On August 2, 2018, Apple made history by becoming the first publicly traded US company with a market capitalization of $1 trillion.In August 2020, the company broke new records by becoming the first US company to reach a market capitalization of $2 trillion.appel (AAPL) fluctuated just below this level at the beginning of October 2020.
Since 2010, Apple has been one of the most valuable companies in the world.It remained at or near the top for many years after that.The reason Apple is valued so highly is superficially simple: the company makes popular products with generous margins. However, a curious reader who digs a little deeper will discover mistakes, toppled CEOs, and more. In this article we will look at the story behind Apple's success.
Key learning points
- Steve Jobs and Steve Wozniak founded Apple in 1977, where they first introduced the Apple I and then the Apple II.
- Apple went public in 1980, but Jobs eventually left, only to make a triumphant return a few years later.
- Apple's success lies in a strategic vision that went beyond simple desktop computers to include mobile devices and wearables.
- Both performance and design are key drivers of the Apple brand and its continued success.
From Apple I to Steve Jobs 2.0
To understand why Apple became so successful, we need to look back at its origins and history. From the first Apple computer (the Apple I, which was just a motherboard with no screen or keyboard) to the latest iWatch, here's a quick look at the chronology of Apple's innovative products.
Founded by Steve Jobs and Steve Wozniak, Apple got its start in the kit computer business with the Apple I.This first production is popular as acollectiblenow. However, it will be remembered mainly for helping the company raise enough capital to build the Apple II in 1977 - the same year Apple was officially founded.Wozniak primarily built both computers, and Jobs handled the marketing side.
The Apple II drove the company's sales until the mid-1980s, even though the hardware remained largely the same. Apple tried updates such as the Apple III and Apple Lisa, but these were commercially unsuccessful. Although the Apple II continued to be sold, Apple as a company ran into trouble as the 1980s began.
The release of the Macintosh in 1984 was a leap forward for Apple. But in the intervening years between the Apple II and the Macintosh, IBM had caught up. Disappointing Macintosh revenues and internal struggles for control led Apple's board to fire Jobs in favor of John Sculley (some sources say Jobs decided to leave).
At leastJobs worked at NeXT Inc.after leaving Apple. Under Sculley, Apple began expanding its product lines.
Sculley was CEO of Apple until 1993.During these years, Apple experienced strong growth. It spawned new products including laser printers, Macintosh Portable, PowerBooks, Newton and more. Apple products continued to sell at a higher price, so margins were generous for Apple and led to strong financial results. However, during the same period there were cheaper computers with Windows that earned much moreIntermediate market, while Windows also benefited from powerful Intel processors. By comparison, Apple seemed to be slowing down.
Two CEOs, Michael Spindler and Gil Amelio, have failed to stem the relentless proliferation of systems running Microsoft operating systems.Microsoft's new operating system, Windows, became the industry standard and the Apple Macintosh began to show signs of age. Amelio ultimately wanted to solve some of these problems through NeXT Inc. – the company run by none other thanApple founder Steve Jobs.
The CEO of the Second Chance
From the Macintosh on, Apple has been a reflection or response to Steve Jobs. With the Macintosh, Apple attempted to create a machine that made computing simple and comfortable. Jobs in particular wanted to create a user experience that would convince anyone to buy a Mac.
Jobs believed that a truly revolutionary product could not depend on the needs and wants of customers. He believed that customers could not understand the value of a product until they actually used it. Unfortunately, Jobs was ahead of his time in 1985, exactly twelve years ahead.
By the time Jobs toppled Amelio and took back the reins of Apple in 1997, hardware had overtaken his vision of all things digital. He launched the iMac with a strong marketing campaign with the slogan "Think Different". While Jobs often gets credit for spending money and time on marketing, marketing and branding have always been excellentthe key to Apple's growth. The real difference between the iMac and all previous products was the beauty and design.
It wasno tower and screen arrangementjust like all other PCs on the market. The iMac looked almost like a racing helmet photographed at high speed, with a colorful blur sweeping back from the screen. In 1998, the iMac was the most aesthetically pleasing machine on the market. It was the computer no one knew they wanted until they saw it. It was elegant and the OS upgrade made it easy to use.
iEkosystemet
The iMac was just the beginning as Apple released a series of popular products that reflected its new focus on elegance and user experience. These include the iBook, iPod, iPhone, MacBook Air and iPad. It became the iPodcategory killerin MP3 players, and the iPhone launched and subsequently dominated the smartphone market. The iPad then somehow convinced millions of people that they needed another screen to consume content.
All of these devices were considered better in quality (and certainly in design) than competing products. Jobs was ruthless when it came to design and indoctrinated the entire Apple culture into the art of design.
The other point he brought back to Apple in his second term is ease of use. After a few minutes of using the steering wheel on an iPod or tapping icons on an iPad, these new forms of control became part of the simplicity that makes Apple appealing. Now, every product update from Apple is anticipated by the media and the general public, in addition to the fans the company had from the beginning.
More importantly, all these products have taken Apple to a new business model to create a tight situationecosystemof hardware, software and content. Apple didn't create iTunes as a simple program that allowed users to transfer MP3s to iPods, as was the case with many other manufacturers' offerings. Instead, the company attacked the concept of an album by breaking them down into songs that would be sold individually at a fraction of the price of the entire album.
The same process took place with software. Many popular computing functions can be performed on Apple's mobile devices using stripped-down apps – available from Apple's App Store, of course.
As the first major player in many of these markets, Apple built the stadium and determined the rules of the game. When you pay for books, movies, apps, or music on an Apple device, Apple gives you a discount. Of course, this business doesn't generate as much revenue as selling an iPhone or iPadlabellingis much more generous.
That said, it's the content you buy through Apple that drives many people to buy Apple again when their i-devices get old. So the content part of the ecosystem is paying off for Apple in the short and long term. Once you migrate to Apple for its design or simplicity, it's the integration with your content that will keep you there.
The post-jobs era
Steve Jobs died of pancreatic cancer in 2011.As CEO, Steve Jobs handed over management of the company to Tim Cook until shortly before his death.The post-Jobs era at Apple has nevertheless been a success in most respects. Apple remained the dominant technology company, both in terms of market share and share price.
Some analysts believe that without Jobs as a creative force, Apple has become purely iterative in its technology releases rather than transformative. The biggest release of the post-Jobs era is the Apple Watch. The company also created Apple TV devices and launched its accompanying streaming video-on-demand service Apple TV+.
In the absence of a breakthrough new product, Apple is heavily dependent on the iPhone production cycle for its financial success. Critics say that without Steve Jobs at the helm, Apple has lost its innovative edge in recent years and are insisting on keeping its brand afloat.sell.
The company still produced some of the best products with the most integrated ecosystem. However, the gap between Apple and competitors such as Samsung and Google was no longer as wide as it used to be. In fact, companies like Samsung have been increasingly willing to take the lead when it comes to product innovation in some categories.
Apple in the 1920s
Apple's market capitalization reached new heights in 2020 as the company achieved some successes and set new goals for the future. The company's revenue from wearable technology, such as the Apple Watch, set new records.Apple's revenue from services also rose to record levels during the 2020 crisis, including contactless payment options such asApple Paybecame more popular.
Apple also announced two big changes to the Mac in 2020.First, Apple is moving the Mac from Intel processors to its own custom-designed chips. Apple's new processors are based on those of iPhones and iPads, making them more energy efficient. The new chips have the potential to give Apple's laptops longer battery life and more processing power than PCs.
Second, Apple is changing macOS so developers can run iOS and iPadOS apps on the Mac without any changes. It will dramatically expand the number of apps available on the Mac and increase competition with PCs.
In short
Chances are you're reading this article on an Apple device or with a device near you. Maybe you do it on a MacBook Air while listening to an iPod touch and occasionally checking the latest Apple Watch for alerts from your iPhone. The reason behind that – and behind Apple's success – is that the devices are beautiful to look at and a pleasure to use. That is why the company has such a strong brand and a high stockresearch.
The marketing helps, and the media and fan frenzy never hurt. However, it is the quality of the products that determines Apple's success. Add to that the iEcosystem that makes it much easier to stick with Apple than try something new, and you have a company with what Warren Buffett calls aeconomic moat. It shouldn't be surprisingBuffett invested heavily in Apple.
