Currently, Apple stock (AAPL) - Get Apple Inc. (AAPL) Report has the largest market cap in the US market – although Microsoft has recently joined the select $2 trillion club. The journey as a publicly-traded company was marked by historic product launches and major technological innovations throughout different economic cycles.
Today, the Apple Maven tells a bit of this success story that, on and off, has created so much value for shareholders since 1980.
- The IPO: The year that the Apple III was launched, in 1980, was also the beginning of AAPL’s journey on the stock exchange. At an IPO price of $22 (or ten cents in split-adjusted terms), Apple kicked off with a market capitalization of $1.8 billion. At the time, it was the biggest IPO since Ford, nearly two decades before. Apple debuted in the stock exchange during a year marked by the beginning of a bull market.
- Macintosh era: In 1984 the first Mac was released. At the time, it was considered a “commercial failure but with technical acclaim”, largely due to its high cost. This period was also marked by disagreements among Apple's top leaders: CEO John Sculley, hired by celebrity founder Steve Jobs at the time, and Mr. Jobs himself.
- Difficult times: From the beginning of the 1990s to mid-1997, Apple lost competitiveness in the market due to a series of internal factors. Products that lacked consumer appeal led to a sales shortfall, and Apple was allegedly 90 days away from declaring bankruptcy. The company was “saved” at the time by Microsoft, which agreed to pay $150 million to Apple in exchange for a few rights – setting Internet Explorer as the default browser on Macs, for example. Apple's market cap in 1997 was around only $2.3 billion, barely higher than it had been on the IPO day.
- Prices leveled again: The launch of the all-in-one iMac (the iconic color model), in 1998, was the one of the key milestones of the company's resurgence. The iMac was well received and helped to boost sales, leading Apple to return to profit once again.
- Jobs is back: Around the same time, in the late 1990s, Steve Jobs returned to Apple – another key development in the company’s turnaround. This was the beginning of what would soon become a revolution in consumer tech (particularly mobile) devices.
- First, the iPod: In the early 2000s, Apple's market cap reached $5 billion. This period was marked by the launch of innovative offerings that gave Apple the identity that it still carries today. In 2001, the iPod was unveiled, selling over 100 million units in 6 years. In 2003, the iTunes store saw the light of day, marking the first step taken by Apple in services.
- MacBook and MacBook Pro: 2006 saw the launch of the first model in Apple's current line of PCs. Apple stock began to appreciate fast: from 2003 to 2006, shares jumped from $6 to $80, adjusted for stock split.
- iPhone, a game changer: In 2007, Apple achieved perhaps the peak in success with mobile devices. Steve Jobs introduced the iPhone and Apple created the concept of the smartphone. To date, it is the tech giant's most important revenue generator. During the year of the iPhone's launch, AAPL jumped from $75 billion to $100 billion in market cap.
- Beyond smartphones: A year later, in 2008, Apple launched the AppStore, the company's biggest revenue generator in services today.
- iPad, the tablet concept: In 2010, when the first iPad was successfully released, Apple passed its peer Microsoft in market cap for the first time. At the time, Apple was worth $269 billion, making it the third largest among public companies in the world by market cap – trailing oil and gas giants PetroChina and Exxon Mobil.
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- King of the world: In 2011, the year Steve Jobs passed away and current CEO Tim Cook took over, Apple became the most valuable company in the world. The market cap reached $337 billion, surpassing Exxon Mobil.
- Wearables opportunity: After successful updates to its entire portfolio, Apple's growth continued. In 2015, Apple strengthened its wearables segment with the launch of the Apple Watch. In 2016, it was time for the AirPods, adding revenue to this growing segment. Later that year, it was announced that there were 1 billion active Apple devices in the world. At that point, the company was worth $608 billion.
- The first trillion: In August 2018, Apple hit its first trillion dollars in market cap. However, by the beginning of 2019, the equity value had dropped to $746 billion after a broad market pullback in Q4 of 2018, only returning to $1 trillion in October 2019.
- The second trillion: In August 2020, after delivering outstanding results quarter after quarter, Apple crossed another milestone: $2 trillion in market cap. The year also marked the kickoff of the 5G cycle with the launch of the iPhone 12 and the transition of Intel processors to the Apple-designed M1 chip.
- The next step: The main driving force of the company today is Apple’s ecosystem, which ties together its products and services and turns the company into a revenue machine. As we await the next few chapters of Apple's incredible market cap journey towards the third trillion, some new candidates for possible catalysts have emerged: the ongoing 5G cycle, the Apple-designed M1 chip, developments in mixed reality technology and a possible Apple Car.
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)