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Apple becomes the first $1T company (washingtonpost.com)
339 points by fmihaila 6 months ago | hide | past | web | favorite | 338 comments



>“Apple’s $1 trillion cap is equal to about 5 percent of the total gross domestic product of the United States in 2018,” said David Kass, professor of finance at the University of Maryland. “That puts this company in perspective.”

The comparison would be Apple net income (~$50B) vs. GDP, not market cap (which has units of USD) vs. GDP (which has units of USD per year).


Or, the net present value of the US economy plus assets, which is probably pushing a quadrillion dollars.


No, 5 to 1 has been the ratio in recent decades. I know this was true in 1990s when I studied this issue, and it could not have changed that much in 20 years. So 100 trillion would be my assumption.


I wonder how that breaks down into categories. Some quick googling reveals the following:

~30 trillion in residential real estate

~6 trillion in commercial real estate

~30 trillion in pubic company value

Other big buckets I guess would be undeveloped land & private companies.

~100T sounds pretty plausible but I feel like I'm missing a big bucket or two. Not sure what though.


> I feel like I'm missing a big bucket or two. Not sure what though.

Considering how huge an employer the public sector is in the US, it stands to reason there's a huge value to in the government-as-an-enterprise, even if only considering cash value of assets, such as real estate (including natural resources!) and equipment (including military).

Of course, it might be very tough to calculate, if one includes every public entitity down the the local level and takes into account the debt of each entity.


Yeah, that was a real howler. I really hope he was somehow misquoted, because the comparison literally does the opposite of put something in perspective.


Well, I think it accomplishes that. You need USA to put aside 5% of what it can make in a year to buy Apple. That’s a ton of money!


Or one USA to build 20 Apples in a year.


Metric, Imperial, or Shit-ton?


I think it puts it in perspective as a magnitude of money, which I'd assume was all he meant to do. I don't think he was suggesting that Apple actually accounts for 5% of GDP, but was just using it to illustrate how monumental $1T is.


It does put it in some perspective. It's a lot. He didn't say they were directly equivalent. You need 5% of US GDP to buy Apple.


GDP is more like a country's Turnover than Net Profit


That’s debatable. There are a number of ways to calculate GDP. One is the sum of value added, as in the value of the end product minus the value of input. Another is the total sum of income from labor and assets. Since it includes time spent it is not really net profit but it’s not turnover either. It’s some hybrid but, I would say it is closer to net profit.


Quite a funny hybrid indeed: if I pay you to take my money, and you pay me to take your money, somehow GDP would have increased.

It's a measure of economic activity (of which our little give-and-take game would be an example) and it is meaningful under the assumption that all that activity happens for more rational reasons than just trolling economists. Note that our little give-and-take game would be a very expensive example of such trolling, if somehow the tax-man got involved.


I think the analogy holds, unless your bank account reflects your payroll for the year (no costs).


He said it is "equal to" not that it accounts for. I believe the analogy is valid, though can be easily misleading.


The units are different, it would be like saying that my car is half as wide as it is fast.


A particular years GDP isn't a per year unit, is it?


It is implicitly, but this is often obscured because currency is both a medium of exchange and a store of value. Accounting makes the distinction between your income statement (which has a time period attached, usually either quarterly or annually, and is focused on dollars exchanged with other entities) and your balance sheet (which is a snapshot quantity at a particular point in time, and is focused on dollars stored). GDP is part of a country's income statement - it reflects how many goods & services were produced & sold within the country.


The comparison is still valid even if the units don't quite match. For example, if you flip the comparison you get "The US's total gross domestic product for 2018 is equal to 20 times the Apple's total market cap" which is a pretty reasonable statement. If you want to talk about Apple's net income per year, that is a totally different statistic.


When I worked at Apple in the mid-90's (BS before Steve) they lost $1B while I was there. I left and moved away because I didn't want to be there when it was sold or went out of business. Exactly one year later Steve came back. Oh well. Being there at the time not one person would have ever thought Apple could be viable much less worth $1T.


Somehow I found it funny that companies like Microsoft and Apple basically survived because someone brought a new OS from the outside.


In the case of Microsoft they directly acquired the original DOS and the designers of Windows NT - so they've perhaps done that twice?


I didnt know this about NT - Where did they come from?


Dave Cutler and his team of OS designers from DEC integrated with Microsoft software engineers to create the NT kernel. Cutler was a crucial figure in DEC, but was waysided by management so he jumped ship, and built the design he wanted to build at DEC (but never got management buy-in for) at Microsoft. All outlined in the book Show Stopper! THE BREAKNECK RACE TO CREATE WINDOWS NT AND THE NEXT GENERATION AT MICROSOFT

Also, if you took a peek at his wikipedia entry, the guy is behind almost every large MSFT OS related initiative in the last few decades: NT, Azure, XBox hypervisor.

https://en.wikipedia.org/wiki/Dave_Cutler#Microsoft_(1988_to...


And if I remember correctly, NT's kernel was a microkernel. It seemed to be the best choice for the future, back then.


Windows NT was a hybrid: the graphics and windowing system is in the kernel for performance reasons (try running X on commodity hardware in the early 1990s) whereas Windows CE was all microkernel.


I wish people would stop saying its a hybrid because of the graphics being moved into the kernel...

That doesn't make it a hybrid anymore than having the filesystem in supervisor/kernel space does. Its a hybrid because its designed/layered like a micro-kernel with the individual subsystems appearing to do message passing and using subsystem managers (I/O manager, process manager, object manager, etc) which monitor/etc the message flows. Yet, instead of doing context/privileged switches when it passes messages/IRP's it simply makes abstracted function calls which hand ownership of the message to other subsystems that exist in the kernel's address space. This means you get a most of the abstraction/stability effect of having a micro-kernel without paying the context switch and message copy penalty.

NT has a crazy awesome design, which is somewhat obscured these days, but has yet to really be surpassed by anyone (IMHO).


Show Stopper! is a great read. My copy is always lent around the office, especially to interns: https://www.goodreads.com/book/show/1416925.Show_Stopper_


You can read more about it in a story from 1998 that was posted here two days ago (probably part of the reason that so many ITT know the story ;))

https://news.ycombinator.com/item?id=17652502


NT has a lot of VMS roots.


Probably a coincidence, but a lot of noticed that "WNT" is one letter on from "VMS".

Mind you, HAL is one letter behind IBM.


Coincidentally HAL is also Hardware Abstraction Layer, part of the WinNT kernel's architecture.

https://en.m.wikipedia.org/wiki/Hardware_abstraction#Microso...


Some claim the HAL/IBM connection was intentional (though Stanley denies it).


Which one did Microsoft buy?


MS-DOS.


didn't actually buy it initially just licensed it. The underlying company tried to sell the license but Microsoft stopped it.


Can you tell us a bit more about the morale and employees opinions back then? Was there a prevalent theory about what's wrong and how to fix it?


Best thing the CTO did (Ellen Hancock) was to kill the Copland OS project, which then led to the ultimate decision to buy NeXT, which led to Steve coming back, which lead to $1T. Props to her for doing the right thing.


Back in '96 I was an assistant admin for a network of some 100 Macs in a biotech lab.

My supervisor was a die-hard Apple lover, had a Newton, and a fair bit of Apple stock. They could do no wrong in his eyes.

I was a Mac fan (had a Duo 280c, encouraged my folks to purchase 603 clones) but pessimistic about Jobs return. In my view at the time, he had done damage to Apple with the Mac intro and had failed w/ NeXT, even though I was huge fans of the hardware of each. I just didn't think he had the ability to scale a hardware company. I was hoping for BeOS to be the savior.

Nonetheless, it was exciting to see him return as the interim CEO. My supervisor bought a bunch more stock, think it was something like $7/share, and I gave him alot of grief for being foolish. I'm sure he's living in paradise right now, lol.


Press was brutal so it was pretty depressing, some people were still hopeful when Amelio came in, but after a month he vanished and we never heard much from him any more. They took away everything, plants, drinks, even the popcorn machine supplies to save money. Then we were building a new OS which everyone knew was a nightmare death march.


I went to grad school with a guy who, the day Apple stock hit $14 a share, decided to spend $500 of his grad student stipend to buy some. He figured Apple's cash on hand was worth more than $14 a share.

I thought he was nuts. I was an idiot.


In the early 2000s I spent $1800 on a set of 18in chrome rims for an early 90s Accord, the wheels were almost half the value of the car. I use to do the calculations for if I had spent that money on AAPL instead of something so incredibly wasteful. It's easy to beat yourself up looking back in retrospect at dumb decisions.


If I never ate my favorite food during highschool (sushi) I'd probably have an extra 2k in the bank I could have spent on Apple.

If I hadn't ever played WoW, I could have had 540 to spend on Amazon. I probably also wouldn't have been as fat growing up.

If I had not paid for that dumbfuck YOLO trip to Singapore near the end of college, I'd have 2k to throw at Netflix. Or, actually, BP, this was right during the spill.

In other words, Amen man. So now I think today - why do I still go out to eat sushi, instead of tucking it away for another Microsoft buy? Why do I still play Overwatch with my friends here and there instead of spending another hour or two learning something? Why do I still blow assloads of cash on trips once or twice a year?

I guess, what the hell else am I gonna do with my time and money? Keep it till I die? I ride a motorcycle, I could die tomorrow. Actually, my family has a history of heart disease, I could die literally right now lol.

As long as peeps are putting away enough money to survive a crisis, and following the basics of investment principles re: their retirement, they're doing life "right," in my unprofessional opinion.

Sure I didn't buy a lot of stock at 18, but I did have a part time job, which let me go out to eat with my friends and take girls to movies and buy a car to drive us to Ren Fest in (with enough leftover to put together a SICK pirate outfit). I had enough saved to make it easy to buy my books in college. Playing WoW was fun and relaxing, oh well. That YOLO trip to Signapore beat a bit of that cultural close mindedness out of me as I engaged with a bunch of other students from around the world... and it got me a job in Taiwan after college, which was eye opening in ways I never could have imagined. Same with my trips today.

I could have done things differently and have more money right now, but if I had more money right now I guess the only difference is my apartment might be slightly nicer (maybe, I love my apartment), my motorcycle would be slightly faster (maybe, the one I have is kinda perfect for my style), and my clothes would be slightly more expensive (maybe, I'd probably just shop at Uniqlo anyway). I honestly can't think of anything really different about my life right now. Maybe when I retire I'll be like "dude you asshole, if you'd bought 30 more Apple stocks we could be on a boat right now." But then again, I might just die before then, so, shrug.


Off-late HN has been getting a lot of posts of the types:

"X% Americans live paycheck to paycheck"

"Y% American have nothing saved up for retirement"

"Z% Americans don't have $SMALL_AMOUNT for an emergency"

etc etc.

Your post perfectly explains why.


Where in my post did I indicate that I live paycheck to paycheck, have nothing saved up for retirement, or don't have an emergency fund?

Shitloads of Americans are in a tenuous fiscal situation because our education system has been gutted, our healthcare system is a bad capitalist joke, and thus wealth disparity is shockingly bad here. These used to be things that affected me, but now I'm fortunate enough to be a software engineer and so they don't.


I bought some at about the same time. With splits, my cost basis is less than $1/share, and my % return is well north of 20,000%.

Apple stock was the downpayment on my house.


AAPL allowed us a period of cost-free unemployment for six months. This was back in the days when the stock was more go-go than it is even now. Wife and I had a period of about six months between jobs, and we had a lot of AAPL. We lived off the gains (and probably a call contract or two), and by the time we both had jobs again, we had more than we started with.

Thanks, Steve!


Repeating (for the second time) a comment I made here in 2010: "Back in Macworld Boston 1996, I bought one share of Apple stock at $16 and got a framed commemorative stock certificate. It went into a box when I moved later that year and I completely forgot about until I found it a couple of weeks ago. It's worth almost $1,000 now!"

In the meanwhile, I sold off some of it, but a good chunk of it went into the downpayment for my house last year.


doesn't mean he held them though


This is what I tell everyone when they kick themselves for not buying BTC when it was $0.25.

You would have sold them the second they hit $1.00. The only people I know who got rich off BTC are those who found an old wallet on an old drive in their garage.


Relevant tweet: https://twitter.com/gregschoen/status/70261648811761665?lang...

"I wish I had kept my 1,700 BTC @ $0.06 instead of selling them at $0.30, now that they're $8.00!"


I have a friend who bought low and didn't think about selling until he had about $300,000 worth. Except he stored them on MtGox and they were gone.


Define "rich". I know someone who had an almost 20x ROI with BTC and is still holding it since 2013 I think. That is _VERY_ good ROI, I think. But the invested sum was a paltry $1000 that was a lot for him at the time.


Your sibling posted a good example:

https://twitter.com/gregschoen/status/70261648811761665?lang...

Had he held on to his until the very peak, he'd be sitting on $30 million. That's rich.

With BTC, 20x isn't that crazy. I'm talking about 50,000x if you dig up an old enough wallet.


Definitely - getting rich off these things means you have to go against convention. People have to call you "crazy" or "wild."


Don't get your causation mixed up though. Most of those people are actually crazy, wild and broke.


It never made "sense" to invest in bitcoin, and it still doesn't.

If you had done so, you would have made money, but it was a "bad" bet. It wasn't a company, you had no real information to go off of. No earnings reports, no statements, nothing. It was as blind a bet as you can get. If you were technically knowledgeable in the area I guess you could have "predicated" that it would be used to buy drugs and thus go up in value, but to this day we have highly technically competent people saying "this is fucking stupid, this is overvalued, this is useless." It's a religious debate at this point.

Throwing .1% of your investment portfolio at it, whatever, why not. I do that with derpy shit stocks all the time (looking at you, HMNY, what a fun ride). But I don't think anybody should be salty about "missing the boat" on Bitcoin or other coins. If you wanna be a millionaire, do drop shipping or something. Stream. Flip houses. There's way less risk averse, proven ways to make extra money. Bitcoin just seems "so easy." Get rich quick.


I agree about the saltiness, but not so about BTC being a bad bet, considering it held great promise for a relatively small investment and, I myself, was sold on the way BTC was presented by Satoshi. No matter what happens to BTC now, at least from it's founder's point of view, BTC is a huuuge success.


yeah - I sold Amazon @ $120 and was a genius for a short period.


When was that? The stock has split 4 times so a bit hard to calculate his return


The earliest point at which AAPL reached $14 (roughly $3.57 in post-split shares) was Nov. 1999. If they'd purchased 36 (500/14) shares, they would now have 1008 shares, worth roughly $200K.

So, absolute best case and assuming they held until the all-time high, roughly a 400x return. There would be another ~$30K in dividends, assuming no dividend reinvestment.


Does he still own the shares?


I haven't asked. But he takes his family on some pretty amazing vacations. He's doing well for himself. And he's still buying Apple products...


The most impressive part of Apple getting to a $1T valuation is that they did it with a P/E ratio of about 20.

I would like to see Amazon attempt that.


Here's what a trillion dollars looks like: http://www.pagetutor.com/trillion/index.html


Or about $3,000 for every person in America.


"A $600 phone?! Who's going to buy a $600 phone?!" -Steve Balmer


I worked in Windows Mobile at the time.

He was just quoting what the best market researchers had told him. We were given a LOT of market research papers with in-depth customer surveys where lots of people said, repeatedly, that they would "never pay money for a phone". If you think back to then, phones were "free" with a 2 year contract.

The idea of getting someone who was used to free to switch over to $600 overnight was, by any reasonable accounts, not going to happen. The market researchers did the safe thing and said that the status quo would continue.

Of course they were horribly wrong, but again, in the moment, trusting literally every expert in the field is not the worst position to take.

After all that I learned to be wary of market researchers.


While phones were routinely 'free' or $99, iPods were wildly popular in 2007 and routinely cost $300+, and one of the three legs the iPhone stood on was being an iPod.

It should have been a red flag back then if market researchers and the people that hired them didn't see this as a convergence of music player + phone markets; it was the point of the keynote! I remember people complaining then that they had to carry both their phone and their iPod around back then.

The smartphone market was also growing then, and devices like Blackberries and Treos were popular and cost $200+ on contract. I had been using a Treo since 2005, and remember the pain of getting apps on it and getting it to play mp3s or use GPS maps. When I saw the keynote, it was clear it was just the next logical step.

It's weird that Windows Mobile didn't see these trends. Perhaps it was a case of underestimating the general market interest, though iPod's success should have been a strong hint that consumers really wanted devices of this type and were willing to pay. iPods were more popular than Windows Mobile devices even then.

Finally there's just the 'sit down and use it' factor that the iPhone had. Once you played with it, it was hard to deny that it was the future. The fluidness and straightforwardness of the UI was so far ahead of everything at the time. Best I can think of as a comparison is sitting in a Tesla Model S after getting out of your Honda - it's not a question of if, but how much.

At $599 the iPhone was definitely expensive for the time, but any reasonable businessperson could conclude from watching literally the entire history of technology that component prices are always on a steady decline, and there were other levers to lower price like carrier contracts. When the iPhone went down to $399 a few months later it's success was a foregone conclusion - after all, that was just a bit more than an iPod but with way more capability.


It seems like Bill Gates didn't want to believe. From an anecdote about Marc Porat and General Magic [1]:

>Eventually you won’t really need a PC, because all your work will be in a sort of cloud.”

>Suddenly there was an explosion from across the table. “MARC, THAT’S FUCKING BULLSHIT AND YOU KNOW IT!” It was Gates.

To go all in they would have had to kill the PC. In the same way, MS didn't embrace browsers and the Internet for a long time.

[1]: https://news.ycombinator.com/item?id=17667776


Nobody gets to upper management in an established company, ESPECIALLY not in sales, by using their own judgement to override everyone else's.

No matter how right they may be.

If you want that sort of position, burying your own ideas deep and hide them in shame (use them to impress interns if you must) is the only way to go.


That's where Steve Jobs was really so better than everybody else. One should never be afraid to put what's behind, and start again on something new. This thing is often repeated in case of failures, but I've realized this is even more so true in terms of success. Success is harder to put behind and start over.

The big part of this is 'continuity'. If something works well, you are tempted to take the next obvious steps in the process. And you should. But after while its not hard to see that you are max'ing out the net utility you could extract out of it. At that point, one must stop, relook and not be afraid to start on something all over again.

Also this is so very true at an individual level as well. Never stop having a life. So many sports people retire between 35 - 40, then their whole life falls apart. This is also true with people have some early career success, I have seen endless examples of people reaching career peak by 30 - 35 and then everything falls apart, may be because they lucked out, but largely because they just can't start again. You have to start with a new purpose when you come to an end of an existing path.

Or time is expensive, and it shows your loss sooner or later.


It's easy to forget just how popular ipods were. I think you're right, that is a very important aspect of the original iphone.


let's not forget it was unveiled as a touch-based ipod + web browser + phone!


Also, while no one at the time predicted what the iPhone would look like, it was right under everyone’s nose.

Reveryone was predicting a “True Video iPod”. An iPod with a widescreen display and all touch.

http://medialoper.com/video-ipod-delay-may-be-a-bad-thing-af...


Consumers are just as bad at predicting the future as everyone else. Market research is great for making iterative improvements or learning what people are frustrated with, but it's data, not knowledge, and definitely not prognostication.


This is incredibly true, a huge lesson from the iPhone is that consumers can not tell you what they cannot imagine.

Creating entirely new markets takes vision.


They should have learned that lesson from the iPod - “No wireless, less space than a Nomad, Lame”


Don't forget iTunes. Part of why iPod succeeded because it allowed stress free easy access to a giant % of the world's music, all at one constant price.

The iPod wasn't revolutionary in any respect, it was a perfectly executed version of what other people were already doing, that had a huge, incredibly well done, marketing push behind it, with even the smallest detail given attention.

Also the white ear buds were genius. Everyone who used them was advertising the product.


That’s true. It took two years for Apple to sell thier first million. It wasn’t until both the music store came online and iTunes was released for Windows that it took off.

But even by 2007, a small percentage of the music people had on iPods were bought through iTunes (less than 10%?) according to Jobs “Thoughts on Music” essay.


I guess the conclusion might be: Unimaginative people are bad at predicting the future.


Imaginative people are bad too, they predict the wrong version of the future.


There's a Henry Ford quote that's pretty popular at Apple - “If I had asked people what they wanted, they would have said faster horses.”


And another I recall, although not sure to whom it is attributed:

"If you asked Porsche owners what they'd like to improve in the car, they'd all say more leg room, a bigger trunk, and better safety features. Congratulations, you just designed a Volvo."


Is that really what Porsche owners would say, though? I've owned a couple of Porsches in the past, and if you asked me, my answer would have been "MOAR...POWER. TIRES...MOAR STICKY." If I wanted a Volvo, I'd buy a Volvo.

Or maybe I didn't get the joke.


I read recently that most BMW owners don't know that their cars are real wheel drive. The enthusiasts are the minority, the majority are the status seekers.


That’s one of those quotes that helps start a discussion, but there is no evidence that Henry Ford actually said that quote:

https://hbr.org/2011/08/henry-ford-never-said-the-fast


The original iPhone pricing was really baffling. Had it not been a really revolutionary device it would have flopped IMHO.

You paid $600 for the phone, and then AT&T added the phone subsidy to your bill anyway (and never took it off), so it was just stupendously expensive. Apple lowered the price pretty soon after launch.

It was worth it to have a browser on a phone that wasn't total dogshit.


I still remember the early iPhone days when german providers heavily subsidized the device. With a simple 30-50 EUR/month plan you paid about 50 € for the device upfront and that's it. Sure, you might argue that the price might be hidden in the monthly fees, but it would have been the same 30-50 plan regardless of if you opt for the iPhone or your run of the mill Motorola, Nokia or Samsung device. Basically the iPhones were sibsidized by all customers and you'd be a fool to select a cheap phone. Also note that these iPhones were unlocked and ready to be sold on eBay once it was time to upgrade.

These days you pay full price stretched over 24 months.


Well, back in 2003 or 2004 I got myself a pretty damn expensive Sony Ericsson P910i (for €700 or so) in the hopes it would provide functionality that remotely resembled that of an iPhone. It was okish, but disappointing in some areas. I actually bought 3rd party software for it, including GPS software with an external bluetooth GPS module, which worked pretty well. Nokia also had their communicator lineup, which was similarly expensive.

While these weren't mainstream, they did exist and sold well enough to warrant multiple generations of them, and were more expensive than the initial iPhone was at release - so I don't understand the people who said nobody would buy that thing. This combined an expensive music player that sold a ton of units with a phone for more or less what you'd pay for a decent higher-end phone + an iPod in those days. The moment I saw it, I knew I'd buy one. The lack of installable 3rd party apps and a GPS unit was something I immediately identified as an issue, but it was clear what direction they would be going in. I eventually had to wait until the 3G was available in Europe - which also addressed both issues (although the GPS receiver was absolute crap).


It’s not that the market research was wrong in saying that no one would pay $600 for a phone, it’s that we reached an inflection point where smartphones were no longer primarily phones but became portable internet terminals. Msft should have understood that given the existence of PocketPC devices like the iPaq.


From Microsoft's perspective, they were winning.

They had strong YoY gains on Blackberry, and Windows Mobile was set to overtake them eventually. By offering lower cost devices that didn't need to pay an extra per user Blackberry fee to the phone companies, MS was out competing Blackberry on price, while executing on their traditional strategy of having multiple partners flood the market with a variety of devices to fit everyone's needs.

(Where everyone was defined as business users.)

There were groups at MS experimenting with consumer focused designs, and even exploring app store types of business models (though they hadn't yet evolved into what Apple eventually released), people did realize that opportunity was there, but it is hard for successful incumbents to change.

Windows Mobile 7, which never saw the light of day, had just gotten a new kernel, support for higher screen resolution, and was setting out to be a really nice OS to use for business users.

Apple also did something else, it showed that the relationship with carriers could be improved. Microsoft had a very hard time getting past carriers testing requirements, they had a very hard time pushing out patches and updates. Apple showed a way by which carriers could be strong armed into being less customer hostile. The same way Apple showed that the music industry could be dragged into the 21st century.

Apple also dramatically brought down the cost of certain technologies, as they have continued to do. A single manufacturer making a huge order for one part drops the price of that part for everyone else. The OEM model Microsoft used for Windows Mobile, with the myriads of device form factors, was not able to create those types of market efficiencies.


It was obvious to me right during Jobs’s demo that iPhone would completely destroy everything that came before and take all the profits. And price is much easier to lower than it is to raise, and Apple did lower it about 2 months after releasing.


Good lesson about market research. What they really learned is that people don't pay money for a phone. Asked if they would like to, they said "not really."

Windows doubled down on the lower price range thing, which was disastrous for both the branding and the development of windows mobile. Everyone associated it with crap phones and they were stuck developing for last year's devices.


> Windows doubled down on the lower price range thing, which was disastrous for both the branding and the development of windows mobile.

This is very true. Internally the devices we had to use were very nice. The most responsive phones I've ever used were internal test devices.

That and my Motorola Q9H. Amazing device from a different era.


Marketing probably correct if you asked that question about the current set of incumbents that were out. Blackberry, Palm, and the rest of the phones with keyboards were not worth $600. I think Marketing's failure was not factoring in the new product category that was being defined. Honest mistake, honest miscalculation, and great quotable from Ballmer.


When it comes to pricing I'd never rely on what people are saying. They may not like the price, but the only thing that counts is the actual, potentially reluctant vote with their wallet.


The phones were actually free back then. There was no BYOD discount on any of the major networks.

The most I've ever spent on a phone was $200 for a Motorola Razer after damaging my first one before it was upgrade time.

Now I use a Moto G4 Play, and it's great. Why anyone would spend more than $200 on a phone unless there is a business requirement (ie, it makes you money) is beyond me.


> Why anyone would spend more than $200 on a phone unless there is a business requirement (ie, it makes you money) is beyond me.

Are you also surprised that people spend over 50000€/$ on a car? The answer is simple: because it turns out that having nice things is nice.


When the difference between the two cars amounts to banal gadgetry of little utility, yes.


The phones were actually free back then.

No, the price was built into the contract. The few whack jobs that used a phone that they paid for outright got screwed because the model didn't even consider that.


He was right. Hardly anyone did buy a $600 phone. Apple had to reduce the price within 6 months, the next year Apple and AT&T did the standard subsidization model.

Now even Apple offers a payment plan.


"... and it won't appeal to business customers because it doesn't have a keyboard"


Come on, he had to say something in public. Behind the closed doors he gave hell to the Windows Mobile team just as soon as he got his hands on that iPhone.


True. But it was funny to see how the Apple haters ate this up.


“No wireless. Less space than a Nomad. Lame.”


Ahh the Creative Nomad Jukebox Zen Xtra. What an awful name it had. An mp3 player one could slap a larger 2.5" HDD into, and with a replaceable battery. Mine still sits on my desk, a monument to a forgone era. The case front and back are aluminum and removable, which made it easy to spray-paint :)


I do believe all of those are also attributes of the ipod. I definitely replaced both the battery and hardware inside of iPods back in the day, the only downside is that you risked dinging the seal getting it open.


people line up to buy $400 nikes. A $1400 phone every 2 years doesn't sound so unreasonable.


PetroChina was the first for a brief period back in 2007. Apple is the first trillion-dollar company in the United States, though.

https://www.theguardian.com/business/2007/nov/06/china


I think about such a large number this is and I really am not surprised. Apple has created a product that I use all throughout the day. I won’t leave home without it and I’ll drive back if I forget it. It’s so addictive that I have to take active steps against using it too often around my wife or kids.


Besides my family there are 5 possessions I get mildly depressed if I don't have. My iPhone, my Bragi dash, my Tesla, my house, my Bitcoin. Maybe 2/3 of these I can see being usurped by something better - I'll leave it to the reader to guess.


Is this supposed to be good news? I see lots of excitement in this thread, but isn't having a single company worth so much money a sign that we are, as a society, failing to create an economy that is truly competitive and fair? We've already got banks that are too big to fail, soon we might have private companies that are humongous to the point of having the same status.


This is just some sort of milestone that's being published and discussed widely.

On the point of a single company being worth so much money, here's a different perspective. One of the many measures of how valuable a company's stock is, is the P/E ratio (price divided by earnings). It just says what multiple of the earnings a buyer of the stock is willing to pay. For Apple, this is now around 20. Take a look at another stock, say Amazon. As of now, it trades at a P/E multiple of 145 and has a market cap just shy of $1 trillion (where Apple is), at $895 billion. If Apple were treated the same as Amazon by the stock market, it would have a market cap of over $7.2 trillion today. If Amazon were treated the same as Apple, its market cap would have to be about $124 billion. Yet, this is where we are.

From the "too big to fail" angle, a simplistic analysis based on the above numbers alone would say that Amazon is a lot more leveraged and riskier than Apple is (the latter also has a huge cash pile of more than a couple of hundred billion dollars).

So the issue here is not that Apple has reached $1 trillion in valuation, because that's well deserved for a company that makes so much money. The issues exist everywhere in what companies do as larger contributions to society and how they're rewarded by the stock market.


Turning that argument around, in a fair and competitive market would it be impossible for a company to grow to a $1T valuation?

Do you think the majority of Apple's $1T valuation is attributable to abuse of government regulation or patents?


We know that networked technology businesses are mono/duopolistic by nature. So even if there are 10 amazing competitors, only 2 will survive, and they will be very protected from future competition.

This seems unfair.

And yes, that's a big reason behind why Apple is a $1T company.


> in a fair and competitive market would it be impossible for a company to grow to a $1T valuation?

It depends on your definition of "fair". In my view, such a market would be regulated as to avoid that companies become too big to the point of turning into black holes that suck everything around them.

Money attracts top talent and allows companies to buy out possible competitors. That in turn generates more money.


Please explain in what way Apple is "a black hole that sucks everything around it".


Maybe Apple is not even the best example, but look at Google or Facebook. How many potentially successful competitors have they bought off? How much more diverse could the market be if they hadn't been allowed to do so?


Reminds me of the email Steve Jobs sent after Apple's market cap passed Dell:

> Team, it turned out that Michael Dell wasn't perfect at predicting the future. Based on today's stock market close, Apple is worth more than Dell. Stocks go up and down, and things may be different tomorrow, but I thought it was worth a moment of reflection today. Steve.

https://www.nytimes.com/2006/01/16/technology/michael-dell-s...

That market cap was $72.13 billion in 2006, by the way. What an amazing run Apple has made.


I dislike market cap as a measure of a company, as clearly a company can be wildly overvalued or undervalued. It is a not as if the "wisdom of crowds" has calculated the true value of a company.

During some of the pre-crash days early in the century, publications would trot out companies ranked by market cap, as if that really meant something. All I remember is various of these companies going under in the crash, despite their pre-crash valuation.

Revenue is a big deal. And profit too, although Amazon has shown you can keep that close to zero by reinvesting in growth, and that can work too.


How much is my desk worth on the market? However much somebody is willing to pay for it.

As the article states, Apple's "value" as a company comes from, in part, the fact that it's a good investment. Some may argue that "the fundamentals" of the balance sheets and whatnot doesn't justify a $1T valuation, but they would be missing the intangible parts of the business which cause it to be worth exactly that much.


I'm not saying Apple isn't worth a $1T market cap. I'm just saying you wouldn't use market cap to calculate if a company were a sound long-term investment. You'd look at the fundamentals, then make a determination of what you think the long-term value of the business is, then you could look at the current market cap and determine if it is under- or overvalued. Breathless reporting on the market cap of companies is sloppy, I think. The market cap kinda floats around, and worst case may be completely unrelated to the true long term value of a company.

Warren Buffet for some time said that he thought Apple was undervalued. I have no idea what he currently thinks, but it is probably still a reasonable value.


>Warren Buffet for some time said that he thought Apple was undervalued. I have no idea what he currently thinks, but it is probably still a reasonable value.

He currently owns ~5% of the company.


"For comparison, the same $10,000 invested in an Standard & Poor’s 500-stock index fund would now be worth $2 million."

That doesn't seem too bad considering the risk involved investing in a single stock.


The number I want to know: How would that $10,000 in S&P 500 fare if AAPL was removed from the index for the duration of the calculations.

Probably not significantly less, but I'd be curious anyway.


This has some decent charts and historical perspective (inflation adjusted): https://www.fool.com/investing/general/2012/08/22/a-history-...


PetroChina was the first for a brief period back in 2007.

Apple is the first trillion-dollar company in the United States, though.

https://www.theguardian.com/business/2007/nov/06/china


I have to say this is an impressive achievement for Apple. Good on them. Although I am sad that an insane amount of wealth is being accrued by the few. The top 6 US companies (all of them tech) are worth more than 5 trillion. That's almost 30% of US GDP.

In the last few years there's been an unprecedented rise in wealth yet as both a nation, and a part of a global civilization, we are moving back in some aspects. Even locally, housing is a shit show in the valley and trillion dollar valuations makes it worse for the service class.

Extreme poverty in US is on the rise, tons of people are dying of preventable health conditions. Healthcare and education are getting more expensive. Global warming and pollution aren't really turning back.

I guess the only mega billionaire I respect is Bill Gates because he's truly putting his money where it matters. Funding all sorts of moon shots like clean nuclear energy, wiping malaria e.t.c

I'm not saying its Apple's job to fix it. It really isn't anyone's job to fix the big problems. BUT with the insane amount of cash the big tech cos have, that's hellova resources that could be invested towards bringing the entire human civilization forward to a peaceful, clean, educated and a healthy planet where everyone has the basics and we're not dying because of very preventable issues.


They pay taxes, shouldn't government take care of these issues? Isn't that what governments are for?


Paul Graham in 2015:

It would have been a good deal for Apple's board to give Steve 95% of the company.

Market cap when he came back: 1.73b.

5% now: 33b.

https://twitter.com/paulg/status/674760647767285761

Today, 5% of the company is 50 bilion. Jobs became de facto chief after then-CEO Gil Amelio was ousted in July 1997 (wiki). So that would make an annualized AAPL gain of 17.3 percent, excluding dividends. Even more impressive.


I wish I'd bought Apple stock in December instead of Bitcoin.


Speculative investments are like gambling. Don't be sorry for Apple. Try FB...they may hit the trillion dollar cap as well..who knows...it's all just speculation.


FB has a problem with young people leaving. I wouldn't invest in FB.


What are these young people using instead? WhatsApp? Instagram?


Yes,and Snapchat.


Well, Apple had one or two problems as well and here we are...


Is Samsung Electronics ridiculously undervalued or what? It generates more profit than Apple https://wccftech.com/samsung-posted-higher-profit-than-apple... yet is valued at only $290 billion instead of $1000 billion. What the heck.


I think there's three big reasons.

Reason #1: Apple has 243.7B in cash right now. That'll already push them to nearly Samsung's valuation.

Reason #2: Samsung's business is more vulnerable. Most of their profits came from the chips division:

https://money.cnn.com/2017/07/27/technology/samsung-profit-a...

Samsung sells components to many companies, including Apple. In fact, Samsung makes more money from iPhone than they do from the Galaxy S8:

https://www.theverge.com/circuitbreaker/2017/10/2/16404430/s...

As an OEM, Samsung has a much more vulnerable moat. What happens when Apple starts to make those components on their own? They already started doing it with processors. What about memory? They buy a ton of memory from Samsung.

Reason #3: reality distortion field :)


#1, so you agree that it is undervalued?

#2, Samsung's business is diversified, not vulnerable. During the DRAM glut years ago, the mobile division's higher profit helped cushion their chip division's lower profit. Now, it's the other way around. Also, unlike Apple's reliance on a single product line, their mobile sales come from many different models, greater than the sales of Apple's in aggregate, but, as individual models, lower than that of Apple iPhone. CNN's comparison likewise is nonsensical.

Apple accounts for about ~3 or 4% of Samsung's overall sales last I checked. Apple has significantly cut their reliance on Samsung, especially after the legal battle started in early 2012's, and stopped using Samsung's parts before -- for instance, the earlier iPhone Ax chips were designed and manufactured by Samsung in Texas, USA, but now Apple designs them in-house (after PA-semi and Intrinsity acquisition in 2008 and 2010) and outsources manufacturing to Taiwan/China. That was about 6 years ago and Samsung is still laughing their way to the bank with about $50B in profit last year.

#3, I've too noticed that a lot of Apple fanbois are out of touch with the reality at times (is that what you call reality distortion field?). Congrat Apple for achieving such huge milestone and I love my MBP which is 6 years old and still going strong, but surely, no sane mind would believe that Samsung would be out of business (or vulnerable) without Apple.


> outsourced manufacturing to Taiwan/China

Actually, it's 50/50 chips produced by TSMC (taiwan semiconductor) and samsung.


That was years ago when Samsung was on 14nm (vs TSMC's 16nm). Apple completely moved all US based A chips manufacturing to Taiwan.


#1 is a good point. Samsung's cash pile is $40 billion, decent but quite a bit smaller. Apple should be worth more than Samsung, just the size of the difference seems a bit out of step.

About this moat. A fab is not exactly a shoe, it's not something that anyone can just do. The idea that Apple would make their own memory is out there. Apple still uses TSMC or Samsung to make their SoCs, and will have to keep paying those companies for that. Designing the chips is relatively low cost in comparison. Apple cannot easily just make their own. I mean this stuff is advanced technology, it's at least harder than switching from iPhone to Android. People talk a lot about the wall garden and how that prevents switching but this moat is theoretical, it's never been tested. Apple has been good about keeping pace or in front of the competition hardware wise. For a company making good products it deserves the profits, but if it falls behind I don't expect the "moat" to save it. Majority of apps people use are free and are cross-platform. There are only a handful of relevant apps like iMessage or Sketch that are truly apple exclusive. Mac sales have been declining recently and I personally use 5 platforms, linux, mac, windows, ios, android and have no major problems.

#3 :)


just to nitpick, Samsung's cash pile as of June 2018 is $83B, but once you combine all forms of assets (ie, inventories, PP&E, etc) it comes out to about $300B. Apple doesn't have large PP&E (their datacenters aren't worth much) and other forms of assets. Samsung made $50B in profit last year, but it also has much greater R&D and CapEx than Apple.


Samsung's consumer electronics division isn't anywhere near as defensible as Apple's - they have little differentiation from other Android device makers which can be seen in the constantly fluctuating leaderboards of Android manufacturers (see Oppo and Huawei jumping 40% YoY).

If Samsung had their own OS + software technologies that differentiated them from any other electronics manufacturer, and offered their own services on top of that that made billions, and had a large developer base that was all-in on building software on their platform to further differentiate them from others, they might have a stronger business. As it stands, Samsung is just treading water in a zero sum smartphone business.


It's listed in the South Korean market so it's harder for small investors to access. Also, South Korean stock market is undervalued in general because of the North Korea risk.

Also, Samsung is under tight family control through complicated loopholes and cyclic ownership structure so it'll be hard to gain any significant control of the company away from the family, which makes it less appealing to investors I guess?


It’s more about how likely those profits are to continue in the eyes of the market, not what they currently are. In this case, you’re comparing a company with a massive consumer moat (and massive cash reserves to defend it), where people will continue to buy the iPhone regardless of the suppliers Apple uses, versus a company largely without such a moat. Not saying it’s correct, but I am guessing the brand and moat it provides is a large part of the difference in valuations.


I like to think that between AAPL dividends and Apple hardware resale value (not even counting the value of the stock I’m holding on to) my spending on iPhones and MacBooks and Apple Watches has all been free.

Also, I sometimes I buy put options before a big product reveal in advance of the frequent stock price drop when all the analysts say “Is that what all the hype was about? That’ll never sell!”. Of course the stock prices pops back up again after Apple can’t keep up with demand.


Market cap is number of shares times share price. Is this equivalent to total amount of money that went into AAPL? Did investors put in 1 trillion dollars?


I don't think so. All of the money put into to AAPL (via the public stock market) is all the stocks issued via public offerings * the price of the offering, no? After that they have just been traded without Apple seeing any of that money. Stocks given as compensation also contribute in some way, if we expand on "money" as to include forgone income by the employees.


No - imagine if you had bought 100% of Apple shares for $1 at incorporation, and then sold 1 share for $207. That would make the market cap $1T and the total investment would be only $208.

It's more that the investments into Apple + the amount of money made by shareholders equals $1T.


Good for it. Becoming a trillion dollar company selling quality products people love. Not data mining everything about your life and using it for advertising (Google), ruthlessly destroying competition (Microsoft), or destroying the environment (Exxon). How old fashioned.


On the other hand. I think Google creates way more value for the world, they are just not as good as Apple at capturing that value.

Android, Maps, Docs, Gmail, Navigation, Analytics are all (mostly) free.


I like Apple’s simple transaction model - I give them money and they give me stuff. My desires and thier incentives are mostly aligned.

Everything Google does is about advertising and collecting data. Those two things don’t align with my desires.


>>Those two things don’t align with my desires.

They align with the needs and wants of billions of people.

Now Apple might be ahead. But its not hard for them to lose all of that. Apple as of now is not useful to the masses in most countries. Google is.

There is a reason why companies like Dell and Microsoft ruled so much in the 90s to the 2005. Once you exhaust Steve Jobs's established product lines, you are just selling expensive cosmetic shining gadgets offering little in extra value compared to Samsung or Dell. At that time is when Google like companies will outshine Apple.

Scary thing for Apple is the new Macbook Pro already shows some of these problems. Steve Jobs is no more, and its already showing.

In fact one big revolutionary product from Google could change everything for Apple. The raw utility of Google search still far exceeds that of iPhone. And that's just one product. Maps, YouTube, Android etc have very large utility to common masses compared to iPhone.


There is a reason why companies like Dell and Microsoft ruled so much in the 90s to the 2005. Once you exhaust Steve Jobs's established product lines, you are just selling expensive cosmetic shining gadgets offering little in extra value compared to Samsung or Dell. At that time is when Google like companies will outshine Apple.

Dell and Microsoft won when the user is not the customer - enterprise sells. Apple brought in the “consumerization of IT”. People have been predicting the death of Apple and the failure of the iPhone for 8 years. They swore Android and especially Samsung was going to take over. Samsung in fact is seeing price pressure and they are struggling - not Apple.


Android has already taken over in sheer usage and deployment numbers.

In fact, a lot could change over the coming years.


>Steve Jobs is no more, and its already showing. It's interesting how many years people will still repeat that. He's gone for 7 years now. If Tim Cook wasn't fit for the job, it wouldn't have grown from $350 billion the year then Jobs leave Apple to where it is now.

>Macbook Pro already shows some of these problems It really doesn't. Apple has their fuckups time to time, like Pippin, G4 Cube, Ping, Maps or 'you're holding it wrong' iPhone 4.


They're not free. They just don't cost money. Arguably they're very expensive.


They're not free. They just don't cost money. Arguably they're very expensive.

This is a distinction most people don't grasp. I didn't, myself, until recently when a briefing from the legal department resulted in scouring the word "free" from eight web sites and replacing the word with "at no cost."


It really depends on how susceptible the particular user is to the cost of being a part Google's ad network. If Google's ad network intelligently informs you to make better consumer decisions, then you can argue that you get paid to use Google's services. But unfortunately, too many people derive extreme negative value from being a part of it by being manipulated into making decisions that harm their lives. Even poorer people could easily be paying thousands of dollars in cost to their health (sugary drink and alcohol ads), bank account (financial scam ads), and community destruction (political misinformation ads).


DuckDuckGo looking nicer every day.


DDG is essentially just a reskin of Bing.


A privacy filter over Bing is fine by me. Lately I've been switching to incongnito every time I search for any product, video or anything to do with news or politics. It's getting ridiculous. I should just switch to DDG permanently.


Use startpage, then. It's a reskin over google, which seems to provide better results.


Yes. Google seems to think that a single video totally changes what you prefer, especially if it is some popular topic like politics or music. OTOH it'll take a lot of ted lectures and programming videos to make your feed more oriented to words those. Is it me, or does anybody else notice this?


DDG claims to have multiple searches, like local or specialized search engines, but if Bing shuts down they would probably be in trouble.

That said it’s irrelevant. Microsoft is happy to keep the competition alive for Google and I bet they are winning some revenue from their DDG deal, so it’s a win win.

And if DDG gets big enough, and it probably is already, they can develop their own web crawler - because in case you don’t know, it’s the crawling part that’s really expensive.


Apocryphally Bing stands for "but it's not Google", which would be delightfully apt here.



And literally billions of people don't have the money to spend on products like that but are able to use them because they can pay with their data, which has no cash value to them.


That doesn't really make any sense, right? How can those folks' data be worth very much if they don't have the money to pay a subscription fee for Google?


Rich folks are effectively subsidizing access for the poor. This is an advantage of Google's business model which is often overlooked by richer folks (who can easily afford subscription fees and Apple products).


Aggregate with affluent people's data and it becomes valuable to advertisers who will never know the difference maybe


did you misunderstand the intent of the statement? It's common usage when talking about products.


Any financial analyst would tell you their ad revenue, or even their market position would be at serious risk without each of the products you mentioned. Building and maintaining product suite is the cost on the ad revenue.


Google's products are not free as in you don't give them something. I don't like Google's price, so I give actual 'merican dollars to Apple.


We can still complain about their walled-garden approach to software distribution, particularly the extortionist 30% fee and handicapping of non-native apps. Or their kowtowing to the Chinese censors.


Their walled garden approach is looking smarter and smarter with every EU fine that gets thrown at Google.

As an aside: As an engineer, I dislike their walled garden approach; but I love their approach as a consumer. To be frank, most companies have bad taste and poor UX design. Apple doesn't knock it out the park all the time, but their products are consistently good and their design guidelines for iOS apps enforce some of the same quality. So yeah, I'll take a walled garden approach if the garden is beautiful.


> but I love their approach as a consumer.

Quite often anti-competitive actions are beneficial to customers at the expense of other companies.


I'm starting to see a lot of people charging Facebook/Apple/Google/Amazon with anti-competitive behavior, and yet most of the charges (including a lot of the ones the EU charges Google and Apple for) are just normal business behavior. Nobody cares about whether your smaller firm can compete against larger companies or not.

As a consumer, I don't give a damn if Apple is "mean" to your business. Learn to compete better.

If these companies are stopping a better product from coming to the market then by all means lets throw antitrust at them; but if your product is just a clone and/or lower quality product that cannot get users, nobody cares.

Sorry, but learn to compete.


While I might agree in general (or at the least for consistent application), my point was that often things that help you hurt others. What the law considers anti-competitive and what I consider anti-competitive are different, and I wasn't addressing the law at all. People should just be aware that their consumer choices may harm others that they cannot easily see, that's all.


Exactly — this.

There is a major difference between what Microsoft was doing back in 90s and what Apple is doing today.


I don’t think you were around before the App Store. The carrier were a lot stricter about what you could sell through thier stores and the carrier took a 70% cut.

Not to mention the cut the publishers, wholesellers, and the retail stores use to take when you sold boxed software.

Their cut is the same as Google’s and Steams.


I was around. I had a flip phone from Boost mobile, and my ringtone was "Chain Hang Low!"


The 30% fee is not baseless.

Steam charges 30% to be on its store. Same with PlayStation and Microsoft Store.

Seems like it’s the standard distribution fee.


Apple was the first to lead with this egregious fee. They should be forced to unbundle the fee into optional components, e.g. five components of 6% each, minimum 2 components must be chosen (12%).

That would subject each service fee component to competitive quality/demand forces within Apple, e.g. app search, trials/CRM workflow, app distribution. Developers and users can both exert choice on the subset of fees applied to a transaction, so they can provide performance-based feedback to Apple.

Even a monopolist can compete with itself, to improve service and product.


Apple was the first to lead with this egregious fee

Before that carriers had much higher fees when you sold J2ME apps on feature phones through thier store.


What type of customers or market sectors bought those apps?


The same types of customers. For instance, back in the day around 2003-2006 Sprint sold J2ME games and apps that once you purchased them, you could redownload them on new phones.


Apple's App Store wasn't a thing when Steam Launched, same for the first party bundled licensing. (Playstation, Microsoft et al.)


> The 30% fee is not baseless.

I said it was extortionist, not baseless. Of course they deserve a fee. But it's extortionist in the sense that you have no choice, if you want to sell to worldwide mobile users with deep pockets. Apple also forces as many payments as possible to go through their network, and bans apps that try to take payment outside the store if the app does not provide sufficient justification. In fact, they could just probably charge 50% and developers would keep paying them...

> Steam charges 30% to be on its store

Pretty sure Steve Jobs didn't set the 30% price point by looking at the Steam store, lol. More likely it was the other way around and Steam is 30% because the App Store is 30%...


> Or their kowtowing to the Chinese censors.

And what exactly is the alternative option for them there? They can either follow the rules in China or completely lose all of their business. That is on China, not Apple.


And I'm really curious why people here are not mentioning Apple gave Chinese gov access to icloud data for Chinese people. Kind of double standard I have to say...


People savage Google yesterday for launching a censored search in China. Apple essentially gives iCloud to the Chinese government and the outrage levels don't seem to be the same.


Its because google has 'don't be evil' as its unofficial motto. Googlers joined google because they agreed with their ethics. People at apple knew what thy were getting into and consumers knew and expected it to remain the same. Change causes chaos in humanity.


At least letting us know that they don't like it so at least I know it's against their principles and they might push back in other cases when asked. That they seemed so willing to do it should be the fear, not that they had to (and by the way, they didn't have to, losing all of their business is an option for principled companies).


They can either violate the privacy rights of Chinese citizens, or not sell to Chinese citizens at all.


I'm an Apple fan - congratulations to Apple - but on the other hand Apple being the biggest company in the world is pretty uninspiring. After seeing Tesla build a mass market electric car factory, or SpaceX launching a Roadster into space, a company with hundreds of billions of dollars in the bank making phones and headphones feels like a wasted opportunity.


It is really hard for large companies to innovate. Especially with so little competition (I like to think that android and apple users are different demographics). It is the same case with Intel. Sometimes I'm mad at them as they are wasting valuable human time because of slower processors.


Tesla will only be inspiring once they can produce a product at a price that people are willing to pay and do it profitably.


selling luxury consumer goods that at best are "nice to have" - you need to look deeper than "oil = bad" if you truly want to assess the impact of a company. It just seems you're more concerned with 1984 than with brave new world


[Maybe I'm being excessively cynical]

Sorry to rain on your paradise, but is there something old-fashioned about using "Double Irish"[1] arrangement to evade legitimate taxes too?

[1] https://www.irishtimes.com/business/apple-s-cash-mountain-ho...


Tax evasion is very old-fashioned.

zeusk 6 months ago [flagged]

Exploiting 3rd world labor and selling overpriced crap to the rich of the world. How old fashioned.


As opposed to employing 1st world labor and let 3rd world labor starve?


You think, that is the only other thing they could be doing?


Alphabet has two stock symbols (GOOG & GOOGL); they have a combined market cap of ~$1.6T. Does this not count?


I think the stock quotes represent the same entity. So it wont be ~850B + ~850B.


I guess I just assumed the stock data would all be per-ticker-symbol, that is, market cap on a given symbol would simply be the number of shares on that symbol times the price. But Google itself does report identical market caps, now that I look closer, and that seems unlikely.


It is an achievement in almost all facets of success. It is a perfect story of the great American dream. Most products throughout their history have been world class. Congratulations Apple and good luck for the future.


Just to give some context, the first publicly traded company to hit $1T USD market cap was Petrol China, but that was only in HK, in mainland china, its stock were never valued more than $500B. And it has only 5% of stock in HK open market.

Compare to AAPL today.

Apple still has a ridiculously low P/E of ~17. Which is how everyone values a hardware company. And has stayed within this P/E range since the death of Steve Jobs. Apple hasn't been selling more iPhone than the last super cycle aka iPhone 6, which is when the plus version was first introduced. But Apple's iPhone ASP has been up $100+, and Apple has been buying back LOTS of share, which is one of the main reason pushing its stock price upwards.

A lot of analyst likes to focus on the flat unit sales, and the higher ASP. In reality it is the user base growth that is much more important. Tim Cook mentioned a double digit percentage growth in iPhone. That puts Apple with close to 800M active iPhone users. Roughly 70M+ of iPhone users coming are either new to smartphone or switching from Android. So while Apple's iPhone sales has been flat for a few years, its iPhone user base has matched from 600M to 800M. Given the moat, or the stickiness of Apple ecosystem, users are likely going to buy another iPhone, staying within the ecosystem than going to Android.

The Mac are also adding lots of new users, 60% of Mac buyer are new to Apple. This continuous trend means Apple is adding 10M new Mac users YoY. The last reported figure there were roughly 150M active Mac users. If we look at the sales figures and Active Mac users over time, it is clear the average Mac lifecycle is now on 4 - 5 years before upgrade.

The iPad has roughly 300M, may be now closer to 400M iPad users. Again while the sales hasn't grown, its user base is growing.

Both Horace Dediu and Benedict Evans are expecting 1.5 billion Active devices by either late 2018 or mid 2019. As impossible it may seems, Apple is STILL growing its user base.

And there are few more things to fuel future growth. The rumoured of slightly cheaper iPhone and Mac. We should have a sub $700 6.1" LCD iPhone coming this September. Along with a better sub $1000 entry level MacBook. And I believe the best iPad has yet to come, still with lots of potentials.

Yes, I hate the TouchBar, Yes I absolutely hate the new bloody keyboard they put on MacBook. And I don't like FaceID much, still prefer under screen finger print. But all these aside, Apple is still doing extremely well, and its bigger picture is good with no immediate risk at its current valuation. Cant say the same for Microsoft, Google, or Amazon. And they have just finish moving into its new Spaceship. There are lots of mental preparation and inefficiency involved when moving to a whole campus. I hope they are now settle and up their productivity.

To sum it up, with a P/E less then 20, and the most Net Cash ( ~$130B ) any company has in the world, they are truly worth their $1T Market Cap.

Congrats AAPL.

P.S - Steve probably would have sent another note to all employees about Dell. :P


My grandparents bought and still own Apple stock from their IPO. Seems like good news for them.


That's great. Companies need to start IPOing earlier again.

http://blog.pmarca.com/2013/03/26/unshackle-the-middle-class...


Samsung is making much more Operating Income than AAPL. Why their market cap is so low?


Market cap is based on a half-dozen factors, but primarily a factor of

- assets (e.g., cash on hand and other things that can be converted to cash),

-Operating Income, and

- growth -- meaning how quickly the annual operating income can grow (my guess is Samsung's growth is lower than Apple's)


Not yet

https://twitter.com/ampressman/status/1025033219803103232

$AAPL needs to be $207.0425 to be $1T company


This one is actually correct. It tapped the $207.05 value briefly - see "Today's High" at https://www.nasdaq.com/symbol/aapl. That tweet is from a previous time earlier today, just after the markets opened.


Who's "beleaguered" now?


Psst! That's an arbitrary number.


Avoided the most taxes in history too!


Apple is also the largest tax payer also?

(according to Apple!)

https://www.apple.com/ca/newsroom/2017/11/the-facts-about-ap...


So the mere mortals should be thankful for the little Apple gives them, right? Small businesses competing with Apple should be just fine as well I guess even if they don't have the same tax advantage.


The issues are orthogonal.


It's legal to find ways to reduce your tax burden.


>> It's legal to find ways to reduce your tax burden.

Many things are legal. This doesn't mean they shouldn't be illegal. Artificially changing the place where taxes are paid is one of the things that Apple is doing and should be illegal.

Companies like Apple not only use the system but they support it as well. If you want to fix the tax evading think that you will have to fight against Apple along with many other big corp and on top of that with all kind of rich, shady individuals.


Large companies spend millions lobbying to keep it that way. It's not a accident that it's legal. They're not just innocently taking advantage of loopholes that just happen to be there. They help create them and keep then that way at the normal tax payers expense.


the tax system should be made simpler... no loopholes (I know it is probably not easy to accomplish, but worth a try) ... because middle class can't afford to avoid taxes like the rich does it.


That's simply not possible. The IRS themselves state that "tax evasion" is illegal, but "tax avoidance" isn't. A "loophole" is the use of deductibles to lower the amount you pay in taxes, that you choose to try to get.

For example, you could get lower taxes by "getting married", even if you're just friends you can get lower tax rates, etc. That's a "loophole". Are we supposed to prove they "really wanted to get married"? Now apply that to potentially all deductables.....


>>For example, you could get lower taxes by "getting married", even if you're just friends you can get lower tax rates, etc. That's a "loophole". Are we supposed to prove they "really wanted to get married"? Now apply that to potentially all deductables.....

Ha ha ... What about a trillion dollar company paying less than 0.9% tax in countries where tax is minimum 13-19% ? Are we supposed to prove they really tried to evade tax? Or companies not paying any tax at all by siphoning profits through fictive loans in places where they pay little or no tax?

I'm not sure if you get this but the issue is not about someone getting married to get lower taxes(even though that would be illegal just like married someone to get permanent residency is illegal).

https://www.theguardian.com/business/2014/nov/05/-sp-luxembo...


We both agree on the problem that they should be paying more. I suggest that fixing "loopholes" isn't the solution, and instead may consider a "hard-minimum" for multi-billion dollar companies. No deductions beyond x%.


I knew that my opinion would not be popular here as most users are pro corporate... but either way, your definition of loophole is wrong


We both agree on the problem that they should be paying more. I suggest that fixing "loopholes" isn't the solution, and instead may consider a "hard-minimum" for multi-billion dollar companies. No deductions beyond x%.

Deductions do have a use, they may encourage them to "go green" or whatever. But yeah there needs to be an actual minimum.


because they're utilizing that money so well.


It's their money. If they have a $1 trillion cash sitting on the sidelines doing nothing that is their right to do so.

Apple doesn't make money to support governments.


ultimately it's in their best interest to do so. a legitimate government with sane laws is a lot more lucrative for businesses long term than an authoritative one


> Apple doesn't make money to support governments.

Sure, but governments do support Apple and its employees.


And Apple pays all of the taxes that they are legally required to, and so Apple is supporting the governments it interacts with.

Implying otherwise is dishonest and ridiculous.


Large companies spend millions lobbying to keep it that way. It's not a accident that it's legal. They're not just innocently taking advantage of loopholes that just happen to be there. They help create them and keep then that way at the normal tax payers expense.


> Apple doesn't make money to support governments.

Apple doesn't make money to support society and pay for the social infrastructure it uses to help it be successful.

FTFY


IT takes two to tango, the Irish government was ordered by the E.U. to pick up those ten billion or so of taxes but they didn't think it would be the thing to do and didn't demand what was rightfully theirs.


Except, you know, all the sales tax collected in their retail channels. And employment taxes on their 80,000 domestic employees. And property taxes. And real-estate fees. And government testing. And the obscene amounts of duties they pay importing every single thing they make.

That's just for the U.S., in every other country they do business those apply as well (with exception of perhaps the import duties for business done in China).


> Apple Inc., which is based in California, set up two companies in Ireland: Apple Sales International and Apple Operations Europe. According to the European Commission, these companies had no employees or real offices but still realized large profits. Apple paid virtually no tax to Ireland, or to any country, on these profits because of a former law in Ireland. In the last year that the law was in effect, 2015, Apple Sales International paid just 0.005% tax, according to the commission.

> When Apple sold iPhones, iPads, and Macs in an EU single-market nation, such as France, the commission said Apple would funnel the profits from France to Ireland and would not pay tax in either country.


That's tax they might generate, but most of that is not tax paid by Apple. Consumers pay sales tax and duties go right into the price of the products, employees pay income tax...


>That's tax they might generate,

It's tax that would not have been paid if Apple did not exist.

>and duties go right into the price of the products,

And if the government said "Apple must now pay 50% on every dollar they make" guess what would go right into the price of the products...

>employees pay income tax.

Business owners must pay the federal government 6.2% of every dollar their worker makes until that annual salary reaches $113,700.

Then 1.45% of all pay regardless of how high it goes for medicare.

And unemployment insurance in whatever state.


>It's tax that would not have been paid if Apple did not exist.

You can credit Apple with generating those taxes, but they don't get credit for paying that tax on their profits.

>"Apple must now pay 50% on every dollar they make" guess what would go right into the price of the products...

Yes, Apple's prices would go up to compensate, and consumers would be footing the bill.

>Business owners must pay the federal government 6.2% of every dollar their worker makes ...

Business owners must collect that amount, so my pay is reduced by that amount - I am paying that tax, the employer is just the tax man's agent.


You can also credit Apple for the companies that will never see the light because Apple had the tax advantage(not to mention some of its abusive practices towards competition/little guy)


>You can also credit Apple for the companies that will never see the light because Apple had the tax advantage(not to mention some of its abusive practices towards competition/little guy)

You can also credit Apple for the countless iOS developers that have made anywhere from a living to a fortune, that have all paid taxes on their earnings, that have also created likely hundreds of thousands of jobs for everything from customer support to developers inside those iOS development companies, all of which have had income and thus paid taxes, directly as a result of Apple existing.


Because the little guy could have created an operating system, a global supply chain, designed thier own processors, etc. if it wasn’t because of Apple?


The tax deal Apple made with Ireland between 1991 and 2015 allowed them to avoid tax on almost all profits across the EU, booking the profits in Ireland rather than the country of sale and paying less than 1% corporation tax (0.005% in 2014). Given that most of their tech stack comes from publicly funded research, the system is clearly broken.


  Given that most of their tech stack comes from
   publicly funded research, the system is clearly broken.
You're right, no research should be publicly funded


Public funding is needed for any research with long timescales and no quick route to monetisation. It has given you and Apple, for example, the internet, the world-wide-web, GPS and touch-screen displays.


Probably lifted thousands of people out of poverty!


Are those things mutually exclusive? Apple is sitting on hundreds of billions in cash. They could literally make a million people rich just by gifting the money. But they don't.


yeah probably chinese iphone makers. (not americans)


so poor people outside america don't count as people?

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