Source: Technology New Knowledge
Apple's market capitalization seems to ignore all laws of gravitation.
On the first trading day of the new year, the intraday briefly broke through $182.86, becoming the world's first company with a market capitalization of $3 trillion. Less than three and a half years after the last time it broke through to a trillion-dollar enemy country, Apple directly surpassed the former center of the world economy, the United Kingdom, to become the world's fifth-largest economy.
This market capitalization breakthrough is also the earliest and fastest annual focus event forecast for analysts of major financial institutions this year in 2022. For example, at the beginning of the year, the "International Finance News" issued this prediction.
Earlier, morgan Stanley analyst Katy Huberty raised Apple's stock price target from $164 to $200 last December, stressing that Apple's possible AR/VR devices had not yet been reflected in the stock price. In addition, Huberty also believes that in the past quarter, Apple's software and hardware revenue will also exceed expectations.
It can be seen that even if Apple stands at a height that refreshes the history of the market value of world enterprises, major institutions and analysts continue to be optimistic about its future trend from Apple's main business, market environment, future business and other aspects.
But another fact is that Apple, which has exceeded the market value of three trillion yuan, has not changed substantially in its main business. According to the latest financial report released on October 19, 2021, Apple's main business income is still dominated by hardware revenue such as mobile phones, software service revenue has grown steadily, and the overall financial performance is lower than expected. After the earnings report, Apple's stock price fell by 4% at one point.
As a hardware technology company, from the bangs design of the iPhone X full screen to the late arrival of the iPhone 12 5G mobile phone, Apple has always been criticized for "no innovative breakthrough in products".
This also means that the breakthrough of three trillion yuan is essentially nothing remarkable for Apple, which is known for opening a new era of product innovation. Compared with three trillion, more people have begun to look forward to the arrival of the four trillion era.
Not so remarkable three trillion
What is the concept of a $3 trillion market cap? This is a question that almost every media report will ask apples to break through 3 trillion. Through the form of self-questioning and self-answer, this three trillion yuan can be equivalent to the GDP of the United Kingdom, or 5 Chinese Internet giants Tencent, or 7 A-share evergreen Moutai.
However, the replacement of the concept of equivalence at the monetary level can only prove that Apple's market value has reached a new height, and for the company itself, the core competitiveness behind the market value is the key. If you comb the development of Apple's core competitiveness according to the breakthrough history of trillions of DOLLARs, it can be found that the current three trillion may be a breakthrough with the lowest gold content of Apple.
For the development of Apple, according to the stage of trillion-dollar market value, it can be divided into three stages.
The first stage is in 2018, Apple preempted the US e-commerce leader Amazon to take the lead in reaching a trillion US dollars market value.
At that time, Apple's competitors in the global stock mobile phone market were Samsung and Huawei; in Southeast Asia, India and other incremental mobile phone markets, competitors were Xiaomi OV.
How big is the competition in the main business? According to the survey data released by IDC, Apple fell from the position of the world's two largest smartphone companies for the first time in 8 years, and Huawei surpassed Apple to become the world's second largest mobile phone company.
In the regional incremental market, Apple's Indian team has also begun to lay off employees, and third-party market research agency Counterpoint data shows that in the first half of 2018, the iPhone sold less than one million units in India, with a share of only 2%. The main reason why it is difficult to roll out on a large scale is that the average price is too high. Thanks to the localization of supply chain operations, Xiaomi and Samsung have won 60% of the market share in the Indian market.
Under such pressure, the main reason why Apple's market value exceeded one trillion yuan came from the price increase strategy of the product. According to Apple's data for the third fiscal quarter of 2018, 41.3 million mobile phones were sold, an increase of only 1% year-on-year compared with the same period last year, but thanks to the price increase of the iPhone X series, the revenue increased by 20% year-on-year.
In the face of many competitors, relying on price increases to break through the first trillion market value stage, at this time Apple shows the brand power accumulated in the era of creating smart phones.
However, under the continuous seizure of domestic mobile phone manufacturers such as Huawei and Xiaomi OV, Apple's overall market share is narrowing. This background led to a second trillion dollar goal for Apple's market capitalization, which was not achieved until august 2020, two years later.
The breakthrough in the second stage is still driven by Apple's three quarterly reports. According to apple's third quarter (second natural quarter of 2020) performance report released by Apple in 2020, net revenue increased by 11% year-on-year; net profit increased by 12% year-on-year; diluted earnings per share increased by 18% year-on-year, and all aspects of growth exceeded previous market expectations.
Behind the high-quality financial report data, this year's "Apple tax" has also begun to be sued by The Fortnite parent company Epic, along with entering the second trillion market value stage is Apple's overbearing booth fee built on the closed-loop hardware ecology.
The brand dividend of the first trillion stage comes from the "Think Different" brand recognition laid by Jobs and the price increase strategy implemented by Cook; the hegemonic ecology of the second trillion stage comes from the closed-loop ecology of The AppStore laid out by Jobs and the software services operated by Cook.
The span of the two stages is progressive, the first stage emphasizes the hardware volume reaching the user, and the second stage focuses more on the tax collection model rooted in the huge hardware users.
From the first stage to the second stage, Apple took two years; the third stage of trillions of dollars in market value, Apple this time did not wait long, only took 9 months. Apple's core competitiveness has also evolved from a strong faction of hard technology to a beneficiary of policy release.
First of all, in terms of competitors, affected by sanctions, Huawei's global mobile phone business has shrunk in an all-round way, and the high-end market dividends vacated have almost been eaten by Apple.
According to data from the research agency Canalys, in the first three quarters of 2021, Apple's mobile phone shipments once again returned to the second position in the world. According to the data released by a number of survey agencies, in October this year, Apple won the sales championship in the Chinese market with a market share of 22%.
At the same time, according to the news of South Korean components, Apple decided to set the iPhone shipment target for the first half of 2022 at 170 million units, 30% higher than this year's 130 million units, challenging the target of more than 300 million units of annual shipments.
The dividend of Huawei's global market contraction is fully manifested in Apple's current market share and future product stocking data, which is the main reason for Apple's stock price. Under the influence of policies, in terms of global market competition, Apple, which has no one to suppress, ushered in the era of no opponents.
On the other hand, apple taxes, the main factor that had previously caused Apple's stock price to fall in December, suspended the implementation of the deadline decision to amend Apple's App Store rules in a subsequent appeal to the Ninth Circuit.
The lack of competitors in the global market, the suspension of the Apple tax case resolution, and the favorable release of both policies have made investors regain Apple's confidence.
One of the investors, Buffett, who made more than $120 billion in Apple's book earnings alone, also revealed at the 2021 shareholders' meeting that he is increasingly concerned about the impact of short- and medium-term driving variables such as policy and environment on asset prices. Berkshire, which embraces long-term value investing, is moving from a company that crosses the cycle to a company that lives in the cycle.
Compared with the previous two trillion stages, killing themselves from the difficult environment, Apple, which now relies more on external forces to break through three trillion, seems to be less remarkable.
Four trillion is the core competitiveness
Under the favorable circumstances of many parties, the unrepressed Apple has exceeded three trillion yuan, which has become a natural thing in the eyes of the capital market.
Not only that, more institutions and analysts are beginning to look forward to the four trillion era that truly shows Apple's core competitiveness in the next stage.
According to dan Ives, an analyst at U.S. investment bank Wedbush, Apple's record rally in 2021 could extend into 2022. According to the latest report, he believes that Apple's stock price can rise to $225 in a bull market, which means that the company's stock price may rise by 24% from the closing price on January 4, 2022.
In Dan Ives' view, the services business is also an important part of Apple's future upside, worth $1.5 trillion in the eyes of Wall Street, half of the current market value. The other half comes from mobile phone-based hardware products and will enter the strongest product cycle in more than a decade, led by the iPhone 13.
All this means that in the favorable environment of policy release, Apple, which has exceeded the market value of three trillion US dollars, does not have all the imagination space to release new products.
On CNBC's "Power Lunch" show, DA Davidson managing director and research analyst Tom Forte believes that the market capitalization performance of Apple's new products will be revealed when Apple is ready to hit the four trillion market capitalization stage. The speed of the four trillion stage depends on the extent to which Apple enters the electric vehicle market and takes the lead in augmented virtual reality.
At the same time, Forte believes that at some point in time, investors will not just receive upside on the assumption that Apple already has mature business lines, Apple must have new product releases, and must show that they can develop these exciting new markets.
Compared with setting a new record and becoming a company with a market value of three trillion US dollars, it is obvious that the fourth trillion us dollar Apple can become a milestone leap for the core competitiveness of enterprises.
According to the predictions of many top analysts on Wall Street, Apple Glasses or cars will usher in major progress in 2022, and perhaps Apple, which has exceeded four trillion market capitalization, can truly stand on the double peak of market value and hard technology.
However, before reaching four trillion, Apple still needs to stabilize three trillion. On the first day of 2022, Apple also ushered in several bad news, one is that the Indian market officially opened Apple's antitrust investigation, and the other is that the British veteran media "Financial Times" pointed out that the Apple Watch is not accepted by the medical community.
As a global enterprise, Apple, which benefits from the release of favorable POLICIES in the United States, may face more policy regulation in other regional markets outside the United States. The re-folding of the health business also means that the imagination of software service charges for wearable devices may not reach the space of traditional hardware devices such as mobile phones.
Three trillion happy, the apples that are still on the road are far from the moment of opening champagne.