Schwarz: Forget Microsoft, Apple’s market cap certainly will end up crushing Exxon’s

TiVo Premiere - Free Shipping“The key takeaway from this Apple earnings report is that seasonality no longer exists for the company,” Jason Schwarz writes for TheStreet.com. “By selling 8.75 million iPhones at the beginning of the year (131% growth), Apple has entered new territory.”

“The fact that this company’s hottest product is an iPhone that needs to be replaced every 18 to 24 months is a fact that not many analysts have noticed,” Schwarz writes. “I realized it when Steve Jobs spent a few minutes at the iPad event explaining that Apple was now the world’s No. 1 mobile device company. What does this really mean? It means that the life cycle of products is no longer seven years like it was for the Mac.”

“The Apple story is all about this shorter cycle of mobile device replacement combined with consumer loyalty,” Schwarz writes. “Never before have we had a mobile device company command loyalty like Apple.”

Schwarz writes, “We’re living in the middle of a technological revolution and Apple certainly will end up crushing the market cap of Exxon.”

Full article here.

MacDailyNews Note: Currently, the top five U.S. publicly-traded companies’ market caps are:
1. Exxon Mobil (XOM) – $326.05B
2. Microsoft (MSFT) – $275.04B
3. Apple (AAPL) – $234.23B
4. Wal-Mart (WMT) – $204.19B
5. General Electric (GE) – $202.39B

[Thanks to MacDailyNews Reader “Jersey_Trader” for the heads up.]

24 Comments

  1. “The key takeaway from this Apple earnings report is that seasonality no longer exists for the company”

    I like Schwarz’s thinking generally, but when we see this year’s Xmas season, I think he’ll be proven wrong on this point.

  2. I don’t agree with this statement: “The fact that this company’s hottest product is an iPhone that needs to be replaced every 18 to 24 months is a fact that not many analysts have noticed”

    Techheads might replace their iPhone every one to two years but most people will keep them till the wheels fall off. Apple is simply growing its marketshare at this point not continually getting repeat customers.

    Besides, in the U.S. at least, you get killed if you replace your cell phone before the two year contract is up.

  3. @Synthmeister
    What you are not taking in to account is that the new iPhone 4.0 will not run on anything less than a 3G iPhone, and even then, it will not support multitasking. Nope, I think this commentary is spot on. I don’t see a lot of folks hanging on to there frist generation iPhone when the 4G arrives this summer. You can count on that.

    Think about it, you can’t even buy a decent case for a 1G iPhone.

  4. Did you all notice that not a word was spoken or asked about the purpose or state of the billion dollar server farm that is most likely up and running at this time.

    Is Apple’s next market cloud computing or a cloud DVR or … A billion dollar asset and it was not even mentioned or asked about. Yes, we will know when Steve does another “Just one more thing” only because curiosity and insight of the talking heads seems to be dead. Or they are just clueless about what Apple is doing.

    Ok, clueless it is!

  5. The life cycle of a mobile phone is indeed 24 months. Vast majority of US mobile users are in two-year contracts, with fairly heavily subsidised handsets (on the average, $200 for dumb phones, $250 for the smart ones, with the exception of Apple, where the subsidy is around $400, based on the ASP — Average Selling Price — of $600, as reported yesterday). Most consumers take advantage of the offer to replace their handsets once the contract is up with a new one (and renew the contract). While there may be some who choose to not get ‘locked in’ and don’t renew, most actually do (why keep paying subsidy if you have already paid off your old phone?).

    So, no; most people will NOT keep their old iPhone ‘until the wheels fall off’; they’ll gladly replace it as soon as they become eligible for the new one. They’ll give the old one to their kids, friends, overseas relatives, or unload it on eBay.

    In a worst recession since the Great Depression (anyone still alive from that one), Apple has continued to break all-time records, quarter after quarter.

    Payback is a female of a dog…

  6. @Synthmeister
    I have to disagree AT&T;allows an upgrade every 18 months, and it’s not just Tech Heads that wish to have the latest features on their phone. Apple is continuously upgrading the UI. Other make like Blackberry and the Nokia family generally are not. As for the Android family, improving your tech specs does not necessarily lead to an improved UI. On this site I constantly see posters ready to upgrade their 1G or 2 G IPhones.

    Those with 2G IPhones that got them in the first upgrade cycle in 7/2008 are eligible to upgrade this month. Many families with multiple IPhones will add a new iteration and pass the old ones off to the kids, a sibling or a grand parent. I gave my 1G IPhone to my sister (a long time Sprint /Nextel sufferer). She soon found she could not live without it despite having cracked the glass and using it for over a year in that condition. It eventually died and she had failed to back it up so she immediately went and got a new 3GS.

  7. It looks like as AAPL goes past about $303 a share (or sooner), Microsoft will drop to 3rd as Apple becomes 2nd. Will we get to see some video of Steve Ballmer when he finds out? I hope so. He is fun to watch when he looses it.

    Microsoft’s value will start dropping as Apple rises and takes over their market share!

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.