12 ms·
Apple’s $1T Milestone Reflects Rise of Powerful Megacompanies
- tudorconstantin 8y agoOr is it possible to reflect inflation and the devaluation of money?
- adventured 8y agoInflation is always a factor, however Apple's performance is legitimately extraordinary in size for any age. In 1980 GM was considered a monster with $2.8 billion in profit, number two on the Fortune 500 list that year (behind Exxon Mobil). Apple's profit today rolled back to 1980 would be about $16.x billion. Roughly six times that of GM then, and roughly four times that of Exxon, the high mark. Using the BLS inflation adjustment calculator, GM's profit in 1980 is about $9 billion today. That'll get you ranked roughly #25-30 on the Fortune 500 today. #25 in 1980 was Union Carbide at about $550m in profit, or ~$1.75b in today's dollar. That's good for about #200 today. The corporate profit boom isn't primarily an inflation based phenomenon, it's the epic expansion of the global economy and the way the large S&P 500 type firms have benefited in an outsized manner.
- a008t 8y agoWorth noting that the large S&P 500 firms change over time. It has not really been "big corporations getting bigger / having a profit boom", I think.
- votepaunchy 8y agoShould this comparison also account for the growth of the US population and economy? Inflation-adjusted GDP has tripled since 1980 and one would need to adjust the size of the S&P accordingly to make a fair comparison.
- fauigerzigerk 8y agoYou're right, the $1T valuation is neither surprising, considering inflation, nor record breaking as a share of the S&P 500: https://www.bloomberg.com/news/articles/2018-06-04/apple-s-1-trillion-chase-unprecedented-try-totally-logical https://www.bloomberg.com/news/articles/2018-06-04/apple-s-1... And I think that's why the NYT article quickly moves on from its clickbait headline (they had to put that number up there!) to far more interesting comparisons.
- YokoZar 8y agoOr any other reason why Apple might delay dividend payments. Other companies could have hit a trillion sooner if they hoarded cash like a dragon or only did buybacks.
- scarface74 8y agoApple has been paying dividends since 2012. http://investor.apple.com/dividends.cfm http://investor.apple.com/dividends.cfm
- mkirklions 8y agoThis is why I dont consider Bitcoin a risky investment anymore. I can see the inflation around me. Historically and currently countries have an economic crisis where the government has hyperinflation. Id rather have gold than government money.
- ckastner 8y agoMegacompany sounds intimidating, but I perceive Apple to be quite tame. They mostly just make hardware. It's Facebook, Google and all the others sitting on mounds of personal and extremely detailed data (including geopositioning) that scare me. Edit, to expand on the above: If you could copy Apple's tech, you could (theoretically) make an iPhone-clone. Copying Facebook's or Google's technology won't get you much because to be truly effective, it needs a lot of data. Which is why you can find some of their prime technology on GitHub, I guess (eg: TensorFlow). And they are so far ahead of the pack with regards to collected data, I don't see how they could ever be caught up with.
- cm2187 8y agoThe app ecosystem and unwillingness of users to relearn how to use their phone regularly are strong lock ins. Ask Microsoft! But Apple is making enough user hostiles moves (raising prices, suppressing features, nagging for paid services, etc) that I beliebe in the long term their margin and market share will erode.
- willtim 8y agoApple are engaged in collecting and holding data, they hold personal files, emails, photos, calendars, location data etc. There is a financial incentive for them to make it difficult for people to move away. Apple have also led the trend for 1000+ dollar disposable electronics, with glued and soldered components that cannot be easily repaired or upgraded.
- keymone 8y agothe ultimate way of making it difficult to move away is to make a better product. so far it looks like apple is executing that strategy quite well (judging from the stock price).
- SmellyGeekBoy 8y agoApple's stock price is based on its ability to make money, it has very little to do with the quality of its products.
- ape4 8y agoGigacompany
- kanox 8y agoTeracompany, because trillion
- dougmwne 8y agoIf we take the Russell 3000's market cap (~30T) which contains ~98% of all US stock market cap we find that the average corporation(where corporation is defined as a major entity and not a small business) is worth .01 trillion or 10 billion. That would make Apple a Hectocorp.
- polskibus 8y agoAre we slowly reaching the cyberpunk dystopia?
- Nae3Au5x 8y agoChina skipped straight ahead to post-cyberpunk dystopia
- AnsisMalins 8y agoSo can we call each other chummers now?
- moate 8y agoI mean they just called it a Mega-Corp. Reaching or have reached? NOW HIRING ALL NETRUNNERS!
- buboard 8y agoRise or peak?
- fauigerzigerk 8y agoThat's a good question. The number of iOS devices sold is stagnating. Mac numbers (in units sold) are falling precipitously (-14%). Revenue has grown because they were able to raise prices and because they sold more services. I think the room for price increases is limited. So it's all down to services now. I think there is room for growth given their high income customer base, but it will change their business model in ways that will spark many debates on here.
- maeln 8y agoApple still control its eco-system very tightly. Let's not forget that they also made questionable decisions with the Apple store. They were also had one scandal about location tracking and sharing if I remember correctly (which may have prompted their strong stand on customer privacy nowadays). EDIT: Yes, in 2011: https://www.nytimes.com/2011/04/28/technology/28apple.html https://www.nytimes.com/2011/04/28/technology/28apple.html
- ckastner 8y agoSure, Apple isn't spotless. But their main business model, as far as I can tell, is making money by selling premium hardware. Facebook et al. make money by collecting and selling other people's data.
- pluma 8y agoFacebook et al. make money by harvesting your data and using it so other people can try to sell you stuff. Apple makes money by holding your data hostage to convince you to buy expensive hardware. That said, Apple's business model doesn't require them to violate your privacy -- to derive value, they only need to hold the data you give them, not really do anything with it. Facebook's and Google's business model is only possible with a complete disregard for your privacy rights.
- AmericanChopper 8y agoWhat data of mine is Apple holding hostage? As far as I can remember, I’ve only ever brought Apple hardware because I like it so much.
- cmsj 8y agoYou could maybe make an argument that something like iMessage is a platform lock-in.
- AmericanChopper 8y ago
- puranjay 8y agoApple has stumbled a great deal in the Indian market. If it gets its Indian strategy right, it's looking at billions more in revenue.
- iamgopal 8y agoAbsolutely not. I don't know what it looks like from outside, but India is quite poor, where at max One plus succeeded.
- puranjay 8y agoThey absolutely are. Sales have actually declined, as has their share of the premium smartphone market https://qz.com/india/1328590/apple-struggles-in-india-as-iphone-sales-drop-and-executives-quit/ https://qz.com/india/1328590/apple-struggles-in-india-as-iph...
- the6threplicant 8y agoThey'll need phones with two SIM cards. Every Indian IT person I've met in India always look at me with disdain, but also :), when I tell them I can only have one SIM in my phone.
- agumonkey 8y agoone for friends and one for jobs ?
- sumedh 8y agoMost use one sim as their primary sim while the other sim is the one which has the cheapest data plan. Number portability came to India late so having two sims gave you best of both the worlds and now people are just used to having two sims.
- auggierose 8y agoI always wondered where that two-sim feature request comes from. I really only need one.
- a008t 8y agoThere are some positive aspects to rising global inequality. Massive wealth, concentrated in a few hands, does not really make the rest of us poorer. They are not competing for the same goods and services as we are. It only really hurts the rest of the population if they go on a frivolous consumption spree - building monuments to themselves or otherwise burning resources. What it does potentially enable, however, is grand projects that can push humanity forward as a whole. Elon Musk with SpaceX is maybe one example. But I would imagine the very wealthy would have a big interest in effectively researching longevity, revolutionizing healthcare, faster travel, maybe even building a 'comfortable' space station in a Lagrangian point which would involve also building a Lunar base. Once these advancements are available to the super-rich, it will not be long until they are available to the rest of us - according to history, anyway. I do not have the research, but from anecdotal observations, wealth created by building legitimate businesses tends to be spent more carefully and responsibly than wealth acquired through political connections, natural resources, granted monopolies etc.
- annabellish 8y agoAs nice as that sounds, at what point do we consider it immoral for for-profit megaprojects to come before little things, like ensuring people don't go hungry, have adequate healthcare, or have enough savings that they can weather minor problems? We have commercial megaprojects like SpaceX, but the cost of this is the society around it a) can't afford to run meaningful not-for-profit space projects, and b) can't afford to keep the baseline level of support for its citizens high enough for them to not spend more time worrying about how to allocate their meager resources than they can doing things which actually advance society. Is that a fair tradeoff?
- wongarsu 8y ago>but the cost of this is the society around it a) can't afford to run meaningful not-for-profit space projects How so? SpaceX spends money in the US, meaning they generate taxes which directly increase the government's ability to run more expensive not-for-profit space projects. The problem is that the government decides to spend only 0.5% of its funds on NASA. The same argument goes for all your other points. SpaceX spending money means they employ people (both directly, and indirectly by buying stuff), which should always improve the overall situation for society (even if the jobs were bad, the fact that people choose to take the jobs means that having the job is better than the job not existing). It also means they generate lots of taxes, which improves the government's ability to do all the other stuff you list. Megaproject like SpaceX seem like a good thing for society no matter how you look at it (unless you assume Elon Musk should donate all his money to a better cause, but that seems unreasonable in a capitalistic system). Megacooperations like Apple might be another matter. Apple takes money in the US, uses it for production in China, and keeps the profits stashed in tax havens. You could argue that this activity is harmful.
- pluma 8y agoThe reason Apple is so big is that they were clever enough not to create an anti-competitive monopoly. Ironically the way they did this was by creating a walled garden that doesn't actually allow for any competition. They produce their own hardware, running their own OSes with their own app stores, their own web browsers and their own entertainment platform. Instead Google and Microsoft were struck down repeatedly for trying to create similar lock-ins but on arbitrary hardware or arbitrary OSes. Another deciding factor is that Apple increasingly focuses on a specific segment of the market, becoming a lifestyle brand more than a tech company. This has allowed them to create a perception of ubiquity without actually having to control the majority of the market (internationally, anyway) yet still making loads of money because the segment they focus on is so willing to part with money (not just for $1000 iPhones but also $70 cables and $20 apps). Google and Microsoft needed anti-competitive contracts to gain a majority share of devices (Android smartphones for Google, the IBM-compatible PC desktop for Microsoft) because those devices were running other companies' hardware. Similar strategies are still being used to wall-in the web (with Google's AMP and Facebook's Instant Articles). Apple creates lock-in by brute force: you have an iDevice, so you're using iServices because it's convenient and you'll migrate over all your other tech to iDevices too because the synergy is compelling and there's simply no other option (good luck trying to use iMessage with your Android friends, or consuming iTunes content on your Microsoft tablet). Even with Android and Windows, Google and Microsoft don't have that luxury: you may be using a Google phone but that doesn't mean you're using a Google laptop (simply because ChromeOS is not always feasible), or you may be using a Microsoft laptop but Microsoft phones are simply no longer a thing. Microsoft's answer is similar to part of Apple's strategy: focus on a specific market segment. Their segment of choice is enterprise users, but also developers (a segment which conveniently Apple has lately been neglecting). Google's answer is to lock you in by hoarding all your data and providing value based on being able to harvest all that data. Facebook seems to be copying Google's approach, except they don't even distract themselves with smartphones or laptops and go straight for all your friends and family by owning your communication (both indirect via your Facebook feed and direct via WhatsApp). That said, I believe "privacy violations as a business model" is a consequence of the US startup scene's heavily anti-privacy legal context. It will be interesting to see how these companies adapt as privacy regulations like the GDPR show their teeth and international laws begin to follow. Data ownership and privacy as rights aren't exactly compatible with how these companies need to operate in order to function.
- OliverJones 8y ago"Teracompany?" "Mega" is the SQUARE ROOT of the size of the biggies.
- MrEldritch 8y agoMegacorporations weren't "corporations with sizes measured in megabucks" when the term was coined either. A million dollars when Neuromancer published would still be only two and a half million today - not particularly large.
- codesternews 8y agoI am very glad and happy Apple made to this mark not any other company. Apple makes premium product and sell it. Other companies treat you as a product and sell you and your privacy.
- mark_l_watson 8y ago+1 I agree with you. I want to reward Apple for making beautiful products and making a fairly good effort to respect and look after customers’ privacy. I also like Google’s products like Play Movies, Play Music + advertisement free YouTube, Google Assistant, and GCP. I feel like I am ‘leaking’ too much of my private data with Google Assistant but it is such a good product that not using it is a little painful.
- paulpauper 8y agoEventually Facebook, Google, and Amazon will get there..maybe in a few years or so.
- mkirklions 8y agoThat is, until a bubble bursts. Maybe 1T dollar companies exist, but given the massive infrastructure of auto companies and their valuation being less than 100B, I'm skeptical that Trillion dollar companies are a real thing.
- gbear605 8y agoRoughly a quarter of the valuation is cash, so it's at least that much.
- mkirklions 8y agoSo long HN karma... Proprietary hardware, constantly pissing off developers and customers... Great company /s I dont know why Apple gets a pass for being so anti-competitive. I remember the annoyance of buying music on itunes and being forced to burn it to CD just to play on my mp3 player. Today, its a multi thousand dollar event to publish an app on Apple's store, vs the insignificant cost of publishing on Android and Web. (If anyone has an idea how to reduce the cost of compiling my React Native app and publishing on Apple, I'm all ears, but I'm constantly being told to spend 2k+.)
- deleted 8y ago[deleted]
- skydaddy 8y agoIt's a teracompany, not a megacompamy.
- clarkmoody 8y agoYou skipped right over gigacompany
- crististm 8y ago...and also the effects of monetary inflation
- deleted 8y ago[deleted]
- droopybuns 8y agoNot a new phenomenon. Let's just keep things in perspective, starting with the Dutch East India Trading company. http://www.visualcapitalist.com/most-valuable-companies-all-time/ http://www.visualcapitalist.com/most-valuable-companies-all-... "I don’t measure the world by human simplifications like round numbers" -Woz