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Breaking Historic $500-Billion Mark, Apple Now Worth More Than Poland

March 1, 2012

Jedidiah Becker for RedOrbit

If, like Forrest Gump, you invested heavily in a little fruit company called Apple in the early 80s, you´ve likely been more than a little pleased with the return on those stocks in recent years.

Capping off its juggernaut ascent to the top of the world, the wunderkind of the tech industry reached an historic market capitalization of $500 billion on Wednesday, making Apple the world´s largest company and surpassing first runner-up Exxon Mobil by nearly $100 billion.

Market capitalization — or simply ‘market cap’ — is the total value of all of a publicly traded company´s shares and is calculated by simply multiplying the market value of a single share by the total number of existing shares.

Though the last three years have seen Cupertino’s gurus of chic gadgetry hop from one success to the next, the company’s stocks have been on a particularly meteoric rise since shortly before Christmas, climbing 37 percent from $396 to $544 a share in just over two months.

Riding the wave of a fantastically successful fourth quarter in 2011 — thanks largely to the popularity of the iPhone 4S and the triple-digit rise in iPad sales — the company insists that it still has plenty of room for growth.

Nipping in the bud any idle speculation that they might be even a hair overvalued, Apple recently pointed out to investors that December’s sales figures were actually curtailed by a parts-shortage, not to mention the fact that the iPhone 4S hasn’t even debuted yet on the increasingly technophilic Chinese market yet.

What´s more, in early March Apple is set to launch the newest addition to its tablet family, the much-anticipated iPad 3, which boasts a higher-resolution screen, a quad-core processor and LTE connectivity.

Still, the $500 billion club is not only one of the most difficult benchmarks for any company reach — it´s also one of the slipperiest positions to hold on to. Apple joins the ranks of just five other firms that have attained the half-trillion dollar status, including long-time rival Microsoft Corp., Exxon Mobile, Cisco Inc., Intel Corp. and General Electric Co.— all of which have since watched the fleeting honor slip between their fingers.

Yet Apple seems to be in a position to hold on to its success longer than its predecessors have managed. Despite its gargantuan size, the company remains one of the fastest growing and innovative companies in the tech industry, which, in turn, is (and will likely remain) the most dynamic and rapidly expanding industry long into the foreseeable future.

In January, Apple released figures showing that its total sales had grown by an astonishing 73 percent in 2010 — a particularly astonishing number given that the previous year’s figures were impressive in their own right. Almost en passant, they also just reported having the second most profitable quarter in the history of any US company.

In fact, Apple is now worth more than the respective GDPs of all but 20 of the world´s 190+ countries. And for connoisseurs of the quirky, there´s even a website devoted to lists of “things Apple is worth more than.” Some of them are even more surprising than Poland.

At the risk of oversimplifying the prodigy that is Apple Inc., the company’s formula for growth seems to be the same two-fold strategy that has fueled successful business ventures since time immemorial: a.) know thy consumer, and b.) innovate. As long as they stick this, this writer sees no cause to suspect that they’ll be falling from grace anytime soon.

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Source: Jedidiah Becker for RedOrbit



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