Apple hits market cap of US$1 trillion

Apple's market value topped $1 trillion and sparked a rebound in tech stocks that boosted the Nasdaq and S&P 500. VIDEO: REUTERS
Customers from Bangkok posing with their new iPhone Xs at an Apple store in Singapore in November 2017.
Customers from Bangkok posing with their new iPhone Xs at an Apple store in Singapore in November 2017.PHOTO: REUTERS

SAN FRANCISCO • Apple Inc became the first US$1 trillion (S$1.37 trillion) publicly listed US company yesterday, crowning a decade-long rise fuelled by its ubiquitous iPhone that transformed it from a niche player in personal computers into a global powerhouse spanning entertainment and communications.

The tech company's stock jumped 2.8 per cent to as high as US$207.05, bringing its gain to about 9 per cent since Tuesday when it reported June-quarter results that were above expectations and said it bought back US$20 billion of its own shares.

Started in the garage of co-founder Steve Jobs in 1976, Apple has pushed its revenue beyond the economic outputs of Portugal, New Zealand and other countries. Along the way, it has changed how consumers connect with one another and how businesses conduct daily commerce.

Apple's stock market value is greater than the combined capitalisation of ExxonMobil, Procter & Gamble and AT&T. It now accounts for 4 per cent of the S&P 500 index.

One of three founders, Mr Jobs was driven out of Apple in the mid-1980s, only to return a decade later and rescue the computer company from near bankruptcy. He launched the iPhone in 2007, dropping "Computer" from Apple's name and super-charging the cellphone industry, catching Microsoft, Intel, Samsung Electronics and Nokia off guard. That put Apple on a path to overtake ExxonMobil in 2011 as the largest US company by market value.

The Silicon Valley stalwart's stock has surged more than 50,000 per cent since its 1980 initial public offering, dwarfing the S&P 500's approximately 2,000 per cent increase during the same period.

During that time, Apple evolved from selling Mac personal computers to becoming an architect of the mobile revolution with a cult-like following.

Mr Jobs, who died in 2011, was succeeded as chief executive by Mr Tim Cook, who has doubled the company's profits but struggled to develop a new product to replicate the success of the iPhone, which has seen sales taper off in recent years.

In 2006, the year before the iPhone launch, Apple generated less than US$20 billion in sales and net profit just shy of US$2 billion. By last year, its sales had grown more than 11-fold to US$229 billion - the fourth highest in the S&P 500 - and net income had mushroomed at twice that rate to US$48.4 billion, making it the most profitable publicly listed US company.

But Apple could lose its lead to the likes of Alphabet or Amazon if it does not find a major new product or service as demand for smartphones loses steam.

REUTERS

A version of this article appeared in the print edition of The Straits Times on August 03, 2018, with the headline 'Apple hits market cap of US$1 trillion'. Print Edition | Subscribe