Apple Is Now More Than Double the Size of Exxon–And Everyone Else

http://blogs.wsj.com/moneybeat/2015/02/23/apple-is-now-more-than-double-the-size-of-exxon-and-everyone-else/?mod=e2fb

by Nowyouknow • 11 years ago

45 52 11 years ago

blogs.wsj.com

hellbanner• 11 years ago

Can someone explain HN's front page algorithm? This is on the front page with 0 comments & 4 points.

olalonde• 11 years ago

https://news.ycombinator.com/item?id=1781013 although the algorithm might have changed since then. Roughly, a recent post with few points can rank higher than an old one with many points.

larrys• 11 years ago

For example I wonder if that algorithm (which I don't understand) takes into account (or has changed to take into account) the source link of the story (in this case wsj.com). Either positive or negative. (Maybe it says that already?)

josefresco• 11 years ago

In this case, size = market cap. Just thought it would be helpful to clarify which metric is being discussed.

greggman• 11 years ago

Yea, I'd probably consider size by employees and they aren't even in the top 100 there.

taylorwc• 11 years ago

Which is ironic because Apple's relatively small amount of employees enables their profitability, which in turn enables their market cap.

jhall14684• 11 years ago

Size by employees misleadingly favors retail outlets and government; just like market cap unfairly favors companies with inflated stock prices. Revenue favors companies with enormous line-item purchases (like Oil companies) and profit ratios may as well say "list of largest tech companies".

At the end of the day there's no one metric that can tell you the "size" of a company, because the term is too broad.

pbreit3• 11 years ago

Size by employees is a terrible metric. Market cap isn't perfect but it is the company's actual value after all. Revenue and profit are more imperfect, IMO.

tinkerrr3• 11 years ago

is a 30% stock jump from becoming the first trillion-dollar company

This is incorrect. The reason is share buybacks, which Apple has been aggressive with. Remember, when the price was $100 last (split adjusted), its market capitalization was $700 billion. Today, it's price is $130, but the market capitalization is not $900 billion, but only $765 billion. This is because the number of shares outstanding has gone down significantly.

In this scenario, the price and market capitalization will not increase by the same percentage. In fact, it is possible for Apple to have a very good price return with no increase in market capitalization at all (consider it generates a lot of free cash flow to buy back stock).

pcurve• 11 years ago

you are technically correct... yes. Apple can also reverse-split tomorrow 10 to 1, and no impact market cap, and you'd also be technically correct.

tinkerrr3• 11 years ago

Prices are always split adjusted, so that is meaningless. My point is, price and market cap are not related that way.

coralreef2• 11 years ago

Market cap is calculated by outstanding shares * share price. A company buying back its shares shouldn't affect the outstanding shares figure, because it already includes it.

However now that there are less publicly available shares available on the market, the share price should go up, as long as there is demand. By how much, I don't know, perhaps it ends up making Apple more valuable.

tinkerrr3• 11 years ago

When a company buys back shares, the number of outstanding shares decreases. That's the whole reason for buying back shares. See http://www.investopedia.com/articles/investing/112013/impact... for a basic introduction to share buybacks.

hahainternet• 11 years ago

Would anyone like to try and justify this as being a good thing? I don't mind some of Apple's business practices but they have now reached the stage where they cannot be competed against.

They own or completely control their entire supply chain and can undercut every competitor as well as invest 10x as much as anyone else to beat the competitors.

What a capitalist disaster.

jdswain• 11 years ago

We used to say that about Microsoft.

mikeash• 11 years ago

And we were right. Microsoft's domination of the industry severely harmed it, and eventually was only broken because the industry shifted to a completely different sector.

Any domination will eventually come to an end, but it can still do bad things in the meantime.

jakobegger• 11 years ago

They own or completely control their entire supply chain and can undercut every competitor as well as invest 10x as much as anyone else to beat the competitors.

Huh? Apple has huge margins, and they don't undercut their competitors. Lots of companies make products that are a lot cheaper than Apple's.

As for investing, doesn't Apple actually spend less money on R&D than Google or Microsoft?

glhaynes• 11 years ago

Seems a bit hyperbolic. Anti-trust laws are still in place, but I don't see anyone seriously arguing that Apple engages in widespread anti-competitive behavior, much less calling for a legal remedy.

Apple certainly is in a place that they could illegally crush competitors if they were so inclined, but the fact that they're not doing so seems to make the natural read of the situation that they've been hugely rewarded for making products that customers can't wait to spend their money on. Hardly a disaster.

freehunter2• 11 years ago

They do engage in widespread anti-competitive behavior, by making really good products that people want to buy! It really hurts their competition's ability to sell cheap plastic laptops.

All joking aside, the fact that Apple could crush anyone but has explicitly chosen not to is worthy of some amount of praise.

hereonbusiness• 11 years ago

The leadership of Apple seems still focused on dominating the "affordable status symbol" sector of IT, which I guess is something they'd want to keep doing for as long as possible because that could be a big part of why they can afford having higher margins.

I guess only time will tell what they'll do if/when that stops working, they certainly have the potential to unleash hell on their competition if they ever decide to go for market share.

jdmichal3• 11 years ago

Instead they were just illegally crushing employee wages and e-book markets.

jhall14684• 11 years ago

Actually, most of what you said is incorrect. As of not that long ago Samsung (Apple's biggest competitor in mobile) is still Apple's largest LCD supplier.

Furthermore, Apple has a ton of competition on both the mobile front (from the Android ecosystem) the computer front (from the Windows ecosystem) and the entertainment front (Spotify for iTunes, ChromeCast for AppleTV etc).

There is a TON of competition in the market, but Apple just crushes everyone on marketing.

happyscrappy• 11 years ago

It is not marketing, it is build quality and trust. Samsung spends multiples of Apple on marketing.

masklinn• 11 years ago

They own or completely control their entire supply chain

Uh? They have OK integration and supply managemnt, but they're a very far cry from controlling their entire supply chain. If it were Samsung then yes, they do pretty literally everything under the sun (and more, they have a logistics and transportation arm, I think the only thing they don't have is mining operations).

can undercut every competitor as well as invest 10x as much as anyone else to beat the competitors.

And yet they don't, they're usually undercut and the usual complaint about Apple is that their products are overpriced for what they are…

Zirro• 11 years ago

And yet there is room to grow. When Microsoft peaked, they had almost achieved a monopoly-sized market share. Apple on the other hand has managed to grow this large despite their most successful product having a minority market share. It is both impressive and just a little bit scary.

jhall14684• 11 years ago

Because MS decided virtual growth was the way forward (well... they decided it by releases shitty services and products horizontally) and Apple decided to focus almost entirely on horizontal multi-product approach to growth. The latter will always win long term.

samirunni• 11 years ago

Here's a great post on Apple's New Market: http://stratechery.com/2015/apples-new-market/

justin66• 11 years ago

I read your comment as implying that Apple's potential to swallow the world by increasing in size is scary. The other way of looking at it, if you're an Apple investor: Apple's lack of a "moat" is scary.

PinnBrain2• 11 years ago

So how does Apple navigate the Singularity? Google has more projects directed at it, some explicitly like Calico. Perhaps I'll walk into the Google uploader and drop off my Apple watch and phone.

minikites2• 11 years ago

Isn't the singularity definitionally impossible to prepare for?

Retra• 11 years ago

Nothing is true by definition.

serve_yay2• 11 years ago

Probably they navigate it by making products people pay large amounts of money for, while others wait for a thing some guy wrote in a book was gonna happen one day.

modfodder2• 11 years ago

Apple's Singularity uploader will have a more user friendly interface and "it will just work". Although you will be limited on what compression algorithm you can use (Apple will only support Apple lossless and compressed codecs) and limited in your customization options (can't change your voice module, gender identifier, username, or global age specification).

PinnBrain2• 11 years ago

I find the idea of lossless versus lossy uploading of sentience amusing.

serve_yay2• 11 years ago

No longer "beleaguered", but still doomed. :)

ChuckMcM2• 11 years ago

And it is useful to note that the previous company in this position was also a "tech" company (IBM). The point being that "big tech company" is like "big algae bloom", at some point they run out of oxygen or iron or something and die down to a much smaller size :-)

thewarrior• 11 years ago

Or maybe the Apple Car works out just in time to give us the worlds first private corporation with a multi trillion dollar valuation. ;)

cssmoo• 11 years ago

And the first class action against...

You're driving it wrong!

ChuckMcM2• 11 years ago

I can't really tell if you are being serious, but an interesting tidbit from http://www.thepeoplehistory.com/1984.html which looks at what happened in 1984 (when IBM was bigger than Exxon) was this:

   The first Apple Macintosh goes on sale

IBM pretty much "owned" the PC market (it was called the IBM PC market for a reason) and yet the first moves by a company that would later eclipse it were already visible. Always interesting to look back and see how that worked out. Fair warning though, so far it hasn't helped my forecasting ability :-)

hacknat• 11 years ago

Three decades hence, the most-valuable company is worth more than 10 times that and is a 30% stock jump from becoming the first trillion-dollar company

Completely meaningless and sort of untrue, if you're willing to take the 15 seconds it takes to get your butt over to the CPI calculator.

Apple Is Now More Than Double the Size of Exxon–And Everyone Else

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