An apple a day keeps the doctor away; and the recession too – if you’re one of its valued STAKEHOLDERS. Of course, not the orchard apples that I am speaking over here; but the performance of the Apple Inc from US which has just toppled oil giant Exxon Mobil from the numero uno position to become the most valuable company from America.
Amid wild gyrations on the NASDAQ today, at one point, the share price of the consumer electronics giant surged to the highs of $369.89, placing the company’s market capitalistion at $342.9 billion, ahead of former front runner Exxon Mobil, briefly. However, the latter regained its lost position on a sharp bounce back by the end of the trade.
But, that does not count for much – as we can say that the lion has tasted the blood, and it could only be a matter of time before a final kill is made by Apple to reign on top of the world. With the fears of likely double-dip recession in the US and crude oil prices dropping below $80 a barrel, it is but obvious that the market capital of the energy guzzler, Exxon Mobil, is likely to slip below that of Apple, soon.
Moreover, Apple’s growth story also sidelines theoretical conventional wisdom that large companies can not grow exponentially unless the industry in which they operate grows exponentially. The iPhone and iPad maker has been credited with a surge in its sales by 80% a year, and profits even faster.
If reports are to be believed, Apple Inc’s $76.2 billion worth of cash and marketable securities at the end of June was more than that of the world’s largest independent government at $73.76 billion reserves, just before the US debt-ceiling was raised recently.
Yet, these positive proponents do not render the valuations of the gadget maker expensive, as the company trades roughly in line with the growing US market, at 11 times estimated earnings for the fiscal year ending Sept 2012 and less than half the PE multiple it fetched five years back.
Having said above, the share price momentum of the Apple Inc, on the bourses, has been no less than spectacular as compared to the performance of yellow shining metal, Gold – both of which are up about 45% over the last year, far outpacing other asset classes including equity markets, globally.
Recently, the Apple phones, with a market share of 18.5% globally, ended Nokia’s 15-year reign at the top of the global smartphone market. Apple more than doubled its shipments to 20.3 million for the quarter, up from just 8.4 million a year ago. Nokia’s smartphone sales have received a jolt since its future smartphones will run on MS Windows phone instead of its own Symbian OS.
Furthermore, technology analysts believe that the next big mandate for the world’s largest technology company will be to make its gadgets more and more unified, whittling down to few devices with maximum storage, functionality and portability features; as the death of dedicated devices is bound to happen gradually.
Are you an Apple fan like me? Just one regret – Apple’s iPhone hasn’t picked up as smartly in India as overseas. Hopefully, the gap will be bridged soon.