Apple reached a market value of two trillion dollars.
It took the company 42 years to get a market value of one trillion dollars. To double that, it only took two more years.
On August 19th, 2020, amidst a global pandemic, Apple (AAPL) became the first American company to have a market value of over two trillion dollars. A recap of how the Cupertino company got there.
The beginning
Apple was founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. Wayne quickly withdrew from the young company because he wasn’t willing to take the risk with a startup while being a father. The first computer sold by the company was the Apple I for $666.66 a unit.
Apple went on to create the Apple II and various versions of said computer. In November 1980, the Apple III hit the markets, and later that same year, Apple went to the stock market.
The IPO (initial price offering)was $22, which, split-adjusted, was just $0.39.
The company released 4.6million shares at the IPO, generating over $100 million with the IPO.
By 1981, things were running smoothly at Apple. They were among the biggest microcomputer manufactures in the world and achieved steady growth.
However, in 1985, Steve Jobs and Steve Wozniak left the company because of differences with CEO John Sculley.
The time without Steve Jobs
Jobs went on to create NeXT inc and bought up Pixar.
Over the following years, Apple lost its reputation for simplicity. In the early 90s, the California company had a massive portfolio of products that differed only little from each other and confused customers. Retail sellers often failed to display and present different computers competently.
During this time, Apple struggled, the stocks fluctuated heavily, and the company was out-competed by other computer manufacturers like IBM.
Apple announced in 1995 to start licensing the macOS and Macintosh ROMs to third-party manufacturers who made Macintosh clones to achieve a higher market share.
The return of the founder
In 1996 Apple bought NeXT inc., which brought Steve Jobs back into the company. When Jobs became the interim CEO, he immediately terminated the licensing program, and Apple’s market share fell from 10% to 3%.
However, the acquisition of NeXT inc was significant in another aspect as well. The technology that NeXT developed would become the base of Mac OS X.
In 1997 Steve Jobs announced a partnership with Microsoft. For 5-years, Microsoft committed to releasing Microsoft Office for Macintosh and also invested $150million into Apple. Another part of the deal was the settling of the long-standing dispute over potential patents infraction. While the $150 million investment was mostly symbolic, it signaled Apple’s comeback.
Over the next four years, Apple introduced iconic devices like the iMac and the iBook.
The comeback
The grand coup came in 2001. Mac OS X was introduced, and the OS that combined the reliability of Unix and the ease of use of a completely new UI is still in use until later this (2020) year. Also, Apple opened Apple retail stores across major U.S. cities and soon expanding into the world.
Additionally and possibly the most significant innovation in 2001 coming from Apple, though, was the iPod.
With 5 GB of storage capacity, it provided storage for about 1’000 songs. Not only did the iPod revolutionize the music industry, but it also boosted Apple’s financial results.
In Q1 of 2005, Apple earned $290 million, which is 34 cents per share on revenue of $3.24 billion. The previous year, the Cupertino company had made only $46million, which was 6 cents a stock with an income of $1.91billion in the same quarter.
Continuing the innovation in the music business, Apple introduced iTunes in 2003 in the US and gradually over the world. iTunes was an enormous success. In only the first 16 days, users downloaded 2 million songs.
2005 brought not only financial success but also the announcement of a transition. Apple went from Power PC processors on to Intel, and by the end of 2006, the whole product lineup was using Intel processors.
Apple continued to prosper, and in 2007 Steve Jobs revolutionized an industry once again. Apple introduced the iPhone. The device that combined an iPod, a web browser, and a phone was an instant hit.
Since 2005, Apple’s financial success was also off the charts. Three years after introducing the iPhone, in 2010, Apple’s stock market value surpassed Microsoft’s.
Rise to the top
A considerable part of the financial success was Apple’s stronghold in the smartphone and tablet market, which was going ever more important.
In 2011 Steve Jobs resigned as CEO of the company, with Tim Cook taking his place. Later that same year, Steve Jobs died due to cancer.
Although under new leadership, Apple continued to thrive. Since 2011, Apple’s stocks went from $50 to currently 467 Dollars.
$2,000,000,000,000
In 2018, the company made headlines with achieving a $1 trillion market value. Now, just two years later, the company has surpassed the $2 trillion market value, making it the first US company to reach such enormous value.
Outlook for investors
Apple’s shares have risen 60% alone this year. The steady growth of Apple, even during times of crisis, can be seen as a receipt for the iPhone manufacturer’s sustained success.
However, it is also important to note that the whole tech industry is rated extremely high at the current moment. Shares of giant tech companies are amongst the most popular ones for investors, and other companies like Microsoft and Amazon also are heading for the $2 trillion mark. Even though they are currently rated around $1.6 and $1.65 trillion, if they continue to rise, it will only be a matter of time before they cross the $2 trillion thresholds.
Investors looking to buy shares from Apple right now can expect a rise in demand in the short term. Due to the announced stock-split, share prices will come down to around $110 again. Hence, even more, people are looking to get their hands on the share.
As always, I am happy to be part of your decision-making process before investing. However, I am no financial advisor and strongly recommend researching your own before investing your money.
Stay safe
Raffael