The latest figures from Apple appear to show that it has beaten tech giants like Amazon in the race to become the world’s first trillion dollar company.
‘Alarmingly Healthy’ Finances
It has been reported that Apple’s finance chief, Luca Maestri has described Apple’s current financial state as being “alarmingly healthy” after a net profit of a staggering $48.5 billion in was made in 2017, with $285 billion of cash reserves.
Reaching The Trillion Mark
The Trillion dollar valuation was reached thanks to a jump in Apple’s share price last Thursday that was driven by quarterly financial results that were better than Wall Street had expected for the US company that was founded back in 1976.
Record sales of $53.3bn, coupled with $11.5bn profits in 3 months boosted confidence and share value in the tech behemoth to the point where the value of Apple jumped from $935bn to $1tn.
To give some context to this figure, Apple’s $1tn market value is larger than the economies of Turkey and Switzerland, and more than a third the size of the UK economy!
Apple’s 42-year rise to mega-value has been fuelled by some great, highly differentiated, popular, and profitable products such as the Macintosh, the iPod and the iPhone – although the iPhone hasn’t always met sales expectations.
Not PetroChina Then?
No. Contrary to reports that energy company PetroChina hit the magic $1tn valuation back in 2007, it has since been revealed that only 2% of the company was released for public trading, and the resulting value claim is, therefore, widely regarded as being unreliable.
Apple’s CEO, Tim Cook, is reported as expressing his delight at the news of the record-breaking value of the company, and attributed the recent good financial results to strong sales of the iPhone, as well as Services and Wearables.
What Does This Mean For Your Company?
While it’s interesting (and perhaps not unexpected) and inspirational to hear of the incredible financial milestone that Apple has reached, and its true that Apple sometimes has a fan-like following for its innovative, differentiated, and aesthetically pleasing personal gadgets, the wealth of another tech giant is a world away from the daily business reality that many face in the UK, particularly with the uncertainty of Brexit on the horizon.
Some critics may also say that its relatively small tax contributions in some overseas markets e.g. Ireland (where it was ordered to pay €13bn in back taxes) have contributed to its profitability. Also, another blot on Apple’s copy-book in the name of cost-cutting has been the revelations over poor working conditions in Chinese factories where Apple iPhones are manufactured dating back as far as 2009.
Amazon has been seen by many commentators as being locked in battle with Apple to reach the $1tn mark, and will no doubt be disappointed at missing-out on being the first to cross this lucrative finishing line.