Apple: $710 billion and counting

“On the day Apple Inc. became the first U.S. company to close with a market capitalization above $700 billion, Chief Executive Tim Cook credited its success to its ability to sell pricey products to Chinese consumers and ignore commonly accepted beliefs about big companies,” Daisuke Wakabayashi reports for The Wall Street Journal.

“Mr. Cook said Tuesday that Apple has grown rapidly in China by disregarding conventional wisdom that Chinese consumers were too price-sensitive for Apple’s high-end products,” Wakabayashi reports. “‘It’s a bunch of bull. It’s not true,’ he said at the Goldman Sachs Technology and Internet conference in San Francisco.”

“Mr. Cook said rapid economic growth in China and the rise of a large middle class there gave Apple a major opportunity,” Wakabayashi reports. “Mr. Cook also said he didn’t believe in the ‘law of large numbers’ — the idea that growth rates slow as companies get bigger. He rejected it as ‘dogma.’ Apple’s shares rose 1.9% Tuesday to $122.02, giving it a stock-market value of $710.7 billion.”

Read more in the full article here.

Related article:
Apple hits new all-time high, becomes first $700 billion company – February 10, 2015

6 Comments

  1. I never understood the claim that Chinese would not pay the premium for an iPhone. Anyone who has been to China for business knows that the Chinese are extremely status-conscious and will pay the premium for a product with the cachet of the iPhone. The last time I was in China for business everyone I dealt with, from the driver to the owner of the company had an iPhone.

    1. Yes, this was my experience there as well. While it’s true that their per-capita income is much lower, they choose to save and buy status (and, I should add, quality) items.

      Conventional wisdom will only get you a conventional life/results/economic return.

    2. By the same token, in India there is also a very large number of people who are aspirational and keen to buy products that enhance their status.

      Currently the Indian market is not particularly significant for Apple, but it has the potential for spectacular growth.

      Having worked both in India and Chine, the impression that I got was that Indians prefer to ostentatiously display their wealth more than the Chinese do, so this could work well for Apple.

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