In case you missed it, last week, Apple made some big news. We’re talking bigger news than announcing a new iPhone or Mac computer. In fact, the 42-year-old company that began in a Northern California garage became the first U.S. company to hit $1 trillion in value on the stock market. We’re not talking billions here – plenty of companies have already achieved that on the stock market. We’re talking trillions. Let that sink in. Trillions.
The real scary part? It’s not done growing.
Apple: A Brief History
Though various films and books have been written about Apple’s success and the man behind the company, Steve Jobs, the company was actually founded by Jobs, Steve Wozniak and Ronald Wayne back in 1976. The goal? To develop the personal computer.
After developing this computer, the Apple II, and seeing it succeed, the company went public in 1980, expanded its staff, then nearly crashed and burned as Wozniak left the company and Jobs resigned in the mid-80s. Left for dead in the early 90s, Apple brought back Jobs, who then began a reclamation project to turn the company into the tech giant that it is today. He did it by opening retail stores, making strategic acquisitions and rebranding Apple to be a consumer electronics company and not just a computer company. The iPhone and iPad followed, setting the bar for smartphones and tablet devices. Jobs died in 2011 from pancreatic cancer, but the company he founded and then resurrected continued to move forward on his ideals. Today, it’s a trillion dollar company.
Where Does Apple Go Next?
Like we hinted at earlier in this piece, Apple is likely not going to stop at $1 trillion worth of value. Many investing experts think Apple is poised for even more growth, and they point to three main aspects that are likely to fuel this growth: the iPhone, Apple services and Apple accessories. Let’s take a closer look at each:
iPhone: It’s no secret that iPhone sales overall have plateaued. But that doesn’t mean that they’re still not an incredibly profitable line of business. Though iPhone development has run into some problems in the past, the company still keeps cranking out more advanced smartphones year after year. And while they’re better versions of predecessor models, they also come with a higher price tag. And they’re always in demand. That’s a good recipe for success.
Services: When was the last time you visited the App Store? Maybe you subscribe to AppleCare or the fairly new Apple Music service? This is a growing division of Apple’s profits, which did about $10 billion in revenue last quarter – nearly a 30 percent increase from the same quarter in 2017. That’s significant, and it’s not even taking into consideration the fact that Apple is developing its own TV library. It also recently bought Texture, a magazine subscription service. Bottom line: Apple’s services are booming, and this department isn’t showing any signs of slowing down.
Accessories: Though it didn’t earn as much revenue as Apple’s services division, the company’s accessories division is another wing that’s poised for future growth. It also did about 30 percent more in revenue last quarter than it did in the same quarter one year ago, and it’s fueled by products such as the Apple Watch, Home Pod and AirPods. With the growth in this division, it’s only likely that more products are planned for launch.
One other factor that you have to consider when it comes to Apple and its milestone value, however, might be the most important. And that’s the company’s vast amount of loyal customers. Any time a new iPhone or iPad goes on sale, there are lines around the block to purchase them. Consumers upgrade an old iPhone to a newer iPhone. They think of Apple as a brand they trust, they’re loyalists and they’re very forgiving of any missteps the company took, as they know that Apple will make them right.
Apple is successful largely because it is so beloved. And after last week, if you own any Apple stock, you probably love the company a whole lot more. A trillion dollars might be just the start.
Regards,
Ethan Warrick
Editor
Wealth Authority
