“In August 1985, Apple Inc. was trading near $1.81, the same year Steve Jobs left the company. The year of his return in 1997, Apple was in danger of extinction, with its share price trading near $3.18 in December 1997,” Bachar Samawi writes for Seeking Alpha.
“Apple ‘s share price closed last week at $376.99, registering a market capitalization of about $350 billion, running neck-in-neck with Exxon Mobil (XOM) for the title of America’s largest company. On July 26, 2011, Apple’s shares reached a record high of $404.5, with an associated market capitalization of about $375 billion,” Samawi writes. “It seems Apple is on its way to possibly becoming America’s first $1 trillion technology company, and whoever is to dethrone Apple must have such potential.”
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Samawi writes, “For a technology company to be able to take a bite off Apple, it must overcome the same nine hurdles that Apple managed to overcome: 1- Innovation & Creativity, 2- Miniaturization, 3- Design, 4- Integration, 5- Durability, 6- Service, 7- Marketing, 8- Pricing, 9- Management. Such hurdles don’t necessarily have a fixed height; depending on how high some of them can be cleared, and as long as a balance is maintained amongst all, some of the other hurdles can be forgiving.”
“So, who will take a bite off Apple?” Samawi asks. “Google? Facebook? Twitter? Microsoft? Yahoo? IBM? These are great companies, but it is unlikely they will take a bite off Apple. As a matter of a fact, it is more likely that Apple will take a bite off them. Apple has achieved an unbeatable package (design, miniaturization, integration, innovation & creativity) that has created a massive barrier to entry for others. Its stronghold on hardware, software and content, all targeting a modern coveted lifestyle, will take years to achieve by others, while Apple will continue to pull ahead of them…”
Read more in the full article, with the nine hurdles explained in greater detail, here.
[Thanks to MacDailyNews Reader “Joe Architect” for the heads up.]
interesting article. Too bad he can’t spell the product names of the company he’s praising. LOL!
AAPL will keep it simple. A few products that no one can compete with ( margins) effectively. Its all about income ; margins. Nobody does it better than AAPL.
For those of you keeping score at home, please note that Apple stock has split 2 for 1 three times since 1987. So if you took $376.99 / $1.81 and were impressed with a whopping percentage return of 208%, you forgot to mulitply by 8 which yields 1,666% because today you have 8 times as many shares as when you started. Simply astounding!
That is 20800% !! And BTW the 8 times is already factored into the price of $1.81 back in 1987.
AAPL was $364.92 on July 15, 2011. I like that $19 growth in a month. Now we just need so see it back up over $400.
Ah yes. The good ole American edjucayshunl sistim at work there. Wanna try that math again?
Isn’t avoiding math, the primary reason Americans invented these personal computers? You manual bean-counting savage.
I would add a 10.
10. Stop Copying!
Why is it that many articles refer as ” the title of America’s largest company.” isn’t Exon and Apple the “world’s” and not just america’s largest company?
There are several larger state-owned and privately owned companies out there. Apple and Exxon-Mobile are the two publicly traded companies in the American stock markets with the biggest market capitalisation (i.e. the total value of all of their outstanding shares). Saying “the largest company in USA” is the most common way to simplify it.
There’s no way of valuing state owned companies that provides a fair metric in measurable terms. Unless it’s listed on a stock exchange you can impute whatever putative value you want on state owned entities. But that doesn’t mean they’re the largest, just that they’re state owned, that’s about all you can say about their relative market value.
I still think the world’s largest publicly traded company is the most appropriate.
It is rare that you find fundamental analysis articles about Apple— most of the articles out there are the normal link bait crap.
So, thank you very much, MDN for linking to this one, even if I don’t agree with all of it and he can’t spell, this is something very valuable that I wouldn’t have seen otherwise!
Apple has a long way to go to become a trillion dollar company. It can’t even seem to hold $400 a share and it’s still lagging way behind its median target price. Apple could still end the year at about $450 a share, but that would involve a lot of luck with the economy the way it is. I think most of the analysts are getting way ahead of themselves talking about $500 and $550 share price for Apple. Those prices look more than a year off.
One more…
10 – Momentum. Once Apple gains a new customers, most stay Apple customers. And the longer they stay Apple hardware customers, the more media and apps they buy through iTunes and App Store, the harder it is to make them switch and throw away their investment in time and money. Other tech manufacturers cannot generate as much momentum, because those brands are mostly interchangeable. If they bought a Dell, there is nothing preventing purchase of an HP next time. Same with Android phones and tablets.
For Apple, momentum includes user loyalty. Even in the bad old days of the mid-to-late 1990’s, there were still many loyal Apple customers who helped keep things going. Microsoft still has its Windows (and Office) momentum, but not the same level of “loyalty.” Windows users just need a good excuse to abandon their “personal momentum” with Microsoft and make the switch; there is no real loyalty.
Weren’t there some stock splits in there he omitted?
People, the $1.81 is split-adjusted, sheesh.
http://finance.yahoo.com/q/hp?s=AAPL&a=07&b=1&c=1985&d=07&e=31&f=1985&g=d
$2 going to $402 is a 200-fold gain or 20,000 percent.