Inside Apple’s Rise to $2 Trillion | WSJ

Summary

The video explores Apple's journey to becoming the world's most valuable publicly traded company, reaching a $2 trillion market cap in August 2020. After Steve Jobs' death in 2011, Tim Cook faced doubts about his ability to lead the company. However, through product innovations, expansion into services, and navigating challenges like the US-China trade war and the pandemic, Apple’s stock surged. The pandemic accelerated demand for Apple’s devices and services, contributing to its success. Despite regulatory scrutiny and trade risks, Apple remains a dominant force in the tech industry.

Takeaways

• 📈 Apple became the most valuable publicly traded company in the world in August, surpassing $2 trillion in market cap, overtaking Aramco.
• 📉 After Steve Jobs passed in 2011, many doubted Tim Cook’s ability to lead, but Apple's stock surged amidst challenges like lawsuits and trade wars.
• 💻 Apple's rise began in 1977 with the launch of the Apple II, revolutionizing the home computer industry.
• 🚀 In August 2018, Apple hit $1 trillion in market cap for the first time, outperforming other tech giants and sparking renewed investor confidence.
• 📉 In 2019, iPhone sales fell short due to trade tensions with China, and Apple saw a $400 billion market value decline, marking its worst stock performance since 2008.
• 💳 In 2019, Tim Cook expanded Apple's focus on services with announcements like the Apple credit card, Apple TV+, and more, aiming to balance product and service revenue.
• 📦 The US-China trade war posed challenges, but Cook skillfully navigated tariffs, protecting key products like the iPhone from price hikes in the US.
• 🛠 Despite antitrust probes, regulatory scrutiny, and criticism of its App Store policies, Apple’s stock price surged, aided by massive stock buybacks.
• 🌍 The COVID-19 pandemic disrupted Apple's supply chain in China, but stimulus measures and increased demand for tech due to work-from-home trends boosted its stock.
• 💡 In August 2020, Apple achieved a $2 trillion market cap despite global economic volatility, cementing its status as a dominant force in both hardware and services.

Q & A

What milestone did Apple achieve in August 2020?

In August 2020, Apple became the most valuable publicly traded company in the world, surpassing Saudi Aramco with a market cap exceeding $2 trillion for the first time.

What were some doubts surrounding Tim Cook's leadership after Steve Jobs passed away?

After Steve Jobs passed away in 2011, many investors doubted that Tim Cook could continue Apple's success, questioning whether he could sustain the company's growth and innovation without Jobs.

What were some of the key factors behind Apple's rise to a $1 trillion market cap in 2018?

Apple's rise to a $1 trillion market cap in 2018 was fueled by strong iPhone sales, particularly the iPhone 10, as well as record performance in its app store and services. This was supported by Apple's best-ever third-quarter earnings report in July 2018.

What challenges did Apple face in early 2019?

In early 2019, Apple faced challenges due to a drop in iPhone sales, particularly in China, largely caused by the US-China trade war and underwhelming reception of its higher-priced iPhone models. This resulted in the company slashing its revenue forecast for the first time in 15 years.

How did Apple respond to declining iPhone sales in 2019?

In response to declining iPhone sales, Apple shifted its focus to services, introducing new offerings such as the Apple credit card, Apple TV+, and expanding its services portfolio, which helped the company regain momentum.

What impact did the US-China trade war have on Apple?

The US-China trade war affected Apple's sales in China, one of its key markets, but Tim Cook successfully navigated the tariffs, keeping products like iPhones exempted from major sanctions. This helped minimize potential damage to the company.

How did Apple benefit from the COVID-19 pandemic?

During the COVID-19 pandemic, demand for Apple's products and services increased as people relied on technology for remote work, virtual schooling, and entertainment. This led to a surge in sales for iPhones, iPads, and services like Apple TV+ and app store downloads.

What were the main drivers behind Apple's stock recovery in 2020?

Apple's stock recovery in 2020 was driven by continued strong demand for its products, particularly the iPhone SE, coupled with economic stimulus programs that lifted the market. Apple's services business and resilience in its supply chain also played a role.

What regulatory challenges does Apple face moving forward?

Apple faces regulatory challenges in the form of antitrust investigations in the US and Europe, particularly related to its app store practices. The company is also at odds with several businesses that criticize its control over the app store and associated fees.

What is the significance of Apple's $2 trillion market cap?

Apple's $2 trillion market cap is a significant milestone that underscores its dominance in the tech industry. It reflects the company's ability to navigate economic challenges, expand its services business, and maintain consumer demand for its products, despite regulatory pressures and trade tensions.