February 1, 2012 | In: Opinion
Apple Becomes the Most Valuable Company
Last week, I have published a list of the top 100 companies listed in the US markets by market capitalization. The list had Exxon on the top, and Apple below it, there was a difference of only $5 billion between the two companies. I said back then that Apple might be able to fill the gap within a few weeks, or even within a few days. Well, I was right. A few days after, Apple dethroned Exxon to become the most valuable company in the US markets (but not the world though, there are non-listed companies such as Aramco that are worth trillions). AAPL is currently trading at $456.61 (for a total market cap of $425.97 billion) while XOM is currently trading at $84.24 (for a total market cap of $397.42 billion). In just a few days, Apple managed to top Exxon by nearly $30 billion!
But, how long can Apple hold this position for?
Well, there are a few things to watch for:
- The oil price, which may go up to $150 if something bad, really bad happens in the Middle East. We all know that oil price is directly proportional to XOM’s price.
- Apple’s current quarter results, which will be nowhere near as good as last quarter’s results. Last quarter’s results were great because Apple struck new deals with 3 new wireless companies, and it benefited from a very hot holiday season. I doubt that these new deals will have the same effect on Apple as they did in the last quarter.
- Android phones and pads are eating more and more market share from Apple.
- Apple missed the clients’ expectations with the release of the iPhone 4S instead of the iPhone 5. However, the clients apparently were oblivious to this fact (probably because of drinking the Apple kool-aid) because they haven’t noticed that Apple didn’t deliver anything new in its new phone, it just changed the name and inflated the price. I doubt that Apple’s clients will be as stupid as they were when they swallowed the release of the iPhone 4S as a great achievement when Apple releases another copy-cat of the iPhone 4 and brands it as iPhone 5 (or maybe iPhone 4 SII, as in Samsung Galaxy SII).
While #1 in the above list might happen, #2 is bound to happen. Apple just can’t meet the investors’ expectations this quarter. It really did set the bar high, very high in its current results. #3 and #4 are already happening, it’ll just take some time for the mass media to notice (the mass media will only notice when large investors dump their shares in Apple, which will happen right before the release of this quarter’s results).
Does Apple deserve this position?
For many Apple fans, the answer is a definitive yes. For me, the answer is a definitive no. Apple is doing nothing to the well-being of the American economy – in fact, Apple is sucking money from the US and pumping money into China. It is also filling the (very deep) pockets of its executives and shareholders. Everytime someone buys an Apple or an iPad, he’s contributing to the continuity of slave labor and nothing to his own economy. Although Exxon is an oil company (and we all know that oil companies are usually associated with greed), Exxon does create a lot of high paying opportunities for Americans inside and outside the US. Exxon prioritizes American labor over any other labor, and doesn’t search for cheap labor to maximize profitability and artificially pump the value of its shares. That’s a company that everyone should respect, as opposed to a company that creates high-priced phones manufactured by people who commit suicide because of poor working conditions. Gordon Gecko said “Greed is good” – probably that should be Apple’s motto from now on.
Congratulations Apple! This is the first time that you became the #1 company in the US based on market capitalization. You have fought hard for this and now you’ve won! But don’t enjoy it – because we all know that you cheated all the way to the top and that it will not last for long!
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