Apple, the famed technology behemoth has startled the world by demonstrating a profound growth trajectory over decades. Only a few people had faith that one day it will grow to become the first-ever American tech company to achieve the $2 trillion mark. And then it happened: the company achieved the milestone in August this year—surpassing the $1 trillion market capitalisation level from two years ago.
With that, comes the marvellous news that Apple’s share price climbed steadily despite the coronavirus pandemic. Now it is not only reputed for being a Steve Jobs-led company but it has made it to the top of the world since the beginning of the last decade. The driving force behind the company’s success is its innovation of world-class tech products. You name it and they have it. All of its products are known to work effortlessly and the sophisticated integration between them is a novel concept that has captured the tech market since its inception in 1976.
The New York Times reported that the stocks of Apple and a few other tech companies surged during the pandemic—a development in contrast to common knowledge at this time. A fun fact here: It only took 26 weeks for the iPhone maker to cross another $1 trillion mark despite the protracted pandemic which has been weakening the works of companies worldwide. The report also stated the company’s value was less than $1 trillion until mid-March, while Saudi Aramco, the Kingdom of Saudi Arabia’s recognised oil major was the only company to be valued at $2 trillion.
Tim Cook, Apple’s CEO, told the media, “We do not have a zero-sum approach to prosperity. We are focussed on growing the pie, making sure our success isn’t just our success and that everything we make, build or do is geared toward creating opportunities for others.” Now the tech behemoth’s value has surpassed the gross domestic product of many developed countries including Norway, the UAE, Taiwan, Turkey, Switzerland, Mexico, Indonesia, the Netherlands, Italy, Brazil, Canada and Russia, South Korea, Spain, the Kingdom of Saudi Arabia and Australia after hitting the $2 trillion-mark.
It is known that the company has always stood out for its innovation and sophistication in products, advertising and sales. But what is more interesting is its growth trajectory—from developing its first product that created a world benchmark in 1976 followed by the Apple II in 1977 that boosted its revenue until the mid-1980s—to presenting itself as an iconic brand in international markets today. For the uninitiated, Steve Wozniak was the founder of the company that built Apple I and Apple II, while Steve Jobs managed the marketing in its early days. But that is not to say that the company has faced no challenges in the past. In fact. Apple III and Apple Lisa did not perform well, leaving the company in jeopardy for a period of time.
Revisiting the John Sculley period
One of Apple’s profound moments was the launch of the Macintosh in 1984. But IBM stole the thunder when it forayed into the international market, which then led to a slump in Apple’s revenue in the intervening period between Apple II and the Macintosh. Then founder Steve Jobs was replaced by John Sculley as the CEO following the temporary slump in revenue. After exactly 12 years, Steve Jobs was back in action as the interim chief executive of Apple. However, the company struggled between 1997 and 2000 until he was assigned as the permanent CEO. After that period, the international market was flooded with top notch products such as the iPod, iTunes and the iPhone.
Then, the company developed as many innovative products such as laser printers, Macintosh Portable, PowerBooks, the Newton, and much more under the leadership of Mr Sculley. It grew steadily on the back of an increasing demand for its products during the period. That said, the revenue further climbed with a surge in sales. Again, the availability of cheaper Windows-based computers started to dominate a far larger middle market during that period, while the former’s sales seemed to be stalling. Again, the company’s product line started to flourish under the leadership of Sculley.
Steve Jobs’ return to Apple was a decisive moment in tech history
When Steve Jobs replaced Gil Amelio as the CEO, he had a different vision for the company. He wanted something big, really big as he truly believed that customers could not understand the value of a product until they were actually using it. Building on that vision, he rolled out the iMac under a campaign resembling a logo called Think Different. The iMac was different from its preceding products in terms of design and sophistication. The iMac was different from a traditional tower and monitor setup which a PC had during that time. By design, it looked like a racer’s helmet photographed at speed, a colourful blur sweeping back from the screen. The iMac was the most aesthetically pleasing machine which was available on the international market in 1998—and the product was user-friendly and elegant featuring a faster OS system.
How iEcosystem changed the game for Apple
The launch of iMac was just the beginning of Apple’s innovative journey and after that it introduced products such as the iBook, the iPod, the iPhone, the MacBook Air and the iPad, which then changed the game for global tech companies. The launch of the iPod, the iPhone and the iPad revolutionised the world. All these devices are alluring in terms of quality and design. Apple was very different from the rest of the tech companies. Steve Jobs had largely focused on this product’s usability and built those products with the ease of use concept, while ensuring that updates are available on time for all consumers.
All of its products pushed Apple into a new business model, which then led to the launch of a rigid ecosystem of software, hardware and content. The iTunes software did not only allow its users to transfer music from MP3 into iPods but also paved the way for music to be sold individually at a fraction of the whole album’s price. The software which Apple uses in its products is unparalleled. It is believed that the content part of the ecosystem is lucrative for Apple in the short-term and the long-term. When a user switches to Apple from a different brand, they will definitely feel the difference because of the content integration that product offers.
The post-Steve Jobs era—how is it panning out now?
When Tim Cook became the CEO of Apple following Steve Jobs demise in 2011, Apple continued to dominate the international market by continuing the trend with the same level of sophistication and efforts. With that, the company’s share prices also rose steadily. Many global experts have said that Apple without Steve Jobs has turned iterative in its tech releases rather than transformative. The company’s major release after Steve Jobs has been the Apple Watch, then followed the launch of Apple TV, Apple TV+ streaming video-on-demand services and few other gadgets.
Currently, the company is heavily reliant on its iPhone’s production cycle to power its financial success in the absence of a new ground-breaking product. Many experts firmly believe that the company has lost its innovative edge in recent years, despite it continuously producing high-end products with the best-integrated ecosystem ever created. For now, there are no major key differentiators between Apple and tech companies such as Google and Samsung, like it used to be back in the day. Companies like Samsung have in fact taken the lead in some categories in the field of product innovation.
Apple’s trillion dollar valuation is a ‘reminder for investors’
But what is intriguing is that the company despite re-hashing its famed integration of all products with a touch of sophistication touched the market value with $1 trillion in 2018. The sales of iPhone X played a pivotal role in the development as it increased revenue by 20 percent, and the company managed to grow by 17 percent each year with $53.3 billion in revenue. The fact that Apple’s iPhone sales were skyrocketing compared to more than any other products that the company has offered points to the fact that the iPhone is of utmost importance to its brand value. However, that was enough for Apple to make profits in a thriving marketplace.
The company has been the largest global company in terms of market capitalisation over the years. Despite its looming challenges, it is becoming a more powerful brand then ever and there are hopes that it will launch new products in the market. The fact that Apple is becoming a $ 2 trillion company is positive news for global investors as its stock is widely owned by lawyers, teachers and electricians. This demonstrates the scope for investors in the company’s stocks. Its position is stronger than ever, allowing investors of all types to invest and make profits. Kate Warne, a renowned investment strategist, told the media, “Apple’s $1 trillion valuation is a great reminder to investors that companies with innovative ideas combined with world-class products and service can create value for investors over time.”
Entering a new decade: Its legacy continues
A company this big cannot escape from the shadows of controversies and complexities. For example, it has faced a series of allegations in the last few years, when Google imposed a fine of $5 billion over Android Abuse, which sparked a different outlook among users and critics. Apart from that, there have been other problems such as the iPhone Battery controversy and iPhone slow down, anticompetitive practices, Irish tax bill and universal compatibility violation.
As we all know the company’s market capitalisation has touched a record landmark this year. With that, it is clear that Apple is setting up new goals for the future. The revenue from wearables such as Apple Watch has set new records, while the company’s 13 new services also rose to record high amid the outbreak of the novel coronavirus. The contactless payments services such as Apple Pay have also gained popularity this year due to the surge in demand for contactless payments services.
Also, this year saw the company make profound changes to its Mac. Apple is using its own custom-designed chips in the Mac instead of Intel processors. The new processors are believed to be more energy-efficient and they are used in iPhones and iPads. The new chips are expected to enhance Apple’s performance for laptops and provide a longer battery life. Furthermore, Apple has changed the macOS for developers. Now, they can use iOS and iPad OS apps on the Mac without any modifications. The move has paved the way for PC users to effortlessly use Mac-based apps.
The world prepares for new Apple innovations
This year’s Apple’s Worldwide Developers Conference was held virtually due to the outbreak of the Coronavirus pandemic. The event brought together developers and Apple fans from different parts of the world, which then announced a series of new innovations that have pushed the company’s experience in building its platforms and products even further.
The event unveiled a few ground-breaking features and app development tools such as watch OS 7, App Library in iOS 14, macOS Big Sur which is the new OS for Macintosh computers, a new handwriting feature with Apple pencil in iPadOS 14 and watchOS 7.
Now there are speculations that Apple is developing its own automobiles, which will take its fame to a whole new level. According to Apple’s analyst, Ming-Chi Kuo, the iPhone maker is developing Apple cars and expected to launch between 2023 AND 2025. If that is true then the development will revolutionise the automobile industry like it did for the tech industry on the back of profound concepts. Truth be told, Apple has the capability to invest in new business models and foray into other industries, for the simple reason that it has built a robust technology driven ecosystem.
The industry is filled with competitors who seek to challenge Apple’s success with the launch of new technologies. In fact, experts believe that many global companies are following Apple’s ideas and innovations in the process to win. But the more significant questions point to: Can Apple maintain its edge in the tech market? Can the company innovate new products as it has done before? Will it be successful to engage more loyal consumers? If we look back, there are other competitors who are enhancing their product lines with new ideas and concepts, and it is only a matter of time before they emerge bigger. It is certain that Apple has the potential to produce something big, but it needs to continuously innovate to stay relevant in the industry while competing with the emerging companies who carry similar potential to overpower Apple in the coming years. For that reason, the company will have to strategically plan its next move to stay ahead of the game