
Apple surpasses Saudi Aramco to become the most valuable company - Zaheer
https://www.cnbc.com/2020/07/31/apple-surpasses-saudi-aramco-to-become-worlds-most-valuable-company.html
======
caiobegotti
What I don't understand is not the value of Apple as a company, because I
clearly see the value of their products directly as a customer for more than a
decade, but WHY IN HELL they have so much actual cash piling up. I won't say
they should split it with investors and blablabla but, really, why a company
like that would have a cash stockpile so gigantic (around 200 billion USD) for
so long without a long-term plan shared with stakeholders? It seems nearly
impossible for them to use all that money with whatever comes up for half a
century at least.

~~~
Solstinox
Look around at all the companies shaking taxpayers for loose change because
they could not handle a moderate economic downturn. A responsible company
needs a cash stockpile for the same reason a responsible person needs savings,
to weather storms.

~~~
mrfusion
Sounds like a prudent idea. On the other hand I’d worry about the macro
economic effects if every company held large amounts of unproductive capital.

~~~
lend000
If money is in a bank it is being redistributed throughout the economy at 1 /
the fractional reserve ratio. So $200 billion in their bank account could end
up creating $2 trillion in additional money supply in the economy, originating
from loans.

~~~
Slartie
And when the recipients of those $2 trillion put that money into bank
accounts, we're creating another $20 trillion in additional money supply. I
sure hope they end up in bank accounts as well, so we can create another $200
trillion.

Hey, see that? I created an infinite money machine! Now that's a good argument
for those original $200 billion being super useful when "put to work" by
storing them in bank accounts, right?

~~~
lend000
The formula to derive it is an infinite series that already takes that into
account, so no, it's just $2 trillion total. This is not considered a
controversial economic formula, but maybe you are on to something that could
win you a Nobel Prize.

Anyway, since the parent implied that "hoarding cash" (a.k.a. saving) was
somehow bad, I wanted to clear that up. They would only be reducing the money
supply if they were literally hoarding physical bills in a private vault.

~~~
dragonwriter
[text deleted because mathematical claim from memory was wrong]

~~~
lend000
Here's a better explanation:
[https://en.wikipedia.org/wiki/Money_multiplier](https://en.wikipedia.org/wiki/Money_multiplier)

------
actuator
Among all the big tech, I think Apple is probably the most resilient. The sort
of brand loyalty and image they have, any company would love to have it. It
makes even the less polished products from their stable escape the sort of ire
and financial impact that most other companies face.

Take the example of maps, it was clearly a way inferior product to the best in
market Google Maps, still a lot of users(my physical and social media circle
at least) persisted with it. This gives them immense power to grow out
products that can become really strong platforms in the future.

Also, their ecosystem lock in is really strong. I think in due time it is
really going to stifle competition. For example, it would be really
interesting to see how the headphone industry adapts to this where incumbent
brands like Bose, Sennheiser with their own brand power have seen their market
share erode very fast. Apple has already sold 100+ million airpods.

~~~
JumpCrisscross
More than any of the others, Apple at least tries to have _values_. Not
everyone agrees with them. But I challenge anyone to identify a positive value
mainstream America would associate with Microsoft, Google or Facebook.

~~~
SahAssar
I think a lot of us view that as merely marketing. I don't think apple's
values are any more concrete or "real" than the other companies you mentioned.

~~~
baddox
How do you distinguish between "mentioning your values in your marketing" and
"your values are merely marketing"? Apple's stated value of customer privacy
is pretty difficult to explain as "merely marketing." They clearly put a lot
of work into it and in some cases even accept the product feature limitations
that come with a privacy-first approach.

~~~
mickael-kerjean
A "privacy-first company" wouldn't remove the VPN apps from the Chinese apple
store, leaving their users with a device even Orwell didn't foresee.

~~~
scarface74
Should they not follow the laws of the country?

Wasn’t it just found in the large ElasticSearch hack that a number of no-
logging VPN providers were in fact logging?

------
zhoujianfu
I remember when I sold all my Apple stock back at $250 (pre-previous-split)
thinking “at this point they’d have to become the most valuable company on
EARTH to go up much more!”

------
JoshTko
I have the iPhone XR for almost 2 years and the uncased exposed metal rim is
virtually flawless. It's details like this that make me love the iPhone and is
part of why I'm a longtime investor.

~~~
nostromo
I love Apple but I’m frustrated for a few reasons.

1\. I’m sick of charging everything constantly. I feel like my phone, AirPods,
laptop and watch batteries are always needing too much attention. I would
prefer larger devices with bigger batteries.

2\. The screens for these devices are too fragile. The devices are beautiful,
but require ugly cases or regular, expensive repairs.

3\. There are too many missing devices in Apple’s ecosystem. A pro computer
under $3k. A TV. A smart speaker that isn’t crippled. Smart home devices that
don’t suck. Apple should stop trying to compete (poorly) with Netflix and
should focus on their ecosystem of devices and services.

~~~
social_quotient
Agreed, and that’s the issue I have with the cash pile. They should be trying
and failing quickly at a number of things, big things, including the small
items you raised. Take a guy like Elon, give him a 500bn in cash and see what
happens. The world would change in a big way.

Capital should be either sunk hugely into the R&D to change the world or
should be returned to shareholders to better allocate it.

That said, These guys aren’t playing the game 1 qtr at a time. Not even a year
at a time. They play the 100+ year game and likely they don’t see this money
as “big”.

~~~
baddox
> They should be trying and failing quickly at a number of things, big things,
> including the small items you raised.

That seems very antithetical to Apple's fundamental approach to product
design. Sure, they have some first-generation stinkers, but I think it's fair
to say Apple tends to err on the side of waiting until they can release
something to their standards.

~~~
jacobr1
Apple does seem to have a massive "hidden" set of R&D projects. I bet all the
items the GP mentioned are in some phase of development. Famously the iPad was
actually in development before the iphone! I suspect their culture of secrecy
prevents internal accountability unless the particular project has internal
visibility with execs.

------
xoxoy
I was scratching my head as to why Mac and iPad sales would’ve shot up 30%
YoY.

Then saw that two weeks before end of quarter they started a “back to school”
promotion (in June?) that throws in a free pair of AirPods with a Mac or iPad
purchase. Details here:
[https://www.apple.com/promo/pdf/EN_US_BTS_FY20_TandCs.pdf](https://www.apple.com/promo/pdf/EN_US_BTS_FY20_TandCs.pdf)

With a $479 iPad Air that’s 33% of the price of your purchase.

New Apple products can easily be sold on Amazon or Ebay for close to face
value, so this is a extremely easy and generous retail arbitrage opportunity.

My point is I didn’t see any language around this promotion in their earnings
report but suspect because it is so generous that both legitimate customers
and resellers are taking advantage of this deal, thus disproportionately
lifting sales for Macs and iPads vs other categories like iPhones which was
essentially flat YoY.

Their surprise beat was then in part influenced by this big promotion and not
necessarily totally organic demand...

Edit: They do something like this every year but this one started in Q2 unlike
last year in Q3 and includes much cheaper iPads, and is for Airpods for the
first time (a much more desirable freebie over Beats)

~~~
9nGQluzmnq3M
But AirPods have to be close to free for Apple to manufacture. Functionally
equivalent clones retail for under $10 on AliExpress.

~~~
stu2b50
This is wrong in two ways. First, the 10 dollar clones are ass, if you've ever
tried one.

Second, what the material cost is doesn't matter, at least on its own--a
gifted airpod is one that's not sold. The opportunity cost is real, even if
the material cost is low.

~~~
9nGQluzmnq3M
I agree, but that doesn't make my actual point -- that manufacturing AirPods
is cheap -- wrong.

FWIW, I did buy a $10 clone. The hardware was actually astonishingly polished
for the price point, but the software to control it was indeed "ass".

------
crazygringo
_Wow_ , it's up over 10% since yesterday. At 1.84T, it's not that far away
from 2T.

Though Saudi Aramco was the first company ever to hit 2T (back in December),
so Apple wouldn't be the first, if it makes it.

~~~
coralreef
Something like 30-40 years for the first trillion, and maybe only a few more
years for the next trillion.

------
lumost
Is this an artifact of under-priced dollar debasement? The Fed is now actively
purchasing bonds for FANG companies, these companies could in principal simply
buy back their own stock with this money at 0% interest.

This sounds an awful lot like the the situation where the imperial palace was
worth more than California.

[https://amaral.northwestern.edu/blog/how-much-was-
japanese-i...](https://amaral.northwestern.edu/blog/how-much-was-japanese-
imperial-palace-worth)

------
Traster
Just addressing the title a bit - Saudi Aramco isn't as valuable as is
claimed. Back when the crown prince wanted to float it he wanted to get it on
a real stock exchange and give up a real portion of it. However, this failed
because they couldn't get the valuation they wanted and wouldn't give the
transparency needed. As a result, it floated on the Saudi's own stock
exchange, floated only 1.5%, and according to some reports signficant pressure
was put on prominent people to buy shares. It was all very much a matter of
marking your own homework. Aramco would absolutely not be trading at that
level on the Nasdaq.

------
jSully24
I’ll be curious how the growth exceeding expectations impacts Q4. Today I
looked at ordering an iPad Pro, both the 1 TB and the 512 Gig and could not
get either one until early September.

While I’m celebrating the great quarter, how much will blowing out Q3 impact
Q4 by way of not having the equipment people want? They also announced a
several week delay and in delivery of the next gen iPhone. Might be
negligible?

------
person_of_color
And all without constant long term SDC/Quantum/Space? hype.

------
mensetmanusman
Use the cash to make global iphone only internet after buying spacex

------
mensetmanusman
Technology more valuable than sand mud?

------
wrshpFAANG
Just goes to show capitalism is all about screwing your suppliers
(developers), your customers, and using the government to enforce intellectual
property.

Although I'd contend that the later is not capitalism.

------
paulpauper
Amazon, Google will soon follow. I see amazon being worth $10-30 trillion
eventually,,, bigger than apple.

~~~
nwellnhof
Just for reference, $35T is the total market cap of the US stock market.

~~~
jonluca
Wait, apple makes up 5% of the entire US stock market? That feels... weird.

