Economy

Apple is first public company worth $1 trillion

Apple is first public company worth $1 trillion

An intensifying trade dispute between the United States and China weighed on global stocks and bond yields on Thursday, but a rise in Apple shares took its valuation above a record $1 trillion and helped major USA indexes close in positive territory.

Let's keep in mind that Canada was established as a nation way back in 1867 and Apple has only been around since 1976 when co-founder Steve Jobs started running the company in his garage. Along the way, it has changed how consumers connect with one another and how businesses conduct daily commerce.

Even as investors stare at those 12 zeros in Apple's market value, it's tough to argue that the company deserves an even richer valuation, as long as those margins stay squeezed. Revenues like that are the reason that Apple has managed to grow 50,000% since it listed in 1980, while other firms on the S&P 500 have only grown 2,000% in the same timeframe.

In the two decades since, Apple has risen to become the most valuable company in the world by helping popularize yet another era in computing, the smart phone. When the company's late cofounder Steve Jobs, who was sacked in 1985, returned in 1997, he made a series of moves that put Apple back on the path to success, including launching the iMac computer in 1998, the iPod in 2001, and the iPhone in 2007. You have other companies that don't make any money.

This much is certain: Apple wouldn't be atop the corporate kingdom without Jobs, who died October 2011.

Growth is coming from different sources, too, notably iPhone price increases and sales of ancillary products.

By past year, its sales had grown more than 11-fold to $229 billion - the fourth highest in the S&P 500 - and net income had mushroomed at twice that rate to $48.4 billion, making it the most profitable publicly-listed U.S. company.

The $1 trillion figure made Apple worth more nearly every country in the world except for the 15 richest countries ones, based on data from the CIA World Factbook.

In April, Apple's stock hovered in the $160-$170 range amid worries of lowered demand for iPhones, Apple's flagship product that accounts for over 60 percent of its revenue.

The shares were soaring because of a better than expected set of results posted by Apple for the period between May and June.

It may have been the vision of Steve Jobs that hurtled Apple towards this milestone, but it was the business acumen of Tim Cook that tipped them over. According to Walter Isaacson's 2011 biography, Jobs was "frequently obnoxious, rude, selfish, and nasty to other people", which the "polite to a fault" Sculley disliked. But that peak coincided with a Chinese stock-market bubble, and PetroChina's shares would lose $800 billion in value over the next 10 years. In fact, while the company's iPhone earnings for the quarter grew 20% year-over-year because of higher smartphone ASPs, Apple's services revenue grew 31% year-over-year as the company has been expanding its offerings for some time now.

The achievement seemed unimaginable in 1997 when Apple teetered on the edge of bankruptcy, with its stock trading for less than $1, on a split-adjusted basis., and its market value dropping below $2 billion. Since 1980, IBM, Exxon Mobil, General Electric and Microsoft have also alternated as the largest publicly listed USA company.

United States tech companies have cemented their position in the broader market, now making up the top 5 most valuable enterprises based on share prices. Oh and by the way, Apple is not the first company to hit the trillion dollar mark globally.


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