NEWSAug 17, 2018

Apple’s Market Capitalization Exceeded Trillion, IPhone Products Contribute the Most

Apple stock price reached a new high, rising 2.92% to close at $207.39 per share on the evening of August 2, Beijing time.

Based on the closing price of the day, Apple's market value successfully broke through trillion of US dollars, becoming the first listed US company with a market value of more than one trillion dollars. It is also the world's first technology company with a market value of more than one trillion dollars. At present, the market value of Apple accounts for 4% of S&P 500, which has surpassed the total market value of Alibaba, Tencent and Baidu. The Industrial and Commercial Bank of China (the market capitalization is close to 2 trillion yuan), which has the highest market value in A-shares, is only one-third of Apple's market capitalization.


US technology stocks have been struggling recently. The stock price of US technology giants like Facebook, Amazon, Google have fallen. In the bleak background of technology stocks, Apple has such a bright performance, which is mainly due to its higher-than-expected third-quarter results. Apple's third fiscal quarter of 2018 showed that Apple's operating income in was $53.3 billion, up 17% year-on-year. Diluted earnings per share were $2.34, up 40% year-on-year, and net profit was $11.5 billion, up year-on-year. 32%. In Apple's superior profitability, iPhone products have made great contributions. According to financial report data, iPhone product sales in the third quarter were 41.3 million units, up 1% year-on-year; the average price was $724, revenue was $29.9 billion, up 20% year-on-year, accounting for 56% of Apple's revenue. In a conference call with analysts, Apple CEO Cook also revealed, "iPhone X once again became the sales champion this quarter, with customer satisfaction reached 98%."


iPhone products have long occupied half of Apple’s, playing a decisive role in revenue, profits and share prices. From the launch of iPhone product in 2007 to the fiscal year 2017, Apple's sales increased by more than 11 times, from less than $20 billion to $229 billion. Apple's net profit growth is more rapid, from less than $2 billion to $484 billion, almost the sum of Microsoft and JP Morgan, and it became the most profitable US listed company. In terms of stock price, Apple’s share price has risen nearly 18 times since the launch of the first iPhone in 2007.


The continuing rise in Apple’s share price has also made Warren Buffett one of the biggest winners. According to relevant data, Buffett's Berkshire Hathaway is Apple's second largest shareholder. It increased its holdings of 75 million shares of Apple in the first quarter. The total number of shares currently held is 240.3 million shares, holding about 5% Shares. Based on Apple's August 2 closing gains, Berkshire Hathaway's two-day floating profit was nearly $4.1 billion.


Although Apple has reached the top of the world, it still faces the doubts from all walks of life. The iPhone has a significant impact on Apple's revenue, but several emerging mobile phone brands are emerging in the market, which undoubtedly brings great challenge to the prospect of Apple’s market. According to a recent report released by IDC, a well-known market research company, Apple's mobile phone shipments in the second quarter of 2018 are basically in a stagnant state, while Huawei's total smartphone shipments reached 54.2 million, up 40.9% year-on-year, surpassing Apple’s 41.3 million units. In addition to Huawei, the shipments of Xiaomi, OPPO and VIVO have also increased a lot by different degrees. At the same time, these Chinese mobile phone companies have begun to circumvent the hardware and software innovation path that Apple has set for many years, trying to find another way. In such a fierce market environment, if Apple wants to continue to maintain market share or create new peaks, then developing the next product that can lead the market will be the top priority.

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