It’s no surprise that Apple has a wealth of disposable income on its balance sheets, but perhaps what might come as a shock is the sheer amount of cash the company has and what it means it could purchase without breaking a sweat. Apple made history this week as the first company in the US…
It’s no surprise that Apple has a wealth of disposable income on its balance sheets, but perhaps what might come as a shock is the sheer amount of cash the company has and what it means it could purchase without breaking a sweat.
Apple made history this week as the first company in the US to be valued at $1 trillion as its market cap was increased. It’s not only the overall valuation of the company that is staggering, Apple also currently is sitting on a cash pile of around $285 billion (Rs 19.54 lakh crore). Yes, that’s billion, with a ‘b’. To put that into perspective, that’s enough to buy the two most valuable companies in India. Apple, with its free cash flow, could buy Reliance Industries – the same company making waves in the telecom and cable industry – as well as Tata-owned TCS. Business Today reports that market cap of RIL, India’s largest company in terms of revenue, as of today was at Rs 7.45 lakh crore ($109 bn) and valuation of India’s largest IT services firm TCS was Rs 7.57 lakh crore ($109 bn). That means combined, Apple could purchase both companies and still be left with $67 billion (Rs 1.5 lakh crore).
The increase in market cap comes after Tim Cook released its quarterly figures, calling it the best June quarter ever and marks Apple’s fourth consecutive quarter of double-digit revenue growth. The news was unsurprisingly enough to boost the company’s stock price and push it past the $1 trillion mark.
The company has come a long way since it was first listed on the stock market for $22 a share on December 12,1980. If you owned Apple stock when it first appeared, you’d have enjoyed a 40,000 percent profit – quite the return rate!
Looking back at Apple’s rise to success – the company was valued at only $3 billion when Steve Jobs made a return to the company following its acquisition of his startup NeXT. The company launched the first iPod, followed by the iPhone in 2007, and the iPad in 2010, each marking a fundamental step for Apple and in most cases creating a market for the device.
The first company to hit a $1 trillion market cap wasn’t actually Apple. It happened to a company called PetroChina in 2007 but the valuation was short lived and it nose-dived in 2008 ending up at $260 billion. Also, the valuation of Saudi Aramco, which is the state-owned oil company, is valued at around $2 trillion, making it around twice as valuable as Apple.
Unlike PetroChina, Apple shows no signs of slowing down but investors will now be looking for Apple’s plan to mix things up. Apple is no longer enjoying the market dominance that it once saw across its product lines and face fierce competition from the likes of Samsung and Google. Investors will now be looking to Apple for its ‘what’s next’ plan and for the next radical shakeup of its existing products or an entirely new product. The biggest change seen in the iPhone design was the iPhone X where the company simply removed the bezels that only aligned it with the competitors in the market. That will make investors nervous as Apple is no longer pioneering ideas and being first to market, with some arguing Apple products have become rather static.
It’s hard to know what Apple has in the pipeline as its R&D department is extremely secretive and often leaks only extend to the immediate next product it is working on only a few months out. Apple is a far cry away from becoming a Nokia or a BlackBerry who rested on their success and were greeted with market decline, but certainly, for continued success, we need to see something different from Apple and soon to see the company continue its upward growth.
