It’s a question of when and not if, Apple will become a $1 trillion dollar company. In Australian dollars, Apple have already achieved that – their Market Cap is at USD 776.45 billion on the NASDAQ which is tipping over the AUD $1 trillion mark already.
Experts predict Apple will reach USD $1 trillion within the next 3 or 4 years at most.
Without a doubt, Apple is truly a phenomenon and one of the most valuable companies in history. Their main source of revenue come from their iOS platform which services nearly all of their products including the iPhone, which sold 1.2 billion units in its first 10 years. This easily makes it the “most successful product of all-time” – no other product in commercial history has even come close.
Apple has also successfully spawned other categories like the iPad, iPod Touch, Apple TV and the Apple Watch. It currently has AUD $346 billion cash in the bank, and to put that figure into perspective, that’s enough money to buy the CBA, Westpac and BHP entirely.
Apple’s cash is about 20 times the value of Twitter and 10 times the market value of Snapchat. If the spare cash were its own company, it would be the 11th largest firm in the S&P 500.
With this much money in reserve, its likely a huge acquisition may be on the cards that will expand the Apple empire beyond gadgets. So far experts are guessing possible targets such as Netflix or Tesla Motors given its recent work on self-driving cars.
And its likely Apple will need to make a mega-deal purchase, as analysts believe that Apple will need to lessen the company’s dependence on the iPhone sales at a time when smartphone sales are slowing down.
But customer loyalty and retention, which Apple is good at, is a key driver for their products. The 2017 Customer Loyalty Engagement Index, a report put together by research consultancy firm Brand Keys, puts Apple at the forefront of customer loyalty and enjoyment in the technology category.
As Brand Keys points out, this is impressive given that customer expectations of products are rising dramatically.
And despite the initial outrage over Apple’s decision to remove the headphone jack, the iPhone 7 was still the top-selling phone in Australia in the three months ending October last year.
So it seems even when Apple get rid of the things we are accustomed to like the headphone jack, they still have a win-win situation.
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Disclaimer: This publication has been prepared for general information purposes only. It is not specific advice to any particular person. You should consult an authorised Align Financial adviser before making financial decisions.
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