What Does Apple’s $3 Trillion Valuation Mean?

This article is part of the On Tech Newsletter. Here is a collection Past columns,

$ 3,000,000,000,000.

The total value of Apple’s stock on Monday was (in short). It was valued at $ 2.93 trillion as of Wednesday morning – still a Bonkers number that no company has reached before.

Milestone is a useful moment to discover the identity of Apple and the rest of America’s technology titans. Big tech companies are smarter in making products and even smarter in making money. That’s one of the reasons Apple is so valuable.

What is Apple’s superpower? With clever changes and desirable new products, it has extended the lifespan of its iPhone empire while it may have shrunk. What Apple’s weakness should be – its dependence on the iPhone, at a time when smartphones no longer sell like hot cakes – is instead a source of power.

Knowing that as Google and Facebook are rich in selling socks and hotel accommodation ads, understanding the nuts and bolts behind Apple’s power helps obscure the technology titans who have captured both our awe and ridicule.

In the spirit of Tuesday’s newsletter about the misunderstanding of technology, I will admit that I was wrong about Apple. Six years ago, I wrote a column for Bloomberg Opinion – the first of its kind – to say that Apple was hitting the wall.

Since then, Apple’s sales have grown to more than 132 billion, or Tesla’s sales have nearly tripled since 2015. Apple’s profits are unrealistic, and we’re probably paying too much for their $ 19 cleaning rags.

I still think I’m right about Apple, but I’m not right yet. (You could describe this as wrong. I won’t argue.) The facts remain: the company’s flagship product, the smartphone, has become commonplace with wow, and people don’t buy new as often as before.

In 2015, about 1.4 billion new smartphones were sold worldwide. In 2021, research firm IDC estimates total sales at about 1. 1.4 billion. The iPhone’s share – one in seven – isn’t much bigger either. These sales are exceptions to the flatline trend, with new iPhones being sold last year.

But for the most part, smartphones are now the same: a wonderful and essential product that people don’t buy often, such as refrigerators, cars and TV sets. In theory, buying less of our phones should be bad for Apple. Instead, Apple has done very well because it is extremely smart in making money and has persuaded consumers to buy what it sells.

Apple has found ways to sell many more iPhones than ever before, including the ultra-expensive iPhone. It has mastered less admirable details like self-designed computer chips and is forcing iPhone buyers to pay more for add-ons like extra space to put photos. And the company keeps coming up with new ways to make money from content that makes iPhones more useful, including dating apps, AirPods headphones and subscriptions to computerized watches.

This Apple is not going away from its identity as an iPhone company. It’s more of a tilt in its iPhone reliance. I would say it would be hard for Apple to keep doing this, but smartphone sales have been very good for six years and Apple is doing well.

None of that fully explains Apple’s $ 3 trillion march. Honestly, money doesn’t make sense right now. And big tech companies generally churn out the ever-increasing profits that stock buyers are willing to pay.

There is also excitement about Apple launching its first products in the face computer and driverless car that could follow the lead of other companies like the iPhone and make Apple even richer.

Apple’s Struggle with Smart Software – Have you recently booed Siri for being ignorant? – Suggest that Metawars and Artificial Intelligence continue to win for the company in the future is not a cake walk. However, that is not a prediction. I finished doing Apple’s predictions.

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