Apple’s record of becoming the first private-sector company to surpass $1 trillion in market value is significant because of its resonance beyond the financial universe (Josh Edelson)
New York (AFP) – Apple, the culture-changing company behind the iPod, iPhone and iPad, hit another milestone on Thursday, becoming the first private-sector company to surpass $1 trillion in market value.
Shares of Apple broke through $207.05 in late-morning trading on Wall Street, two days after the California technology firm reported strong quarterly earnings.
The landmark is the latest victory for Tim Cook, who faced skepticism when he took over as chief executive in 2011 from ailing iconic co-founder Steve Jobs.
Jobs, who founded Apple in a Silicon Valley garage in 1976 with Steve Wozniak and built it into a global powerhouse, died in October 2011.
After the death of master pitchman Jobs, analysts and other industry watchers wondered whether the company would lose its magic for creating “the next big thing.”
But Cook has gradually won accolades from investors by pumping out a series of solid financial results and spreading Apple’s products to China and other foreign markets.
As with other landmarks — such as the Dow crossing 25,000 points for the first time — the Apple record is significant because of its resonance beyond the financial universe.
“The $1 trillion mark is more psychological, and sends a message of growth and size into the market,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
Many financial insiders, however, view the record as a non-event, despite breaching the psychological barrier.
“There’s no real excitement on the trading desk,” said Karl Haeling of LBBW. “It’s one of those things that does not mean anything by itself… it’s more a testimony of the importance of Apple on the market.”
– Focus on digital content –
Cook has put a focus on digital content and services, positioning Apple to make money from music, movies, apps, subscriptions and more sold to the vast “install base” of people using devices made by the company.
Apple is in the unique situation of controlling the hardware and software in its mobile devices, with content for users required to go through its App Store that takes a percentage of revenue.
On Tuesday, Apple reported that net profit jumped more than 30 percent to $11.5 billion.
Revenue in the fiscal third quarter soared 17 percent to $53.3 billion from the same period a year earlier due to sales of pricier iPhones, online services and wearable devices.
Apple’s valuation also cements the continued supremacy of US technology companies in the broader market, with Amazon, Google-parent Alphabet, Microsoft and Facebook regularly rounding out the top five.
Apple is the first private sector company to reach this level. State oil company PetroChina briefly broke the $1 trillion barrier in 2007 during its initial public offering, but has since dropped back down.
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