How Did Apple become a Trillion-Dollar Company?
How Did Apple become a Trillion-Dollar Company?
By now you must be aware already that Apple Inc. has become the first ever public company in the world to reach the supermassive $1 Trillion mark in valuation.
The company which gifted iPod, iPad, iMac and iPhone to the world started off as a computer seller founded by Steve Jobs, Steve Wozniak, and Ronald Wayne back in 1976. It took Apple 42 years to reach the historical milestone.
So, what all happened during all these years which led them from working in a garage to earning the 12 zeros? Let us see.
In 1976, Apple unveiled their first branded product offering – Apple I followed by Apple II in 1977. Apple II was the first ever personal computer for the general people. It was a revolution in terms of the power it gave into the hands of people like you and me.
Apple II was a great success and it helped Apple witness more than 900% revenue growth and net sales close to $8 million during 1977-78.
Apple’s innovative journey had just begun, they were booming with ideas. What came next were:
- The external floppy-disk drive – Apple Disk II (in 1978)
- Apple III in 1980.
- A mass storage system – ProFile hard disk (in 1981)
- Apple printers in 1982
- Lisa in 1983
Lisa or Local Integrated Software Architecture was a groundbreaking achievement in terms of the offerings Apple made to the general public. It was a personal computer which gave the users a Graphical User Interface for the first time ever.
On December 12, 1980, Apple launched their Initial Public Offering for inviting investments by the public. The IPO was a huge success, it generated more capital investments than any other company in history. More than 300 venture capitalists cashed out, reaping billions in long-term capital gains and becoming millionaires overnight.
After 3 years of the IPO, Apple was included in the list of Fortune 500 companies. At this time, they were already among the 3 largest companies which built microcomputers.
They launched Macintosh in 1984. Macintosh was again a big success and they had to stop Lisa in order to fulfill the orders for Macintosh.
Within a year of the launch of Macintosh, the visions of Steve Jobs and the then President and CEO of Apple, John Sculley had already taken different paths. Sculley wanted open architecture computers like the Apple II and Jobs wanted Apple to focus on closed architecture.
The differences led to Steve Jobs and Steve Wozniak leaving Apple in 1985. Wozniak stated in an interview that the company had “been going in the wrong direction for the last five years.”
However, the culture of innovation continued which was started by the “the two Steves.”
Apple continued to come up with innovative product ideas which resulted in Macintosh or Mac II in 1987. It was the first color Mac.
By the end of 1989, they already started working on creating portable computers. This idea of portable computers, later on, took the shape of the unprecedented ‘MacBook’ as we know it today.
Early during the 90s decade, Apple underwent many changes in the leadership. However, they kept on releasing new and improved products.
During 1996, the Chairman & CEO of Apple, Gil Amelio paved the way for the return of Steve Jobs after purchasing his software company called the NeXT.
Upon his return, Jobs stated in an interview that “The problem was that Apple stood still. Even though it invested cumulatively billions in R&D, the output has not been there. People have caught up with it, and its differentiation has eroded, in particular with respect to Microsoft.”
He also said that he believes that Apple has a future and there is a tremendous brand loyalty to the company. He said innovation is what made Apple got to its glory, and that’s how Apple could return to it.
Apple was on the verge of getting bankrupt in 1997 with their stocks trading for less than a dollar, this is when Jobs decided to play the master stroke and embrace the ‘enemy’ Microsoft.
Microsoft gave a $150 million investment lifeline to Apple. This helped Jobs initiate a new phase of innovation for the next 15 years and the rest is history.
With his marketing instincts, Jobs always made sure that everyone keeps talking about Apple products.
During the decade of 2000, the innovative minds at Apple continued to come up with cults like the iPod in 2001, the iPhone with iOS in 2007 followed by iPhone 3G in 2008, and iPhone 4 and the iPad in 2010.
In August 2011, Apple bagged the title of world’s most valued company and a few weeks later Jobs handed over the CEO position to Tim Cook.
Jobs passed away on 5 October 2011.
Apple after Jobs
Within a year of Cook becoming the CEO, Apple made another history. By August 2012, company’s stocks skyrocketed in relation to the impending launch of the iPhone 5.
It propelled the company’s value to $624 billion – highest ever value of a company back in 2012.
Cook leveraged Job’s legacy very well and made Apple become the first US company to be valued at over $700 billion in 2014.
He has capitalized on the growing popularity of the iPhone invented under Jobs’ reign to sell services tailored for more than 1.3 billion devices powered by the iOS. The latest release being the iPhone X.
Since Cook became the CEO, Apple’s stock (AAPL) value has more than quadrupled and has been on a steady rise. The revenue graph also shows a consistent growth curve.
Just before hitting the Trillion Dollar Mark
Apple released their quarterly figures on July 31, 2018. It was called “best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth” by Tim Cook.
This triggered a series of a spike in the company’s shares. The market pushed up their stock to $207.39 by August 2 when they had 4,829,926,000 shares outstanding. This made Apple hit the historical trillion dollar mark.
Apple Inc. is now worth more than the GDP of countries like Sweden, Turkey, and Saudi Arabia.
Some analysts believe that even though Apple is now valued at over 1 trillion dollars, it’s worth even more still.
What do you think?