It has been a long time coming, but Apple could soon be worth $1 trillion — and counting. At about $940 billion, the tech giant is close to being the first company to pass that threshold in market capitalization, as Breakingviews predicted seven years ago. Growth has slowed since then, but customers remain loyal and today’s valuation is far from stretched. Apple’s timely focus on data privacy may help it get there.
The rather mundane improvements rolling out at Apple’s Worldwide Developers Conference this week demonstrate how the smartphone market is largely mature. Shipments worldwide declined slightly for the first time last year, the research firm IDC believes, and should grow less than 3 percent annually over the next five years.
That said, there’s no obvious replacement for smartphones on the horizon. Apple earned $48 billion last year, mostly from iPhone sales, so this looks like the base camp for the company. Phones are prone to being dropped, dunked in water or lost. Throw in small improvements, and the company can reap more per device. The average iPhone sales price actually rose last year.
Apple can wring more dollars out of users in other ways, as well. Service revenue from selling apps, online storage and streaming music is rising at a 31 percent annual clip and now accounts for 15 percent of sales. Add in revenue from ancillary hardware, and analysts think the company can increase operating profit 13 percent this year. It’s not hard to imagine a healthy rate of growth continuing. Tim Cook, Apple’s chief executive, is also milking the discomfort of Facebook, Google and others whose businesses rely heavily on sharing data, sometimes controversially, by contrasting them with Apple’s privacy-friendly approach.
more on Geo altCom
