7 ms·

Apple Is Now More Than Double the Size of Exxon–And Everyone Else

45 points by Nowyouknow 12y ago

hellbanner 12y ago
Can someone explain HN's front page algorithm? This is on the front page with 0 comments & 4 points.
- deleted 12y ago
  [deleted]
- olalonde 12y ago
  https://news.ycombinator.com/item?id=1781013 https://news.ycombinator.com/item?id=1781013 although the algorithm might have changed since then. Roughly, a recent post with few points can rank higher than an old one with many points.
  - larrys 12y ago
    For example I wonder if that algorithm (which I don't understand) takes into account (or has changed to take into account) the source link of the story (in this case wsj.com). Either positive or negative. (Maybe it says that already?)
    - bri3d 12y ago
      HN has domain penalties as well as keyword penalties. Here's dang talking about the NSA and Snowden keyword penalties yesterday: https://news.ycombinator.com/item?id=9097596 https://news.ycombinator.com/item?id=9097596
josefresco 12y ago
In this case, size = market cap. Just thought it would be helpful to clarify which metric is being discussed.
- greggman 12y ago
  Yea, I'd probably consider size by employees and they aren't even in the top 100 there.
  - taylorwc 12y ago
    Which is ironic because Apple's relatively small amount of employees enables their profitability, which in turn enables their market cap.
  - jhall1468 12y ago
    Size by employees misleadingly favors retail outlets and government; just like market cap unfairly favors companies with inflated stock prices. Revenue favors companies with enormous line-item purchases (like Oil companies) and profit ratios may as well say "list of largest tech companies". At the end of the day there's no one metric that can tell you the "size" of a company, because the term is too broad.
  - pbreit 12y ago
    Size by employees is a terrible metric. Market cap isn't perfect but it is the company's actual value after all. Revenue and profit are more imperfect, IMO.
    - jdmichal 12y ago
      > Market cap isn't perfect but it is the company's actual value after all. It's not the company's actual value, but rather the company's actual valuation. Related, but very different, concepts.
      - pbreit 12y ago
        I'm not sure they're very different, if at all. I guess a public valuation is a bit under what you'd actually need to pay to acquire it outright.
        12y ago
tinkerrr 12y ago
> is a 30% stock jump from becoming the first trillion-dollar company This is incorrect. The reason is share buybacks, which Apple has been aggressive with. Remember, when the price was $100 last (split adjusted), its market capitalization was $700 billion. Today, it's price is $130, but the market capitalization is not $900 billion, but only $765 billion. This is because the number of shares outstanding has gone down significantly. In this scenario, the price and market capitalization will not increase by the same percentage. In fact, it is possible for Apple to have a very good price return with no increase in market capitalization at all (consider it generates a lot of free cash flow to buy back stock).
- pcurve 12y ago
  you are technically correct... yes. Apple can also reverse-split tomorrow 10 to 1, and no impact market cap, and you'd also be technically correct.
  - tinkerrr 12y ago
    Prices are always split adjusted, so that is meaningless. My point is, price and market cap are not related that way.
- coralreef 12y ago
  Market cap is calculated by outstanding shares * share price. A company buying back its shares shouldn't affect the outstanding shares figure, because it already includes it. However now that there are less publicly available shares available on the market, the share price should go up, as long as there is demand. By how much, I don't know, perhaps it ends up making Apple more valuable.
  - tinkerrr 12y ago
    When a company buys back shares, the number of outstanding shares decreases. That's the whole reason for buying back shares. See http://www.investopedia.com/articles/investing/112013/impact-share-repurchases.asp http://www.investopedia.com/articles/investing/112013/impact... for a basic introduction to share buybacks.
hahainternet 12y ago
Would anyone like to try and justify this as being a good thing? I don't mind some of Apple's business practices but they have now reached the stage where they cannot be competed against. They own or completely control their entire supply chain and can undercut every competitor as well as invest 10x as much as anyone else to beat the competitors. What a capitalist disaster.
- jdswain 12y ago
  We used to say that about Microsoft.
  - deleted 12y ago
    [deleted]
  - mikeash 12y ago
    And we were right. Microsoft's domination of the industry severely harmed it, and eventually was only broken because the industry shifted to a completely different sector. Any domination will eventually come to an end, but it can still do bad things in the meantime.
- jakobegger 12y ago
  > They own or completely control their entire supply chain and can undercut every competitor as well as invest 10x as much as anyone else to beat the competitors. Huh? Apple has huge margins, and they don't undercut their competitors. Lots of companies make products that are a lot cheaper than Apple's. As for investing, doesn't Apple actually spend less money on R&D than Google or Microsoft?
- glhaynes 12y ago
  Seems a bit hyperbolic. Anti-trust laws are still in place, but I don't see anyone seriously arguing that Apple engages in widespread anti-competitive behavior, much less calling for a legal remedy. Apple certainly is in a place that they could illegally crush competitors if they were so inclined, but the fact that they're not doing so seems to make the natural read of the situation that they've been hugely rewarded for making products that customers can't wait to spend their money on. Hardly a disaster.
Zirro 12y ago
And yet there is room to grow. When Microsoft peaked, they had almost achieved a monopoly-sized market share. Apple on the other hand has managed to grow this large despite their most successful product having a minority market share. It is both impressive and just a little bit scary.
- jhall1468 12y ago
  Because MS decided virtual growth was the way forward (well... they decided it by releases shitty services and products horizontally) and Apple decided to focus almost entirely on horizontal multi-product approach to growth. The latter will always win long term.
- srunni 12y ago
  Here's a great post on Apple's New Market: http://stratechery.com/2015/apples-new-market/ http://stratechery.com/2015/apples-new-market/
- justin66 12y ago
  I read your comment as implying that Apple's potential to swallow the world by increasing in size is scary. The other way of looking at it, if you're an Apple investor: Apple's lack of a "moat" is scary.
  - deleted 12y ago
    [deleted]
PinnBrain 12y ago
So how does Apple navigate the Singularity? Google has more projects directed at it, some explicitly like Calico. Perhaps I'll walk into the Google uploader and drop off my Apple watch and phone.
- minikites 12y ago
  Isn't the singularity definitionally impossible to prepare for?
  - Retra 12y ago
    Nothing is true by definition.
    - minikites 12y ago
      Yes, there are in fact many things that are true through a pre-defined definition.
- serve_yay 12y ago
  Probably they navigate it by making products people pay large amounts of money for, while others wait for a thing some guy wrote in a book was gonna happen one day.
- modfodder 12y ago
  Apple's Singularity uploader will have a more user friendly interface and "it will just work". Although you will be limited on what compression algorithm you can use (Apple will only support Apple lossless and compressed codecs) and limited in your customization options (can't change your voice module, gender identifier, username, or global age specification).
  - PinnBrain 12y ago
    I find the idea of lossless versus lossy uploading of sentience amusing.
serve_yay 12y ago
No longer "beleaguered", but still doomed. :)
ChuckMcM 12y ago
And it is useful to note that the previous company in this position was also a "tech" company (IBM). The point being that "big tech company" is like "big algae bloom", at some point they run out of oxygen or iron or something and die down to a much smaller size :-)
- thewarrior 12y ago
  Or maybe the Apple Car works out just in time to give us the worlds first private corporation with a multi trillion dollar valuation. ;)
  - cssmoo 12y ago
    And the first class action against... You're driving it wrong!
  - ChuckMcM 12y ago
    I can't really tell if you are being serious, but an interesting tidbit from http://www.thepeoplehistory.com/1984.html http://www.thepeoplehistory.com/1984.html which looks at what happened in 1984 (when IBM was bigger than Exxon) was this: The first Apple Macintosh goes on sale IBM pretty much "owned" the PC market (it was called the IBM PC market for a reason) and yet the first moves by a company that would later eclipse it were already visible. Always interesting to look back and see how that worked out. Fair warning though, so far it hasn't helped my forecasting ability :-)
hacknat 12y ago
> Three decades hence, the most-valuable company is worth more than 10 times that and is a 30% stock jump from becoming the first trillion-dollar company Completely meaningless and sort of untrue, if you're willing to take the 15 seconds it takes to get your butt over to the CPI calculator.

45 points by Nowyouknow 12y ago

hellbanner 12y ago

Can someone explain HN's front page algorithm? This is on the front page with 0 comments & 4 points.

deleted 12y ago
[deleted]
olalonde 12y ago
https://news.ycombinator.com/item?id=1781013 https://news.ycombinator.com/item?id=1781013 although the algorithm might have changed since then. Roughly, a recent post with few points can rank higher than an old one with many points.
- larrys 12y ago
  For example I wonder if that algorithm (which I don't understand) takes into account (or has changed to take into account) the source link of the story (in this case wsj.com). Either positive or negative. (Maybe it says that already?)
  - bri3d 12y ago
    HN has domain penalties as well as keyword penalties. Here's dang talking about the NSA and Snowden keyword penalties yesterday: https://news.ycombinator.com/item?id=9097596 https://news.ycombinator.com/item?id=9097596

josefresco 12y ago

In this case, size = market cap. Just thought it would be helpful to clarify which metric is being discussed.

greggman 12y ago
Yea, I'd probably consider size by employees and they aren't even in the top 100 there.
- taylorwc 12y ago
  Which is ironic because Apple's relatively small amount of employees enables their profitability, which in turn enables their market cap.
- jhall1468 12y ago
  Size by employees misleadingly favors retail outlets and government; just like market cap unfairly favors companies with inflated stock prices. Revenue favors companies with enormous line-item purchases (like Oil companies) and profit ratios may as well say "list of largest tech companies". At the end of the day there's no one metric that can tell you the "size" of a company, because the term is too broad.
- pbreit 12y ago
  Size by employees is a terrible metric. Market cap isn't perfect but it is the company's actual value after all. Revenue and profit are more imperfect, IMO.
  - jdmichal 12y ago
    > Market cap isn't perfect but it is the company's actual value after all. It's not the company's actual value, but rather the company's actual valuation. Related, but very different, concepts.
    - pbreit 12y ago
      I'm not sure they're very different, if at all. I guess a public valuation is a bit under what you'd actually need to pay to acquire it outright.
      - 12y ago

tinkerrr 12y ago

> is a 30% stock jump from becoming the first trillion-dollar company This is incorrect. The reason is share buybacks, which Apple has been aggressive with. Remember, when the price was $100 last (split adjusted), its market capitalization was $700 billion. Today, it's price is $130, but the market capitalization is not $900 billion, but only $765 billion. This is because the number of shares outstanding has gone down significantly. In this scenario, the price and market capitalization will not increase by the same percentage. In fact, it is possible for Apple to have a very good price return with no increase in market capitalization at all (consider it generates a lot of free cash flow to buy back stock).

pcurve 12y ago
you are technically correct... yes. Apple can also reverse-split tomorrow 10 to 1, and no impact market cap, and you'd also be technically correct.
- tinkerrr 12y ago
  Prices are always split adjusted, so that is meaningless. My point is, price and market cap are not related that way.
coralreef 12y ago
Market cap is calculated by outstanding shares * share price. A company buying back its shares shouldn't affect the outstanding shares figure, because it already includes it. However now that there are less publicly available shares available on the market, the share price should go up, as long as there is demand. By how much, I don't know, perhaps it ends up making Apple more valuable.
- tinkerrr 12y ago
  When a company buys back shares, the number of outstanding shares decreases. That's the whole reason for buying back shares. See http://www.investopedia.com/articles/investing/112013/impact-share-repurchases.asp http://www.investopedia.com/articles/investing/112013/impact... for a basic introduction to share buybacks.

hahainternet 12y ago

Would anyone like to try and justify this as being a good thing? I don't mind some of Apple's business practices but they have now reached the stage where they cannot be competed against. They own or completely control their entire supply chain and can undercut every competitor as well as invest 10x as much as anyone else to beat the competitors. What a capitalist disaster.

jdswain 12y ago
We used to say that about Microsoft.
- deleted 12y ago
  [deleted]
- mikeash 12y ago
  And we were right. Microsoft's domination of the industry severely harmed it, and eventually was only broken because the industry shifted to a completely different sector. Any domination will eventually come to an end, but it can still do bad things in the meantime.
jakobegger 12y ago
> They own or completely control their entire supply chain and can undercut every competitor as well as invest 10x as much as anyone else to beat the competitors. Huh? Apple has huge margins, and they don't undercut their competitors. Lots of companies make products that are a lot cheaper than Apple's. As for investing, doesn't Apple actually spend less money on R&D than Google or Microsoft?
glhaynes 12y ago
Seems a bit hyperbolic. Anti-trust laws are still in place, but I don't see anyone seriously arguing that Apple engages in widespread anti-competitive behavior, much less calling for a legal remedy. Apple certainly is in a place that they could illegally crush competitors if they were so inclined, but the fact that they're not doing so seems to make the natural read of the situation that they've been hugely rewarded for making products that customers can't wait to spend their money on. Hardly a disaster.

Zirro 12y ago

And yet there is room to grow. When Microsoft peaked, they had almost achieved a monopoly-sized market share. Apple on the other hand has managed to grow this large despite their most successful product having a minority market share. It is both impressive and just a little bit scary.

jhall1468 12y ago
Because MS decided virtual growth was the way forward (well... they decided it by releases shitty services and products horizontally) and Apple decided to focus almost entirely on horizontal multi-product approach to growth. The latter will always win long term.
srunni 12y ago
Here's a great post on Apple's New Market: http://stratechery.com/2015/apples-new-market/ http://stratechery.com/2015/apples-new-market/
justin66 12y ago
I read your comment as implying that Apple's potential to swallow the world by increasing in size is scary. The other way of looking at it, if you're an Apple investor: Apple's lack of a "moat" is scary.
- deleted 12y ago
  [deleted]

PinnBrain 12y ago

So how does Apple navigate the Singularity? Google has more projects directed at it, some explicitly like Calico. Perhaps I'll walk into the Google uploader and drop off my Apple watch and phone.

minikites 12y ago
Isn't the singularity definitionally impossible to prepare for?
- Retra 12y ago
  Nothing is true by definition.
  - minikites 12y ago
    Yes, there are in fact many things that are true through a pre-defined definition.
serve_yay 12y ago
Probably they navigate it by making products people pay large amounts of money for, while others wait for a thing some guy wrote in a book was gonna happen one day.
modfodder 12y ago
Apple's Singularity uploader will have a more user friendly interface and "it will just work". Although you will be limited on what compression algorithm you can use (Apple will only support Apple lossless and compressed codecs) and limited in your customization options (can't change your voice module, gender identifier, username, or global age specification).
- PinnBrain 12y ago
  I find the idea of lossless versus lossy uploading of sentience amusing.

serve_yay 12y ago

No longer "beleaguered", but still doomed. :)

ChuckMcM 12y ago

And it is useful to note that the previous company in this position was also a "tech" company (IBM). The point being that "big tech company" is like "big algae bloom", at some point they run out of oxygen or iron or something and die down to a much smaller size :-)

thewarrior 12y ago
Or maybe the Apple Car works out just in time to give us the worlds first private corporation with a multi trillion dollar valuation. ;)
- cssmoo 12y ago
  And the first class action against... You're driving it wrong!
- ChuckMcM 12y ago
  I can't really tell if you are being serious, but an interesting tidbit from http://www.thepeoplehistory.com/1984.html http://www.thepeoplehistory.com/1984.html which looks at what happened in 1984 (when IBM was bigger than Exxon) was this: The first Apple Macintosh goes on sale IBM pretty much "owned" the PC market (it was called the IBM PC market for a reason) and yet the first moves by a company that would later eclipse it were already visible. Always interesting to look back and see how that worked out. Fair warning though, so far it hasn't helped my forecasting ability :-)

hacknat 12y ago

> Three decades hence, the most-valuable company is worth more than 10 times that and is a 30% stock jump from becoming the first trillion-dollar company Completely meaningless and sort of untrue, if you're willing to take the 15 seconds it takes to get your butt over to the CPI calculator.