It was inevitable that Apple would become the most valuable listed company ever by being the first company to reach the magical $1tn figure.
It is Apple – with is stylish minimalist design and must-have gadgets – that has come to define this mobile internet age we live in and has had a stratospheric share price despite a number of scandals.
Apple dropped the word “computer” from its title years ago, and it now derives two thirds of profits from the iPhone; which turned 10 last year and celebrated it by dropping the single home button that came to epitomise the simplicity of the iPhone interface. It was fitting, then, that the news that pushed Apple’s overall valuation over into 13 figures last Thursday (August 2, 2018) was stronger-than-expected iPhone sales.
For months there has been speculation about whether Apple or Amazon would be the first listed company to break through the $1tn threshold – briefly with Google’s holding company Alphabet seeming to threaten a run.
But it’s appropriate that it is Apple, which is an integral part of the two silicon chip revolutions that got us here: personal computers (especially the Macintosh) and smartphones (the iPhone in 2007).
It’s all the more noteworthy because when Steve Jobs returned in 1997 Apple was nearly financially bankrupt and was bereft of ideas, inspiration or any cool tech. Jobs relaunched the iconic all-in-one Macintosh as the iMac, brought portable music to our pockets through the iPod and iTunes store, while upending Big Music and then made a truly iconic pivot into making mobile phones.
The iPhone, which has sold 1.4bn units, was the first true smartphone – even if the first model couldn‘t forward an SMS, amongst its many faults – and Apple led innovation for at least the first five or six years afterwards.
The then large touchscreen device supersized phones from tiny keypad midgets into mini computers that had this wonderful ability to surf the web. Despite earlier attempts at making the web mobile, it was the iPhone that led that charge. And all the other manufacturers followed, especially when Google released the Android operating system.
We saw cellphones morph from voice-centric devices we held next to our heads into data-centric tablets we held in our hands. The mobile internet started leaving the 2G voice-era behind and now voice is just another packet of data carried over the 4G networks we use for data transfer speeds that were unthinkable a decade ago.
Apple overtook Exxon Mobile as the most valuable listed company in August 2011 and then again on a sustained basis from January 2012 when its market cap reached $414.83bn as its share price hit $446. The following month, Apple shares hit the $500 mark.
Interestingly, Microsoft – the other major firm from the fertile 60s and 70s that led to the rise of Silicon Valley – was the first US company to hit $500bn, which it did in 1999.
The US stock markets are no longer dominated by Big Steel, Big Oil or Wal-mart but by tech firms like Apple, Microsoft, Amazon, Facebook and Google. It’s ongoing confirmation of how digital has become the centre of our lives that these tech behemoths are the most valuable – and dangerously most powerful – firms in the world. It’s noteworthy that Facebook, Apple, Amazon, Netflix and Google – the so-called “Faangs” – have a market value equivalent to 19% of the US’s GDP. Five companies are worth a fifth of the economy that spawned them.
Apple, the great Jobs-led innovation company that has played such a pivotal role in our computer and mobile worlds, deserves the honour of hitting the $1tn valuation first.
This column first appeared in Financial Mail