Apple Just Keeps Rising

Even though Exxon Mobil regained the title as the world’s most valuable company last week, Apple briefly grabbed the number one spot.  The ranking is determined by stock market capitalization, or the total market value of all a company’s outstanding shares.  After trading on August 9th, Apple’s market cap closed at $347 billion.  The tech colossus might take over the top spot again soon.

In my opinion, the behemoth Apple will continue to grow as Smartphones become more popular.  Perhaps most significant is what this growth represents--the high-tech, digital world is becoming the giant of the global economy.  Just a mere 14 years ago, Apple sat on the brink of bankruptcy, with a record-low stock price and crippling financial losses.  Since then, Apple has made a strong resurgence, introducing MacBooks, iPods, iPhones, iTouches, iPads, the iTunes store, and Apple TV to the consumer technology market.  Indeed, Apple has found a niche as the world’s leading provider of consumer technology, leapfrogging business-oriented competitors Microsoft, IBM, and Hewlett-Packard.  Last month, the firm announced that its profits have more than doubled to $7.3 billion while revenues rose 82% to $28.6 billion.   

The growth Apple has experienced in the past 2 years is a testament to the expansive influence the tech market has had on the overall economy.  Apple sold more in the last quarter than it did in all of fiscal 2007.  It’s return on equity, which measures a firm’s amount of net income as a percentage of shareholder’s equity, is nearly twice what is was in 2006.  Some analysts believe it has the potential to be the first $1 trillion company in existence.  

Sure, oil and energy demands are more important than iPhones.  Transportation and all the other conveniences that natural gas and oil provide outweigh the fun, entertaining gadgets Apple keeps producing.  However, as globalization forces many individuals into sprawling urban environments, it’s conceivable that mobile devices could be viewed as more important than cars.      

One serious challenge that still looms for Apple is the health of Steve Jobs, who has been on a medical leave of absence since January.