“The race is on to become the first company with $1 trillion market capitalization. Two contenders for the crown are Apple and Amazon,” Peter Cohan writes for Forbes. “Since Apple has a mere $255 billion to go, it will beat Amazon to the crown by a year — getting there by 2019.”
“But Amazon stock — which has been rising at nearly 42% a year — will get you richer much faster than Apple,” Cohan writes. ” (I have no financial interest in the stocks mentioned here).”
“To its credit, Apple is the world’s most valuable company. Its market capitalization of $755 billion is indeed impressive. But that value rests on a foundation of relatively tepid growth,” Cohan writes. “Amazon lags Apple in profitability but its revenues rose at nearly three times Apple’s growth rate and its stock has appreciated far more swiftly. Amazon’s market capitalization is only $418 billion — but it came with faster growth.”
“Bezos’s investment in new capabilities for Amazon — expanding it from a maker of Internet-store front for selling books to a powerhouse in supply chain and logistics, cloud services, and content production gives me confidence that the company will keep growing much faster than Apple,” Cohan writes. “After all Tim Cook — who was hired as Steve Jobs’s supply chain master — has demonstrated an ability to squeeze a significant amount of profit from what is now the decade-old iPhone that Jobs created. But Apple has not been able to come up with a new source of sufficient revenue to offset the maturing of the smartphone market with its roughly 1,000 rivals.
Read more in the full article here.
MacDailyNews Take: “Apple has not been able to come up with a new source of sufficient revenue?”
Puleeze.
In its fiscal 2016 ended September 24th, Apple’s Services was the company’s second largest business unit, generating $24.3 billion, and growing at 22% year over year. In Q117, Services generated $7.172 billion for YOY growth of 18%.
In the last four quarters, Apple’s Services alone have generated revenue of $25.464 billion which, if it were a separate company would place it at #108 on the Fortune 500, just ahead of something called McDonald’s (2016 revenue of $25.413 billion).
Perspective. It’s wonderful thing… when you have it.
SEE ALSO:
It’s no longer all about the iPhone; Apple’s services revenue is growing at an impressive clip – March 15, 2017
Tim Cook’s Babe Ruth moment: Calling services biz ‘Fortune 100’ over a year in advance – July 27, 2016