As Apple’s stock hit $207.05 today, its value reached one trillion dollars, yes with 12 zeros and the first US company to do so. This is an incredible journey for Apple.
Back in 1992, when I was introduced to Steve Jobs, he was out of Apple and doing Next. He jokingly remarked to me (I had just left IBM to join Oracle), “you better fix this company or else Larry won’t be able to pay for water to fill the lake (in front of Oracle HQ)”. Subsequently I did attend more than one presentation from Steve explaining how powerful the Next computer was.
Subsequently his second coming to Apple happened back in 1997 after Apple acquired Next and Gil Amelio was ousted as CEO. A friend of mine (former Oracle colleague) was a senior advisor to Steve on software back in 2002. I visited him at Apple HQ then and he said that Steve was pondering if Apple should be changed to a software company, in which case, he had to lay off over 70% of employees. How he reshaped the PC business during his first few years is well-known. We were commenting half jokingly that Apple was in the business of painting computers, as they came in varieties of colors. The financial situation was quite bad then. As part of diversification, Steve introduced the iPod as a totally new way of storing music. It’s UI was a great innovation.
Advance the clock to 2007 and then came the iPhone which completely changed the landscape. Sales of the iPhone now account for more than 60 percent of Apple’s total revenue. In 2017, Apple sold 223 million of the devices, earning the slot as the top-selling tech product of the year. Samsung came in second, with combined sales of the Galaxy S8 and Note 8 hitting 33 million.
In addition to profiting handsomely from iPhone sales, the device made possible other Apple revenue streams, including the App Store, Apple Music, iCloud and Apple Pay. Those services created $8.5B in revenue for Apple in the last quarter of 2017 alone ― more than it made on AirPod, Apple TV, Apple Watch, iPad and Beats headphone lines combined.
Steve’s genius is still paying big dividends with innovative design and user friendliness. As someone said, if you can reshape one industry in your life time, you will be remembered for ever (like Alexander Graham Bell). But Steve reshaped six industries – PC (first in the market), Music (iPod & iTunes), Smartphone (iPhone), Tablet (iPad), Store (Apple Store with steel and glass), and Animation (Pixar, now part of Disney).
After his death in 2011, Al Gore had mentioned that someone like Steve Jobs only comes to the planet every 150 years. Today, Tim Cook and team at Apple should be very proud of their achievement in reaching 1 trillion dollar valuation. For perspective, the gross domestic product of the entire U.S. is just over $18.5 trillion.