Patience pays off as Apple becomes first US firm valued at $1 trillion

Apple has become the first $1tn (€856bn) publicly listed US company, crowning a decade-long rise fuelled by its ubiquitous iPhone that transformed it from a niche player in personal computers into a global powerhouse spanning entertainment and communications.

Patience pays off as Apple becomes first US firm valued at $1 trillion

By Noel Randewich and April Joyner

Apple has become the first $1tn (€856bn) publicly listed US company, crowning a decade-long rise fuelled by its ubiquitous iPhone that transformed it from a niche player in personal computers into a global powerhouse spanning entertainment and communications.

For Donna Fenn who bought shares of Apple in the 1980s on the recommendation of a stockbroker, patience has paid off.

At the end of 1985, not long after Ms Fenn, now 59, made her investment, shares of Apple were trading at the equivalent of 39 cents each, adjusting for subsequent stock splits.

Little could she imagine that the value of Apple shares bought then would climb more than 50,000%.

The tech company’s stock jumped 2.9% to end the day at $207.39, giving it a market capitalisation of $1.002tn.

During the session, Apple’s stock market value reached as much as $1.006tn, bringing its gain to about 9% since it reported this week quarterly results above expectations and said it bought back $20bn of its own shares.

Started in the garage of co-founder Steve Jobs in 1976, Apple has pushed its revenue beyond the economic outputs of Portugal, New Zealand, and other countries.

Along the way, it has changed how consumers connect with one another and how businesses conduct daily commerce.

Apple’s stock market value is greater than the combined capitalisation of Exxon Mobil, Procter & Gamble, and AT&T. It now accounts for 4% of the US’s S&P 500.

The Silicon Valley stalwart’s stock has surged more than 50,000% since its 1980 initial public offering, dwarfing the S&P 500’s approximately 2,000% increase during the same almost four decades.

One of three founders, Mr Jobs was driven out of Apple in the mid-1980s, only to return a decade later and rescue the company from near bankruptcy.

He launched the iPhone in 2007, dropping “Computer” from Apple’s name and super-charging the mobile phone industry, catching Microsoft, Intel, Samsung Electronics, and Nokia off guard.

That put Apple on a path to overtake Exxon Mobil in 2011 as the largest US company by market value.

During that time, Apple evolved from selling Mac personal computers to becoming an architect of the mobile revolution with a cult-like following.

Mr Jobs, who died in 2011, was succeeded as chief executive by Tim Cook, who has doubled the company’s profits but struggled to develop a new product to replicate the society-altering success of the iPhone, which has seen sales taper off in recent years.

In 2006, the year before the iPhone launch, Apple generated less than $20bn in sales and net profit just shy of $2bn.

By last year, its sales had grown more than 11-fold to $229bn.

Reuters

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