Apple becomes the first $1T company
washingtonpost.com
washingtonpost.com
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).
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.
~30 trillion in residential real estate
~6 trillion in commercial real estate
~30 trillion in pubic company value
Other big buckets I guess would be undeveloped land & private companies.
~100T sounds pretty plausible but I feel like I'm missing a big bucket or two. Not sure what though.
Considering how huge an employer the public sector is in the US, it stands to reason there's a huge value to in the government-as-an-enterprise, even if only considering cash value of assets, such as real estate (including natural resources!) and equipment (including military).
Of course, it might be very tough to calculate, if one includes every public entitity down the the local level and takes into account the debt of each entity.
Mind you, HAL is one letter behind IBM.
https://en.m.wikipedia.org/wiki/Hardware_abstraction#Microso...
Also, if you took a peek at his wikipedia entry, the guy is behind almost every large MSFT OS related initiative in the last few decades: NT, Azure, XBox hypervisor.
https://en.wikipedia.org/wiki/Dave_Cutler#Microsoft_(1988_to...
That doesn't make it a hybrid anymore than having the filesystem in supervisor/kernel space does. Its a hybrid because its designed/layered like a micro-kernel with the individual subsystems appearing to do message passing and using subsystem managers (I/O manager, process manager, object manager, etc) which monitor/etc the message flows. Yet, instead of doing context/privileged switches when it passes messages/IRP's it simply makes abstracted function calls which hand ownership of the message to other subsystems that exist in the kernel's address space. This means you get a most of the abstraction/stability effect of having a micro-kernel without paying the context switch and message copy penalty.
NT has a crazy awesome design, which is somewhat obscured these days, but has yet to really be surpassed by anyone (IMHO).
My supervisor was a die-hard Apple lover, had a Newton, and a fair bit of Apple stock. They could do no wrong in his eyes.
I was a Mac fan (had a Duo 280c, encouraged my folks to purchase 603 clones) but pessimistic about Jobs return. In my view at the time, he had done damage to Apple with the Mac intro and had failed w/ NeXT, even though I was huge fans of the hardware of each. I just didn't think he had the ability to scale a hardware company. I was hoping for BeOS to be the savior.
Nonetheless, it was exciting to see him return as the interim CEO. My supervisor bought a bunch more stock, think it was something like $7/share, and I gave him alot of grief for being foolish. I'm sure he's living in paradise right now, lol.
I thought he was nuts. I was an idiot.
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.
If you had done so, you would have made money, but it was a "bad" bet. It wasn't a company, you had no real information to go off of. No earnings reports, no statements, nothing. It was as blind a bet as you can get. If you were technically knowledgeable in the area I guess you could have "predicated" that it would be used to buy drugs and thus go up in value, but to this day we have highly technically competent people saying "this is fucking stupid, this is overvalued, this is useless." It's a religious debate at this point.
Throwing .1% of your investment portfolio at it, whatever, why not. I do that with derpy shit stocks all the time (looking at you, HMNY, what a fun ride). But I don't think anybody should be salty about "missing the boat" on Bitcoin or other coins. If you wanna be a millionaire, do drop shipping or something. Stream. Flip houses. There's way less risk averse, proven ways to make extra money. Bitcoin just seems "so easy." Get rich quick.
"I wish I had kept my 1,700 BTC @ $0.06 instead of selling them at $0.30, now that they're $8.00!"
https://twitter.com/gregschoen/status/70261648811761665?lang...
Had he held on to his until the very peak, he'd be sitting on $30 million. That's rich.
With BTC, 20x isn't that crazy. I'm talking about 50,000x if you dig up an old enough wallet.
So, absolute best case and assuming they held until the all-time high, roughly a 400x return. There would be another ~$30K in dividends, assuming no dividend reinvestment.
Apple stock was the downpayment on my house.
Thanks, Steve!
If I hadn't ever played WoW, I could have had 540 to spend on Amazon. I probably also wouldn't have been as fat growing up.
If I had not paid for that dumbfuck YOLO trip to Singapore near the end of college, I'd have 2k to throw at Netflix. Or, actually, BP, this was right during the spill.
In other words, Amen man. So now I think today - why do I still go out to eat sushi, instead of tucking it away for another Microsoft buy? Why do I still play Overwatch with my friends here and there instead of spending another hour or two learning something? Why do I still blow assloads of cash on trips once or twice a year?
I guess, what the hell else am I gonna do with my time and money? Keep it till I die? I ride a motorcycle, I could die tomorrow. Actually, my family has a history of heart disease, I could die literally right now lol.
As long as peeps are putting away enough money to survive a crisis, and following the basics of investment principles re: their retirement, they're doing life "right," in my unprofessional opinion.
Sure I didn't buy a lot of stock at 18, but I did have a part time job, which let me go out to eat with my friends and take girls to movies and buy a car to drive us to Ren Fest in (with enough leftover to put together a SICK pirate outfit). I had enough saved to make it easy to buy my books in college. Playing WoW was fun and relaxing, oh well. That YOLO trip to Signapore beat a bit of that cultural close mindedness out of me as I engaged with a bunch of other students from around the world... and it got me a job in Taiwan after college, which was eye opening in ways I never could have imagined. Same with my trips today.
I could have done things differently and have more money right now, but if I had more money right now I guess the only difference is my apartment might be slightly nicer (maybe, I love my apartment), my motorcycle would be slightly faster (maybe, the one I have is kinda perfect for my style), and my clothes would be slightly more expensive (maybe, I'd probably just shop at Uniqlo anyway). I honestly can't think of anything really different about my life right now. Maybe when I retire I'll be like "dude you asshole, if you'd bought 30 more Apple stocks we could be on a boat right now." But then again, I might just die before then, so, shrug.
"X% Americans live paycheck to paycheck"
"Y% American have nothing saved up for retirement"
"Z% Americans don't have $SMALL_AMOUNT for an emergency"
etc etc.
Your post perfectly explains why.
Shitloads of Americans are in a tenuous fiscal situation because our education system has been gutted, our healthcare system is a bad capitalist joke, and thus wealth disparity is shockingly bad here. These used to be things that affected me, but now I'm fortunate enough to be a software engineer and so they don't.
In the meanwhile, I sold off some of it, but a good chunk of it went into the downpayment for my house last year.
I would like to see Amazon attempt that.
He was just quoting what the best market researchers had told him. We were given a LOT of market research papers with in-depth customer surveys where lots of people said, repeatedly, that they would "never pay money for a phone". If you think back to then, phones were "free" with a 2 year contract.
The idea of getting someone who was used to free to switch over to $600 overnight was, by any reasonable accounts, not going to happen. The market researchers did the safe thing and said that the status quo would continue.
Of course they were horribly wrong, but again, in the moment, trusting literally every expert in the field is not the worst position to take.
After all that I learned to be wary of market researchers.
Creating entirely new markets takes vision.
The iPod wasn't revolutionary in any respect, it was a perfectly executed version of what other people were already doing, that had a huge, incredibly well done, marketing push behind it, with even the smallest detail given attention.
Also the white ear buds were genius. Everyone who used them was advertising the product.
But even by 2007, a small percentage of the music people had on iPods were bought through iTunes (less than 10%?) according to Jobs “Thoughts on Music” essay.
You paid $600 for the phone, and then AT&T added the phone subsidy to your bill anyway (and never took it off), so it was just stupendously expensive. Apple lowered the price pretty soon after launch.
It was worth it to have a browser on a phone that wasn't total dogshit.
These days you pay full price stretched over 24 months.
"If you asked Porsche owners what they'd like to improve in the car, they'd all say more leg room, a bigger trunk, and better safety features. Congratulations, you just designed a Volvo."
Or maybe I didn't get the joke.
They had strong YoY gains on Blackberry, and Windows Mobile was set to overtake them eventually. By offering lower cost devices that didn't need to pay an extra per user Blackberry fee to the phone companies, MS was out competing Blackberry on price, while executing on their traditional strategy of having multiple partners flood the market with a variety of devices to fit everyone's needs.
(Where everyone was defined as business users.)
There were groups at MS experimenting with consumer focused designs, and even exploring app store types of business models (though they hadn't yet evolved into what Apple eventually released), people did realize that opportunity was there, but it is hard for successful incumbents to change.
Windows Mobile 7, which never saw the light of day, had just gotten a new kernel, support for higher screen resolution, and was setting out to be a really nice OS to use for business users.
Apple also did something else, it showed that the relationship with carriers could be improved. Microsoft had a very hard time getting past carriers testing requirements, they had a very hard time pushing out patches and updates. Apple showed a way by which carriers could be strong armed into being less customer hostile. The same way Apple showed that the music industry could be dragged into the 21st century.
Apple also dramatically brought down the cost of certain technologies, as they have continued to do. A single manufacturer making a huge order for one part drops the price of that part for everyone else. The OEM model Microsoft used for Windows Mobile, with the myriads of device form factors, was not able to create those types of market efficiencies.
It should have been a red flag back then if market researchers and the people that hired them didn't see this as a convergence of music player + phone markets; it was the point of the keynote! I remember people complaining then that they had to carry both their phone and their iPod around back then.
The smartphone market was also growing then, and devices like Blackberries and Treos were popular and cost $200+ on contract. I had been using a Treo since 2005, and remember the pain of getting apps on it and getting it to play mp3s or use GPS maps. When I saw the keynote, it was clear it was just the next logical step.
It's weird that Windows Mobile didn't see these trends. Perhaps it was a case of underestimating the general market interest, though iPod's success should have been a strong hint that consumers really wanted devices of this type and were willing to pay. iPods were more popular than Windows Mobile devices even then.
Finally there's just the 'sit down and use it' factor that the iPhone had. Once you played with it, it was hard to deny that it was the future. The fluidness and straightforwardness of the UI was so far ahead of everything at the time. Best I can think of as a comparison is sitting in a Tesla Model S after getting out of your Honda - it's not a question of if, but how much.
At $599 the iPhone was definitely expensive for the time, but any reasonable businessperson could conclude from watching literally the entire history of technology that component prices are always on a steady decline, and there were other levers to lower price like carrier contracts. When the iPhone went down to $399 a few months later it's success was a foregone conclusion - after all, that was just a bit more than an iPod but with way more capability.
Reveryone was predicting a “True Video iPod”. An iPod with a widescreen display and all touch.
http://medialoper.com/video-ipod-delay-may-be-a-bad-thing-af...
>Eventually you won’t really need a PC, because all your work will be in a sort of cloud.”
>Suddenly there was an explosion from across the table. “MARC, THAT’S FUCKING BULLSHIT AND YOU KNOW IT!” It was Gates.
To go all in they would have had to kill the PC. In the same way, MS didn't embrace browsers and the Internet for a long time.
No matter how right they may be.
If you want that sort of position, burying your own ideas deep and hide them in shame (use them to impress interns if you must) is the only way to go.
The big part of this is 'continuity'. If something works well, you are tempted to take the next obvious steps in the process. And you should. But after while its not hard to see that you are max'ing out the net utility you could extract out of it. At that point, one must stop, relook and not be afraid to start on something all over again.
Also this is so very true at an individual level as well. Never stop having a life. So many sports people retire between 35 - 40, then their whole life falls apart. This is also true with people have some early career success, I have seen endless examples of people reaching career peak by 30 - 35 and then everything falls apart, may be because they lucked out, but largely because they just can't start again. You have to start with a new purpose when you come to an end of an existing path.
Or time is expensive, and it shows your loss sooner or later.
The most I've ever spent on a phone was $200 for a Motorola Razer after damaging my first one before it was upgrade time.
Now I use a Moto G4 Play, and it's great. Why anyone would spend more than $200 on a phone unless there is a business requirement (ie, it makes you money) is beyond me.
No, the price was built into the contract. The few whack jobs that used a phone that they paid for outright got screwed because the model didn't even consider that.
Are you also surprised that people spend over 50000€/$ on a car? The answer is simple: because it turns out that having nice things is nice.
Windows doubled down on the lower price range thing, which was disastrous for both the branding and the development of windows mobile. Everyone associated it with crap phones and they were stuck developing for last year's devices.
This is very true. Internally the devices we had to use were very nice. The most responsive phones I've ever used were internal test devices.
That and my Motorola Q9H. Amazing device from a different era.
While these weren't mainstream, they did exist and sold well enough to warrant multiple generations of them, and were more expensive than the initial iPhone was at release - so I don't understand the people who said nobody would buy that thing. This combined an expensive music player that sold a ton of units with a phone for more or less what you'd pay for a decent higher-end phone + an iPod in those days. The moment I saw it, I knew I'd buy one. The lack of installable 3rd party apps and a GPS unit was something I immediately identified as an issue, but it was clear what direction they would be going in. I eventually had to wait until the 3G was available in Europe - which also addressed both issues (although the GPS receiver was absolute crap).
Now even Apple offers a payment plan.
Do you think the majority of Apple's $1T valuation is attributable to abuse of government regulation or patents?
This seems unfair.
And yes, that's a big reason behind why Apple is a $1T company.
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.
On the point of a single company being worth so much money, here's a different perspective. One of the many measures of how valuable a company's stock is, is the P/E ratio (price divided by earnings). It just says what multiple of the earnings a buyer of the stock is willing to pay. For Apple, this is now around 20. Take a look at another stock, say Amazon. As of now, it trades at a P/E multiple of 145 and has a market cap just shy of $1 trillion (where Apple is), at $895 billion. If Apple were treated the same as Amazon by the stock market, it would have a market cap of over $7.2 trillion today. If Amazon were treated the same as Apple, its market cap would have to be about $124 billion. Yet, this is where we are.
From the "too big to fail" angle, a simplistic analysis based on the above numbers alone would say that Amazon is a lot more leveraged and riskier than Apple is (the latter also has a huge cash pile of more than a couple of hundred billion dollars).
So the issue here is not that Apple has reached $1 trillion in valuation, because that's well deserved for a company that makes so much money. The issues exist everywhere in what companies do as larger contributions to society and how they're rewarded by the stock market.
> 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-s...
That market cap was $72.13 billion in 2006, by the way. What an amazing run Apple has made.
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.
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.
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.
That doesn't seem too bad considering the risk involved investing in a single stock.
Probably not significantly less, but I'd be curious anyway.
Apple is the first trillion-dollar company in the United States, though.
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.
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
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.
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-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/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 :)
#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.
Actually, it's 50/50 chips produced by TSMC (taiwan semiconductor) and samsung.
About this moat. A fab is not exactly a shoe, it's not something that anyone can just do. The idea that Apple would make their own memory is out there. Apple still uses TSMC or Samsung to make their SoCs, and will have to keep paying those companies for that. Designing the chips is relatively low cost in comparison. Apple cannot easily just make their own. I mean this stuff is advanced technology, it's at least harder than switching from iPhone to Android. People talk a lot about the wall garden and how that prevents switching but this moat is theoretical, it's never been tested. Apple has been good about keeping pace or in front of the competition hardware wise. For a company making good products it deserves the profits, but if it falls behind I don't expect the "moat" to save it. Majority of apps people use are free and are cross-platform. There are only a handful of relevant apps like iMessage or Sketch that are truly apple exclusive. Mac sales have been declining recently and I personally use 5 platforms, linux, mac, windows, ios, android and have no major problems.
#3 :)
If Samsung had their own OS + software technologies that differentiated them from any other electronics manufacturer, and offered their own services on top of that that made billions, and had a large developer base that was all-in on building software on their platform to further differentiate them from others, they might have a stronger business. As it stands, Samsung is just treading water in a zero sum smartphone business.
Also, Samsung is under tight family control through complicated loopholes and cyclic ownership structure so it'll be hard to gain any significant control of the company away from the family, which makes it less appealing to investors I guess?
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.
It's more that the investments into Apple + the amount of money made by shareholders equals $1T.
Android, Maps, Docs, Gmail, Navigation, Analytics are all (mostly) free.
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."
That said it’s irrelevant. Microsoft is happy to keep the competition alive for Google and I bet they are winning some revenue from their DDG deal, so it’s a win win.
And if DDG gets big enough, and it probably is already, they can develop their own web crawler - because in case you don’t know, it’s the crawling part that’s really expensive.
Everything Google does is about advertising and collecting data. Those two things don’t align with my desires.
They align with the needs and wants of billions of people.
Now Apple might be ahead. But its not hard for them to lose all of that. Apple as of now is not useful to the masses in most countries. Google is.
There is a reason why companies like Dell and Microsoft ruled so much in the 90s to the 2005. Once you exhaust Steve Jobs's established product lines, you are just selling expensive cosmetic shining gadgets offering little in extra value compared to Samsung or Dell. At that time is when Google like companies will outshine Apple.
Scary thing for Apple is the new Macbook Pro already shows some of these problems. Steve Jobs is no more, and its already showing.
In fact one big revolutionary product from Google could change everything for Apple. The raw utility of Google search still far exceeds that of iPhone. And that's just one product. Maps, YouTube, Android etc have very large utility to common masses compared to iPhone.
Dell and Microsoft won when the user is not the customer - enterprise sells. Apple brought in the “consumerization of IT”. People have been predicting the death of Apple and the failure of the iPhone for 8 years. They swore Android and especially Samsung was going to take over. Samsung in fact is seeing price pressure and they are struggling - not Apple.
In fact, a lot could change over the coming years.
>Macbook Pro already shows some of these problems It really doesn't. Apple has their fuckups time to time, like Pippin, G4 Cube, Ping, Maps or 'you're holding it wrong' iPhone 4.
Steam charges 30% to be on its store. Same with PlayStation and Microsoft Store.
Seems like it’s the standard distribution fee.
I said it was extortionist, not baseless. Of course they deserve a fee. But it's extortionist in the sense that you have no choice, if you want to sell to worldwide mobile users with deep pockets. Apple also forces as many payments as possible to go through their network, and bans apps that try to take payment outside the store if the app does not provide sufficient justification. In fact, they could just probably charge 50% and developers would keep paying them...
> Steam charges 30% to be on its store
Pretty sure Steve Jobs didn't set the 30% price point by looking at the Steam store, lol. More likely it was the other way around and Steam is 30% because the App Store is 30%...
That would subject each service fee component to competitive quality/demand forces within Apple, e.g. app search, trials/CRM workflow, app distribution. Developers and users can both exert choice on the subset of fees applied to a transaction, so they can provide performance-based feedback to Apple.
Even a monopolist can compete with itself, to improve service and product.
Before that carriers had much higher fees when you sold J2ME apps on feature phones through thier store.
And what exactly is the alternative option for them there? They can either follow the rules in China or completely lose all of their business. That is on China, not Apple.
As an aside: As an engineer, I dislike their walled garden approach; but I love their approach as a consumer. To be frank, most companies have bad taste and poor UX design. Apple doesn't knock it out the park all the time, but their products are consistently good and their design guidelines for iOS apps enforce some of the same quality. So yeah, I'll take a walled garden approach if the garden is beautiful.
Quite often anti-competitive actions are beneficial to customers at the expense of other companies.
As a consumer, I don't give a damn if Apple is "mean" to your business. Learn to compete better.
If these companies are stopping a better product from coming to the market then by all means lets throw antitrust at them; but if your product is just a clone and/or lower quality product that cannot get users, nobody cares.
Sorry, but learn to compete.
There is a major difference between what Microsoft was doing back in 90s and what Apple is doing today.
Not to mention the cut the publishers, wholesellers, and the retail stores use to take when you sold boxed software.
Their cut is the same as Google’s and Steams.
Sorry to rain on your paradise, but is there something old-fashioned about using "Double Irish"[1] arrangement to evade legitimate taxes too?
[1] https://www.irishtimes.com/business/apple-s-cash-mountain-ho...
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
http://blog.pmarca.com/2013/03/26/unshackle-the-middle-class...
- 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)
https://twitter.com/ampressman/status/1025033219803103232
$AAPL needs to be $207.0425 to be $1T company
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).
It's tax that would not have been paid if Apple did not exist.
>and duties go right into the price of the products,
And if the government said "Apple must now pay 50% on every dollar they make" guess what would go right into the price of the products...
>employees pay income tax.
Business owners must pay the federal government 6.2% of every dollar their worker makes until that annual salary reaches $113,700.
Then 1.45% of all pay regardless of how high it goes for medicare.
And unemployment insurance in whatever state.
You can credit Apple with generating those taxes, but they don't get credit for paying that tax on their profits.
>"Apple must now pay 50% on every dollar they make" guess what would go right into the price of the products...
Yes, Apple's prices would go up to compensate, and consumers would be footing the bill.
>Business owners must pay the federal government 6.2% of every dollar their worker makes ...
Business owners must collect that amount, so my pay is reduced by that amount - I am paying that tax, the employer is just the tax man's agent.
You can also credit Apple for the countless iOS developers that have made anywhere from a living to a fortune, that have all paid taxes on their earnings, that have also created likely hundreds of thousands of jobs for everything from customer support to developers inside those iOS development companies, all of which have had income and thus paid taxes, directly as a result of Apple existing.
> When Apple sold iPhones, iPads, and Macs in an EU single-market nation, such as France, the commission said Apple would funnel the profits from France to Ireland and would not pay tax in either country.
Given that most of their tech stack comes from
publicly funded research, the system is clearly broken.
(according to Apple!)
https://www.apple.com/ca/newsroom/2017/11/the-facts-about-ap...
For example, you could get lower taxes by "getting married", even if you're just friends you can get lower tax rates, etc. That's a "loophole". Are we supposed to prove they "really wanted to get married"? Now apply that to potentially all deductables.....
Ha ha ... What about a trillion dollar company paying less than 0.9% tax in countries where tax is minimum 13-19% ? Are we supposed to prove they really tried to evade tax? Or companies not paying any tax at all by siphoning profits through fictive loans in places where they pay little or no tax?
I'm not sure if you get this but the issue is not about someone getting married to get lower taxes(even though that would be illegal just like married someone to get permanent residency is illegal).
https://www.theguardian.com/business/2014/nov/05/-sp-luxembo...
Deductions do have a use, they may encourage them to "go green" or whatever. But yeah there needs to be an actual minimum.
Apple doesn't make money to support governments.
Sure, but governments do support Apple and its employees.
Implying otherwise is dishonest and ridiculous.
Apple doesn't make money to support society and pay for the social infrastructure it uses to help it be successful.
FTFY
Many things are legal. This doesn't mean they shouldn't be illegal. Artificially changing the place where taxes are paid is one of the things that Apple is doing and should be illegal.
Companies like Apple not only use the system but they support it as well. If you want to fix the tax evading think that you will have to fight against Apple along with many other big corp and on top of that with all kind of rich, shady individuals.
Is that adjusted for inflation?
Take note.
https://www.investopedia.com/articles/insights/071816/how-do...
https://www.apple.com/newsroom/2017/11/the-facts-about-apple...
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.)
Source: http://www.visualcapitalist.com/most-valuable-companies-all-...
I'd say the Washington Post is off by maaaaaaaybe an order of magnitude, or more.
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.
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.
See article for numbers: http://www.visualcapitalist.com/most-valuable-companies-all-...
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.
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!
Kidding aside, I agree: I'm also quite dubious of this article's claim on the East India company being worth as much as was computed.
What's the other one?
*edited to include link
Historically, adjusting for inflation there are also some really big ones: https://www.fool.com/investing/general/2012/08/22/a-history-...
My money is on Google, Facebook or Amazon eventually surpassing Apple though
None of those is an investment in something with inherent worth. Hence, I'd not call them an investment, but pure speculation.
A "cryptocurrency" is merely worth what someone else is willing to pay (hence speculative).
What the heck? This is absolutely wrong. The fundamental basis of the value of a share is that it results in gaining a portion of the company's profits. The company makes money and then pays some of that out to shareholders. Even companies that make zero money now have shares valued at least in part on expectations of what money they might make in the future.
Sure, humans are obviously not perfect at anticipating and researching and calculating all this by any means. We are not homo economicus either. There is room for irrationality, for misjudgements, etc. But even with all that shares are just that, shares. The actual ownership of a public company is about shares (yes, there can be different classes in some cases). They represent power and returns, even if it's decentralized.
So a share does in fact have an innate value in terms of the actual cash it can spin off for a shareholder and the input to the company it gives them. Multipliers will vary based on risk and future projections and such, but it's perfectly possible to hold a lot of boring stocks that may not grow much but just print money, consistently, year after year with minimal management. This is not at all the same as cryptocurrencies or any pure asset, where what you ultimately get from it depends purely on what someone else will pay you for it.
Of course, Gambling isn't "investing", and that's all cryptocurrencies are: Gambling assets.
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.
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.
I wonder if we were time travelers in that old timeline.
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.
A bit like saying we could go back three thousand years and corner the market in nifty sea shells
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.
A company's value is the free cash flow available to owners from now to kingdom come discounted back to the present.
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).
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
It is, and not only just on HN. Because Apple has $220B in revenue, not $50.
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.
A competitor could replace most of Apple's current products in 5 years, but where will Apple be in 5 years? They'll be five years ahead.
This always happens with big companies, Nokia, Ericsson, Yahoo, they are replaced by new companies.
5 years ahead for the big company means no progress.
Apple is where it was 5 years ago in terms of innovation. They havent done anything new that was meaningful and only reap the benefits of what jobs invented 15y ago.