRADED company on the US STOCK MARKET to be valued at $1T. There have been many companies that have broken that point in inflation-adjusted and NON-inflation-adjusted valuations. Three big ones are the Dutch East India company, the most valuable company in history, Standard Oil, the most valuable US company ever, and Saudi Aramco, the current, most valuable company. I've seen to many articles claiming this today, so I rage wrote this on mobile. See article for numbers: http://www.visualcapitalist.com/most-valuable-companies-all-time/ http://www.visualcapitalist.com/most-valuable-companies-all-...
- Leary 8y agoI have found the calculations for these historic companies to be dubious. They mostly calculate the worth of a company in relation to some historical GDP figure and apply that percentage on a modern GDP figure. Think about it, how can the Dutch East Indies company be worth $7 trillion dollars when the Netherlands today has a GDP of only $900 Billion, which is after centuries of economic growth. The Dutch East Indies company may have been comparably more powerful in relation to its time though.
- hokumguru 8y agoThe VOC basically owned the entirety of trade in SEA. It's not hard to imagine a valuation of 7 trillion when they had a monopoly of an entire continent's worth of trade (spices!) for two centuries.
- Leary 8y agoLet's put it this way. According to Maddison, https://www.rug.nl/ggdc/historicaldevelopment/maddison/releases/maddison-database-2010 https://www.rug.nl/ggdc/historicaldevelopment/maddison/relea... The entire world's GDP in 1700 was $371 Billion (1990 International Dollars). That would mean the VOC's value then was ~10x the global GDP, which I find hard to believe. Or if that doesn't convince you, consider the world population in 1700 was 700 million people. That would mean the Dutch Indies Company's value per person is $10,000!
- mikekij 8y ago"A $600 phone?! Who's going to buy a $600 phone?!" -Steve Balmer
- antris 8y ago"... and it won't appeal to business customers because it doesn't have a keyboard"
- pastor_elm 8y agopeople line up to buy $400 nikes. A $1400 phone every 2 years doesn't sound so unreasonable.
- Analemma_ 8y ago“No wireless. Less space than a Nomad. Lame.”
- 24gttghh 8y agoAhh the Creative Nomad Jukebox Zen Xtra. What an awful name it had. An mp3 player one could slap a larger 2.5" HDD into, and with a replaceable battery. Mine still sits on my desk, a monument to a forgone era. The case front and back are aluminum and removable, which made it easy to spray-paint :)
- foobarchu 8y ago
- 11thEarlOfMar 8y agoNot so fast, they bought back $20 Billion in stock last quarter.
- donarb 8y agoThat has been accounted for already. Before the buyback, the stock would have had to reach $203, after the buyback, the stock needs to reach $207.
- GlenTheMachine 8y agoI went to grad school with a guy who, the day Apple stock hit $14 a share, decided to spend $500 of his grad student stipend to buy some. He figured Apple's cash on hand was worth more than $14 a share. I thought he was nuts. I was an idiot.
- weavie 8y agoDoes he still own the shares?
- GlenTheMachine 8y agoI haven't asked. But he takes his family on some pretty amazing vacations. He's doing well for himself. And he's still buying Apple products...
- paulpauper 8y agodoesn't mean he held them though
- ben174 8y agoThis is what I tell everyone when they kick themselves for not buying BTC when it was $0.25. You would have sold them the second they hit $1.00. The only people I know who got rich off BTC are those who found an old wallet on an old drive in their garage.
- foobaw 8y agoDefinitely - getting rich off these things means you have to go against convention. People have to call you "crazy" or "wild."
- privacypoller 8y agoDon't get your causation mixed up though. Most of those people are actually crazy, wild and broke.
- paulpauper 8y agoEveryone talks about Apple as the best possible investment, but an investment in XEM or XRP (Nem or Ripple or Stellar Lumens) in early 2017 surpassed all of Apple in its 30 year history. My money is on Google, Facebook or Amazon eventually surpassing Apple though
- jlv2 8y ago> but an investment in XEM or XRP (Nem or Ripple or Stellar Lumens) None of those is an investment in something with inherent worth. Hence, I'd not call them an investment, but pure speculation.
- chatmasta 8y agoThe worth of a share is what someone will pay you for it.
- losteric 8y agoA share is fractional ownership of the underlying company and all it's assets - that is what gives it value. A "cryptocurrency" is merely worth what someone else is willing to pay (hence speculative).
- chatmasta 8y agoNo, what gives a share value is that someone else is willing to buy it from you for a certain price. The fact that it represents fractional ownership is why someone is willing to pay a certain price to buy it from you. But fundamentally, the value only exists as long as there is a counterparty.
- guntars 8y agoYes, yes, and cash only has value because someone else is willing to give you something for it. Congrats, you've realized that it's all made up and nothing is fundamentally valuable!
- paulpauper 8y agoI don't own an Iphone and neither does anyone I know, but good for them.
- rayiner 8y agoGood for it. Becoming a trillion dollar company selling quality products people love. Not data mining everything about your life and using it for advertising (Google), ruthlessly destroying competition (Microsoft), or destroying the environment (Exxon). How old fashioned.
- tschellenbach 8y agoOn the other hand. I think Google creates way more value for the world, they are just not as good as Apple at capturing that value. Android, Maps, Docs, Gmail, Navigation, Analytics are all (mostly) free.
- deleted 8y ago[deleted]
- onion2k 8y agoThey're not free. They just don't cost money. Arguably they're very expensive.
- reaperducer 8y agoThey're not free. They just don't cost money. Arguably they're very expensive. This is a distinction most people don't grasp. I didn't, myself, until recently when a briefing from the legal department resulted in scouring the word "free" from eight web sites and replacing the word with "at no cost."
- pliny 8y ago>“Apple’s $1 trillion cap is equal to about 5 percent of the total gross domestic product of the United States in 2018,” said David Kass, professor of finance at the University of Maryland. “That puts this company in perspective.” The comparison would be Apple net income (~$50B) vs. GDP, not market cap (which has units of USD) vs. GDP (which has units of USD per year).
- drexlspivey 8y agoGDP is more like a country's Turnover than Net Profit
- dfee 8y agoI think the analogy holds, unless your bank account reflects your payroll for the year (no costs).
- lowkeyokay 8y agoThat’s debatable. There are a number of ways to calculate GDP. One is the sum of value added, as in the value of the end product minus the value of input. Another is the total sum of income from labor and assets. Since it includes time spent it is not really net profit but it’s not turnover either. It’s some hybrid but, I would say it is closer to net profit.
- usrusr 8y agoQuite a funny hybrid indeed: if I pay you to take my money, and you pay me to take your money, somehow GDP would have increased. It's a measure of economic activity (of which our little give-and-take game would be an example) and it is meaningful under the assumption that all that activity happens for more rational reasons than just trolling economists. Note that our little give-and-take game would be a very expensive example of such trolling, if somehow the tax-man got involved.
- rayiner 8y agoOr, the net present value of the US economy plus assets, which is probably pushing a quadrillion dollars.
- maxshmax 8y agoIt's worth noting that this is the first U.S. company to hit $1 trillion, not in the world. Also, it's still intraday, so Apple has not technically reached that point yet.
- JumpCrisscross 8y ago> this is the first U.S. company to hit $1 trillion What's the other one?
- indy 8y agoNorway’s sovereign wealth fund is (or was?) worth over $1 trillion
- Analemma_ 8y agoCan I buy shares in Norway’s sovereign wealth fund as an American? If not, it’s not really a meaningful comparison.
- maxshmax 8y agoPetroChina did it in 2007: https://www.marketwatch.com/story/petrochina-soars-to-1-trillion-market-cap-in-debut https://www.marketwatch.com/story/petrochina-soars-to-1-tril... *edited to include link
- yesforwhat 8y agoincluding state owned companies, which is really just government assets themselves, isn't really relevant.
- spacehome 8y agoApple is the first public company to reach a trillion. There are arguments that Aramco is worth vastly more, but it's not publicly traded, so it's hard to put a number on it.
- a5huynh 8y ago
- wil_I_am_27 8y agoSoon Amazon will be in this list.
- pseudonym2 8y agoThis will be very controversial, especially in HN, but market cap doesn't mean shit. Apple has roughly $50B in revenue and $120B in equity. Most of it's products could be replaced in less than 5 years by a competitor. Market cap is a measure of public trust among other things but not actual worth or value to society.
- jakarta 8y agoEquity is not a measure of actual worth, it's a product of accounting conventions (which are increasingly incorrect) A company's value is the free cash flow available to owners from now to kingdom come discounted back to the present.
- tomp 8y ago> Most of it's products could be replaced in less than 5 years by a competitor. I wish this was true, but I think you’re severely overestimating Apple’s competitors... In the last 5 years, noone has even approached them, neither in hardware nor in software, even though the formula is painfully obvious (high quality hardware that keeps working/updating, and non-annoying easy-to-use software that’s friendly to powerusers).
- propman 8y agoYour numbers are completely wrong...apple just had $50B in revenue for its weakest quarter...last quarter they had $60B and in their strongest quarter Q4 they had $89B pre trump tax cuts. If their current growth rate stays the same Apple will hit $280B revenue and $65B in profits. I’m not sure how you are calculating equity but they have $240B in plain cash. They have so much in IP, and extremely low interest loans. Market cap does mean something, it’s literally the most meaningful value the world puts on a company
- ksec 8y ago>This will be very controversial It is, and not only just on HN. Because Apple has $220B in revenue, not $50.
- mentos 8y agoI just finished Creativity, Inc. by Ed Catmull who was one of the founders of Pixar and current president. Highly recommend the book for anyone on HN. In the book Ed Catmull wrote that Steve Jobs would say regularly "as brilliant as Apple products were, eventually they all ended up in landfills." Gives you some pause to realize how quickly Apple's business could be relegated to the trashbin with no new products to pick up the baton.
- donohoe 8y agoPetroChina was the first for a brief period back in 2007. Apple is the first trillion-dollar company in the United States, though. https://www.theguardian.com/business/2007/nov/06/china https://www.theguardian.com/business/2007/nov/06/china
- KaoruAoiShiho 8y agoHere's what a trillion dollars looks like: http://www.pagetutor.com/trillion/index.html http://www.pagetutor.com/trillion/index.html
- tonyedgecombe 8y agoOr about $3,000 for every person in America.
- dev_dull 8y agoI think about such a large number this is and I really am not surprised. Apple has created a product that I use all throughout the day. I won’t leave home without it and I’ll drive back if I forget it. It’s so addictive that I have to take active steps against using it too often around my wife or kids.
- hndamien 8y agoBesides my family there are 5 possessions I get mildly depressed if I don't have. My iPhone, my Bragi dash, my Tesla, my house, my Bitcoin. Maybe 2/3 of these I can see being usurped by something better - I'll leave it to the reader to guess.
- mkaziz 8y agoI wish I'd bought Apple stock in December instead of Bitcoin.
- themihai 8y agoSpeculative investments are like gambling. Don't be sorry for Apple. Try FB...they may hit the trillion dollar cap as well..who knows...it's all just speculation.
- bufferoverflow 8y agoFB has a problem with young people leaving. I wouldn't invest in FB.
- themihai 8y agoWell, Apple had one or two problems as well and here we are...
- parenthesis 8y agoWhat are these young people using instead? WhatsApp? Instagram?
- bufferoverflow 8y agoYes,and Snapchat.
- Steve886 8y agoAlright. Who's next?
- RankingMember 8y agoGotta be Alphabet
- cdransf 8y agoMy grandparents bought and still own Apple stock from their IPO. Seems like good news for them.
- kevmo 8y agoThat's great. Companies need to start IPOing earlier again. http://blog.pmarca.com/2013/03/26/unshackle-the-middle-class/ http://blog.pmarca.com/2013/03/26/unshackle-the-middle-class...
- throwaway5752 8y agoThis has some decent charts and historical perspective (inflation adjusted): https://www.fool.com/investing/general/2012/08/22/a-history-of-ridiculously-big-companies.aspx https://www.fool.com/investing/general/2012/08/22/a-history-...
- KaoruAoiShiho 8y agoIs Samsung Electronics ridiculously undervalued or what? It generates more profit than Apple https://wccftech.com/samsung-posted-higher-profit-than-apple-q2-2018/ https://wccftech.com/samsung-posted-higher-profit-than-apple... yet is valued at only $290 billion instead of $1000 billion. What the heck.
- temuze 8y agoI think there's three big reasons. Reason #1: Apple has 243.7B in cash right now. That'll already push them to nearly Samsung's valuation. Reason #2: Samsung's business is more vulnerable. Most of their profits came from the chips division: https://money.cnn.com/2017/07/27/technology/samsung-profit-apple/index.html https://money.cnn.com/2017/07/27/technology/samsung-profit-a... Samsung sells components to many companies, including Apple. In fact, Samsung makes more money from iPhone than they do from the Galaxy S8: https://www.theverge.com/circuitbreaker/2017/10/2/16404430/samsung-iphone-x-galaxy-s8-screen-components-money-revenue-display https://www.theverge.com/circuitbreaker/2017/10/2/16404430/s... As an OEM, Samsung has a much more vulnerable moat. What happens when Apple starts to make those components on their own? They already started doing it with processors. What about memory? They buy a ton of memory from Samsung. Reason #3: reality distortion field :)
- tooltalk 8y ago#1, so you agree that it is undervalued? #2, Samsung's business is diversified, not vulnerable. During the DRAM glut years ago, the mobile division's higher profit helped cushion their chip division's lower profit. Now, it's the other way around. Also, unlike Apple's reliance on a single product line, their mobile sales come from many different models, greater than the sales of Apple's in aggregate, but, as individual models, lower than that of Apple iPhone. CNN's comparison likewise is nonsensical. Apple accounts for about ~3 or 4% of Samsung's overall sales last I checked. Apple has significantly cut their reliance on Samsung, especially after the legal battle started in early 2012's, and stopped using Samsung's parts before -- for instance, the earlier iPhone Ax chips were designed and manufactured by Samsung in Texas, USA, but now Apple designs them in-house (after PA-semi and Intrinsity acquisition in 2008 and 2010) and outsources manufacturing to Taiwan/China. That was about 6 years ago and Samsung is still laughing their way to the bank with about $50B in profit last year. #3, I've too noticed that a lot of Apple fanbois are out of touch with the reality at times (is that what you call reality distortion field?). Congrat Apple for achieving such huge milestone and I love my MBP which is 6 years old and still going strong, but surely, no sane mind would believe that Samsung would be out of business (or vulnerable) without Apple.
- calvinbhai 8y agoNot yet https://twitter.com/ampressman/status/1025033219803103232 https://twitter.com/ampressman/status/1025033219803103232 $AAPL needs to be $207.0425 to be $1T company
- gbear605 8y agoThis one is actually correct. It tapped the $207.05 value briefly - see "Today's High" at https://www.nasdaq.com/symbol/aapl https://www.nasdaq.com/symbol/aapl. That tweet is from a previous time earlier today, just after the markets opened.
- beagledude 8y agoremember the guy who gave up his Apple founding stock?
- ancorevard 8y agoThe most impressive part of Apple getting to a $1T valuation is that they did it with a P/E ratio of about 20. I would like to see Amazon attempt that.
- api 8y ago... on design and user experience. Take note.
- craftyguy 8y ago> The company hit a $1tn market capitalisation 42 years after it was founded and 117 years after US Steel became the first company to be valued at $1bn in 1901. Is that adjusted for inflation?
- IloveHN84 8y agoWithout paying taxes, or a very small percentage, it's a fake achievement.
- mikestew 8y agoAre you suggesting that AAPL gets tax breaks that, say, Exxon doesn't?
- deleted 8y ago[deleted]
- tzs 8y agoTheir worldwide effective tax rate is around 25%. You consider that small? https://www.investopedia.com/articles/insights/071816/how-do-apples-taxes-compare-other-tech-giants-aapl.asp https://www.investopedia.com/articles/insights/071816/how-do... https://www.apple.com/newsroom/2017/11/the-facts-about-apple-tax-payments/ https://www.apple.com/newsroom/2017/11/the-facts-about-apple...
- anon12341234 8y agoThe paid an effective tax rate of 25% over the last 9 months. Also, I fail to see how it would diminish the achievement even if they weren't paying taxes. $1 trillion is extraordinarily valuable. There is zero chance you could create a company that big even if all your taxes were waived.
- leptoniscool 8y agoMarket cap is number of shares times share price. Is this equivalent to total amount of money that went into AAPL? Did investors put in 1 trillion dollars?
- filleokus 8y agoI don't think so. All of the money put into to AAPL (via the public stock market) is all the stocks issued via public offerings * the price of the offering, no? After that they have just been traded without Apple seeing any of that money. Stocks given as compensation also contribute in some way, if we expand on "money" as to include forgone income by the employees.
- jjmorrison 8y agoNo - imagine if you had bought 100% of Apple shares for $1 at incorporation, and then sold 1 share for $207. That would make the market cap $1T and the total investment would be only $208. It's more that the investments into Apple + the amount of money made by shareholders equals $1T.
- Isamu 8y agoI dislike market cap as a measure of a company, as clearly a company can be wildly overvalued or undervalued. It is a not as if the "wisdom of crowds" has calculated the true value of a company. During some of the pre-crash days early in the century, publications would trot out companies ranked by market cap, as if that really meant something. All I remember is various of these companies going under in the crash, despite their pre-crash valuation. Revenue is a big deal. And profit too, although Amazon has shown you can keep that close to zero by reinvesting in growth, and that can work too.
- coryfklein 8y agoHow much is my desk worth on the market? However much somebody is willing to pay for it. As the article states, Apple's "value" as a company comes from, in part, the fact that it's a good investment. Some may argue that "the fundamentals" of the balance sheets and whatnot doesn't justify a $1T valuation, but they would be missing the intangible parts of the business which cause it to be worth exactly that much.
- Isamu 8y agoI'm not saying Apple isn't worth a $1T market cap. I'm just saying you wouldn't use market cap to calculate if a company were a sound long-term investment. You'd look at the fundamentals, then make a determination of what you think the long-term value of the business is, then you could look at the current market cap and determine if it is under- or overvalued. Breathless reporting on the market cap of companies is sloppy, I think. The market cap kinda floats around, and worst case may be completely unrelated to the true long term value of a company. Warren Buffet for some time said that he thought Apple was undervalued. I have no idea what he currently thinks, but it is probably still a reasonable value.
- Allvitende 8y ago>Warren Buffet for some time said that he thought Apple was undervalued. I have no idea what he currently thinks, but it is probably still a reasonable value. He currently owns ~5% of the company.
- bcks 8y agoWho's "beleaguered" now?
- haaen 8y agoPaul Graham in 2015: It would have been a good deal for Apple's board to give Steve 95% of the company. Market cap when he came back: 1.73b. 5% now: 33b. https://twitter.com/paulg/status/674760647767285761 https://twitter.com/paulg/status/674760647767285761 Today, 5% of the company is 50 bilion. Jobs became de facto chief after then-CEO Gil Amelio was ousted in July 1997 (wiki). So that would make an annualized AAPL gain of 17.3 percent, excluding dividends. Even more impressive.
- almost_usual 8y ago"For comparison, the same $10,000 invested in an Standard & Poor’s 500-stock index fund would now be worth $2 million." That doesn't seem too bad considering the risk involved investing in a single stock.
- coryfklein 8y agoThe number I want to know: How would that $10,000 in S&P 500 fare if AAPL was removed from the index for the duration of the calculations. Probably not significantly less, but I'd be curious anyway.
- ksec 8y agoJust to give some context, the first publicly traded company to hit $1T USD market cap was Petrol China, but that was only in HK, in mainland china, its stock were never valued more than $500B. And it has only 5% of stock in HK open market. Compare to AAPL today. Apple still has a ridiculously low P/E of ~17. Which is how everyone values a hardware company. And has stayed within this P/E range since the death of Steve Jobs. Apple hasn't been selling more iPhone than the last super cycle aka iPhone 6, which is when the plus version was first introduced. But Apple's iPhone ASP has been up $100+, and Apple has been buying back LOTS of share, which is one of the main reason pushing its stock price upwards. A lot of analyst likes to focus on the flat unit sales, and the higher ASP. In reality it is the user base growth that is much more important. Tim Cook mentioned a double digit percentage growth in iPhone. That puts Apple with close to 800M active iPhone users. Roughly 70M+ of iPhone users coming are either new to smartphone or switching from Android. So while Apple's iPhone sales has been flat for a few years, its iPhone user base has matched from 600M to 800M. Given the moat, or the stickiness of Apple ecosystem, users are likely going to buy another iPhone, staying within the ecosystem than going to Android. The Mac are also adding lots of new users, 60% of Mac buyer are new to Apple. This continuous trend means Apple is adding 10M new Mac users YoY. The last reported figure there were roughly 150M active Mac users. If we look at the sales figures and Active Mac users over time, it is clear the average Mac lifecycle is now on 4 - 5 years before upgrade. The iPad has roughly 300M, may be now closer to 400M iPad users. Again while the sales hasn't grown, its user base is growing. Both Horace Dediu and Benedict Evans are expecting 1.5 billion Active devices by either late 2018 or mid 2019. As impossible it may seems, Apple is STILL growing its user base. And there are few more things to fuel future growth. The rumoured of slightly cheaper iPhone and Mac. We should have a sub $700 6.1" LCD iPhone coming this September. Along with a better sub $1000 entry level MacBook. And I believe the best iPad has yet to come, still with lots of potentials. Yes, I hate the TouchBar, Yes I absolutely hate the new bloody keyboard they put on MacBook. And I don't like FaceID much, still prefer under screen finger print. But all these aside, Apple is still doing extremely well, and its bigger picture is good with no immediate risk at its current valuation. Cant say the same for Microsoft, Google, or Amazon. And they have just finish moving into its new Spaceship. There are lots of mental preparation and inefficiency involved when moving to a whole campus. I hope they are now settle and up their productivity. To sum it up, with a P/E less then 20, and the most Net Cash ( ~$130B ) any company has in the world, they are truly worth their $1T Market Cap. Congrats AAPL. P.S - Steve probably would have sent another note to all employees about Dell. :P
- donohoe 8y agoPetroChina was the first for a brief period back in 2007. Apple is the first trillion-dollar company in the United States, though. https://www.theguardian.com/business/2007/nov/06/china https://www.theguardian.com/business/2007/nov/06/china
- _pferreir_ 8y agoIs this supposed to be good news? I see lots of excitement in this thread, but isn't having a single company worth so much money a sign that we are, as a society, failing to create an economy that is truly competitive and fair? We've already got banks that are too big to fail, soon we might have private companies that are humongous to the point of having the same status.
- coryfklein 8y agoTurning that argument around, in a fair and competitive market would it be impossible for a company to grow to a $1T valuation? Do you think the majority of Apple's $1T valuation is attributable to abuse of government regulation or patents?
- petra 8y agoWe know that networked technology businesses are mono/duopolistic by nature. So even if there are 10 amazing competitors, only 2 will survive, and they will be very protected from future competition. This seems unfair. And yes, that's a big reason behind why Apple is a $1T company.
- _pferreir_ 8y ago> in a fair and competitive market would it be impossible for a company to grow to a $1T valuation? It depends on your definition of "fair". In my view, such a market would be regulated as to avoid that companies become too big to the point of turning into black holes that suck everything around them. Money attracts top talent and allows companies to buy out possible competitors. That in turn generates more money.
- coryfklein 8y agoPlease explain in what way Apple is "a black hole that sucks everything around it".
- _pferreir_ 8y ago
- sungju1203 8y agoSamsung is making much more Operating Income than AAPL. Why their market cap is so low?
- TuringNYC 8y agoMarket cap is based on a half-dozen factors, but primarily a factor of - assets (e.g., cash on hand and other things that can be converted to cash), -Operating Income, and - growth -- meaning how quickly the annual operating income can grow (my guess is Samsung's growth is lower than Apple's)
- rainbowmverse 8y agoApple is worth $1 trillion in the same way an asteroid hurtling toward Earth contains $1 trillion in precious metals. Tim Cook has yet to prove he can do more than maximize profits while someone somewhere is working on the thing that'll undermine the source of Apple's value while they're not looking. edit: generalized away from a specific example because it distracted from the point.
- alexc05 8y agoI'm pretty much a microsoft fanboy but - We had a batch of surface devices at the office and they all had massive battery issues. Like that scary thing where it starts to expand and bend the metal. I think we had to mail it back to the manufacturer in a specially designed hard-case. With quality like that - I'm not sure they're being undermined that badly yet. I think MS are doing other great stuff but surface laptop/tablets are probably not it.
- nv-vn 8y agoThis is true for any company though. The value of a company has little to do with their current assets or current cash flow. At the end of the day, owning stocks is still betting on a company's future.
- tensecondflash 8y agoI like to think that between AAPL dividends and Apple hardware resale value (not even counting the value of the stock I’m holding on to) my spending on iPhones and MacBooks and Apple Watches has all been free. Also, I sometimes I buy put options before a big product reveal in advance of the frequent stock price drop when all the analysts say “Is that what all the hype was about? That’ll never sell!”. Of course the stock prices pops back up again after Apple can’t keep up with demand.
- Bromskloss 8y agoPsst! That's an arbitrary number.
- snowwrestler 8y agoReminds me of the email Steve Jobs sent after Apple's market cap passed Dell: > Team, it turned out that Michael Dell wasn't perfect at predicting the future. Based on today's stock market close, Apple is worth more than Dell. Stocks go up and down, and things may be different tomorrow, but I thought it was worth a moment of reflection today. Steve. https://www.nytimes.com/2006/01/16/technology/michael-dell-should-eat-his-words-apple-chief-suggests.html https://www.nytimes.com/2006/01/16/technology/michael-dell-s... That market cap was $72.13 billion in 2006, by the way. What an amazing run Apple has made.
- nojvek 8y agoI have to say this is an impressive achievement for Apple. Good on them. Although I am sad that an insane amount of wealth is being accrued by the few. The top 6 US companies (all of them tech) are worth more than 5 trillion. That's almost 30% of US GDP. In the last few years there's been an unprecedented rise in wealth yet as both a nation, and a part of a global civilization, we are moving back in some aspects. Even locally, housing is a shit show in the valley and trillion dollar valuations makes it worse for the service class. Extreme poverty in US is on the rise, tons of people are dying of preventable health conditions. Healthcare and education are getting more expensive. Global warming and pollution aren't really turning back. I guess the only mega billionaire I respect is Bill Gates because he's truly putting his money where it matters. Funding all sorts of moon shots like clean nuclear energy, wiping malaria e.t.c I'm not saying its Apple's job to fix it. It really isn't anyone's job to fix the big problems. BUT with the insane amount of cash the big tech cos have, that's hellova resources that could be invested towards bringing the entire human civilization forward to a peaceful, clean, educated and a healthy planet where everyone has the basics and we're not dying because of very preventable issues.
- harias 8y agoThey pay taxes, shouldn't government take care of these issues? Isn't that what governments are for?
- deathanatos 8y agoAlphabet has two stock symbols (GOOG & GOOGL); they have a combined market cap of ~$1.6T. Does this not count?
- gizmodo59 8y agoI think the stock quotes represent the same entity. So it wont be ~850B + ~850B.
- deathanatos 8y agoI guess I just assumed the stock data would all be per-ticker-symbol, that is, market cap on a given symbol would simply be the number of shares on that symbol times the price. But Google itself does report identical market caps, now that I look closer, and that seems unlikely.
- sidcool 8y agoIt is an achievement in almost all facets of success. It is a perfect story of the great American dream. Most products throughout their history have been world class. Congratulations Apple and good luck for the future.