Interesting piece from the New York Times.
Apple’s market capitalization — the value of all of the shares of its stock — is more than $758 billion, greater than any other company’s. Yet the Wall Street consensus is that Apple is still having a growth spurt. In fact, if Apple’s watches, phones, laptops and other gadgets and services keep generating favorable publicity — and if its quarterly earnings report on Monday is as strong as the market expects it to be — there’s a reasonable chance that Apple’s value will keep swelling. Not far down the road, it might even reach the $1 trillion level that some hedge funds predict.
But even if Apple still has some room to run, there are some early warning signs. After all, the company has already crossed a significant threshold. In February, it grew to twice the size of the next biggest company in the S.&P. 500, a rare feat of financial dominance, and one that hasn’t happened since Ronald Reagan was president.
And the last company to achieve that?
I checked the numbers with Howard Silverblatt, senior index analyst at S.&P. Dow Jones Indices. He found that the last market colossus to tower over its competitors by a two-to-one ratio was IBM, which did it in three successive years: 1983, 1984 and 1985. “That was when PCs were new,” he said, “and just about everyone thought IBM would rule the world.”
Good read. Cue the “Apple is doomed” theme song. Hasn’t anyone written that yet?
Companies that Apple is more than twice as big as continue to thrive in tech. it’s not like the 90s where MSFT took all the profits in the market and left its competitors with none.
Funny, the most cogent points are made in the 3rd-from-last paragraph, and the author doesn’t even realize it.
“IBM thrived for years afterward, but just as Jobs had predicted, it turned out to be vulnerable to disruptive change, as all big companies are.” Yep, and Apple keeps disrupting itself before anyone else can. Apple has been skating to where the puck’s going to be more often than anyone other than Gretzky.
“For decades now, IBM has engaged in a sometimes painful transition, and as it revealed in its quarterly earnings report last week, it is still hurting: Its revenues have declined and it has endured wrenching business shifts.” Good thing Apple got that shit out of its, uh…System [8] back in 1997. When Apple finally does hit a dry patch and goes a few years without a cash cow product, keeping that pile of “cash and cash-equivalents” growing and growing is going to look incredibly foresightfull as it will buy Apple’s way out of a pretty huge hole.
Is Apple going to stay in it’s current position, of course now. It could very well be that the management team that comes after this management team forgets the lessons Steve Jobs taught, but barring an unexpected, and exceptional, situation that won’t happen for a decade or so.
Yep. Funny how some companies can become a huge success without destroying all of their competition.