At $3 trillion, Apple has crossed another market cap milestone.
On January 3, local time in the United States, Apple's stock price exceeded $180, and its market value once exceeded $3 trillion.
Ordinary people may have no idea of the number of 3 trillion. In simple terms, the combined market capitalization of the 2,037 listed companies on the Shanghai Stock Exchange is only $7.2 trillion, and Apple is equivalent to 40% of it. The Shanghai Stock Exchange is already the world's third largest exchange after the New York Stock Exchange and NASDAQ.
It is no exaggeration to describe Apple as "rich and invincible".
Since breaking through the trillion-dollar market capitalization for the first time in 2018, Apple's stock price has soared. From 1 trillion to 2 trillion, Apple took two years, and then to 3 trillion, it only took a year and a half.
Part of this is due to the tide of the market: Almost all tech companies' stock prices have risen over the past two years. But Apple's operating performance is still impeccable, and in the face of the market's high expectations, it has handed over a number of near-perfect financial returns.
Why does Apple seem to be becoming more and more "invincible"? Moving towards a market capitalization of $3 trillion, what has changed inside and outside the company? What exactly is Apple doing right? The answer may be in the following keywords.
M1
At the WWDC Developers Conference in the summer of 2020, Apple announced for the first time that the Mac will abandon Intel's X86 chip and switch to the ARM architecture self-developed chip.
In November, the MacBook Pro and MacBook Air equipped with the M1 chip were released. With excellent performance and power performance, the M1 Mac quickly detonated the market, and after word-of-mouth fermentation, in the first quarter of 2021 (corresponding to Apple's second quarter of fiscal 2021), the Mac achieved sales of $9.1 billion, an increase of 70% year-on-year, a record high.
In the year since the M1 chip was released, sales across the Mac product line have reached a record $35.2 billion, up 23 percent year-over-year.
And, considering that the M1 Mac debut model is a relatively inexpensive 13-inch notebook, the growth of the overall Mac user size will only be more.
The Mac is Apple's oldest product, nearly 40 years old. Since Jobs returned to Apple in the late 90s and released the iPod and iPhone, Mac was once considered a "marginal" business. In the era of mobile Internet, people's demand for "computers" has long been decreasing year by year.
The M1 proves that the user demand for "computers" remains solid. It's just that computers also need to keep pace with the times, need to have stronger performance, battery life, better portability, and connectivity.
In the territory of the Apple empire, Mac is not a "big business", and even in fiscal 2021, Mac sales account for less than 10% of the company's total revenue.
The first three computers equipped with M1 chips | Apple
But because of the self-developed chip, the Mac has more possibilities. It is not only more powerful, but also better connected and interoperable with mobile devices such as iPad and iPhone, and can run iOS apps. The "stickiness" between various devices is stronger.
Because all of its product lines use ARM architecture chips, Apple has also established a complete and unified development system. Developers can easily port apps to different device platforms, and users can get a more coherent experience.
This may be the most critical factor in pushing up Apple's stock price over the past year.
iPad
Another key word in Apple's performance growth over the past two years has been the iPad.
Before that, the iPad had been stuck in a "bottleneck period" for a long time. In fiscal 2013, iPad peak annual sales were $31 billion. By 2018, that number had fallen to $18 billion, which can be said to be "stagnant."
The reason is also very simple, before 2018, the iPad was an "enlarged version of the iPhone". With the popularity of smartphones, the screen is getting bigger and bigger, most users tend to use mobile phones to solve most things, if the office has a computer, the space left for iPad is almost 0.
But the pandemic has changed everything. In the era of the epidemic, whether it is online classes, remote work, or lying in bed watching dramas and playing games, it needs a lightweight and easy-to-use "big screen device". The iPad, on the other hand, is the best choice.
Using iPad to make phone calls for meetings has become a "daily" | for office workers during the pandemic Apple
User demand for iPads has exploded. Since 2020, iPad sales have climbed rapidly. Sales in fiscal 2021 reached $32 billion, up 33% year-on-year, breaking the 2013 record and breaking its own ceiling.
In the fall of 2020, Apple released a new iPad Air, which adopts a "full-screen design" similar to the iPad Pro, but at a lower price. In 2021, Apple continued to actively promote the update of the iPad product line, releasing the iPad Pro equipped with the M1 chip, as well as the smaller iPad mini. Most of the new products have been widely recognized by users.
Before that, there was a saying on the Internet that ridiculed the iPad, especially the iPad Pro: "Productivity before buying, iQiyi after buying."
But in the era of the epidemic and remote work, perhaps it is precisely because iPad can balance "productivity" and "iQiyi" to a certain extent, making it the choice of more people.
HERSELF
The past two years have been the two years of "Anything Is Available SE".
In April 2020, Apple updated the iPhone SE for the first time since 2016. After that, the emphasis on SE gradually increased.
SE is just a code name, and he symbolizes that Apple is beginning to pay more attention to relatively cheap "low-end products".
From the second-generation iPhone SE, to the Apple Watch SE, homePod mini, and the cheapest regular version of the iPad, Apple has accelerated the pace of updates for these products and equipped them with better chips.
Apple Watch SE| Apple
Prior to this, Apple had always been a company focused on "flagship". Jobs' product philosophy is to "provide the best product for users", even if it is expensive.
But times have changed. Whether it is a computer or a smartphone, Apple has long completed the occupation of the "high-end market", and if it wants to continue to grow, it must "sink".
Again, this is a pair of contradictions that are difficult to balance. Doing low-end products, if "doing too well", is bound to lead to high-end users also turning to those "more cost-effective" low-end products, hurting revenue. If you don't do well, you can't survive in the market.
The original iPhone SE was born under such a contradiction, because of the lack of competitiveness, and ultimately did not win word of mouth and sales.
But in the past two years, Apple seems to have found a "new strategy" for SE products: with the latest and most advanced chips, with the design and function of the previous generation.
The latest chip ensures that SE products have enough basic experience, will not be stuck, difficult to use. But the design and function of the previous generation distinguish it from flagship products.
Since 2020, Apple's "SE product line" has received more praise from users, and more and more voices about SE "incense".
"Incense"
In the fall of 2020, after the release of the iPhone 12, the "thirteen scents" of the terrier swept the network.
But most of the netizens, are "mouth suspect body integrity", mouth said wait for 13, or can not control the hand, bought the iPhone 12.
In fiscal 2021, when the iPhone 12 was the main flagship sales, the iPhone achieved sales of up to $192 billion, up 39% year-on-year, breaking the previous high.
An important reason why the iPhone 12 series is "fragrant", in addition to the appearance of the previous generation has changed greatly, is that it has become "cheaper".
The iPhone 12 series | Apple
Apple led a wave of smartphone "price increases" in 2017. The iPhone X released at that time pushed the price of the flagship mobile phone to $1,000 for the first time, and the domestic top price also approached 10,000 yuan.
Before the iPhone X, the pricing of the iPhone generally started at 4000-5000 yuan. Domestic Android flagships mostly only sell for 2000-3000 yuan. After that, because Apple "took the lead", coupled with the high price of upstream parts and components, more and more Android manufacturers also began to increase prices. Users gradually accepted the "price increase" setting.
Apple, on the other hand, decided to "cut the price" at this time. iPhone 11, 12 two generations of mobile phones, Apple reduced the starting price, providing 24 interest-free installments. After the launch, various channel discounts and events also came faster than ever. At the same time, Apple invested heavily in the development of A-series chips, and began to show a performance advantage far ahead of the Android camp.
Two generations of iPhones, almost all around the word "incense", consumers recognized its "cost performance", sales continued to rise, and finally set a new record in fiscal 2021.
New formulation
The road to a market value of 3 trillion is not smooth. Apple also suffered a major crisis.
In the fall of 2018, due to the price increase of the iPhone XS and XR series and the low market acceptance, Apple announced in early 2019 that it could not achieve the performance targets previously set, and the stock price fell sharply.
Subsequently, previously in charge of the "retail" business, there were high hopes within Apple, and there were even rumors that she would succeed Cook's senior vice president, Angela Ahrendts, leaving Apple.
Angela Ahrendts, a former CEO of luxury brand Burberry, joined Apple in 2014 to drive a "style revamp" of Apple Store stores. Although there is no evidence that she was directly involved in the planning and pricing of the product, her 5 years at Apple coincided with the 5 years in which the price of Apple's entire product line rose sharply.
Angela Ahrendts, former vice president of retail at Apple, | at the Apple conference Apple
Also leaving Apple in 2019 is Apple's chief design officer, Jony Ive.
If Angela Ahrendts is just an executive, Jony Ive is definitely apple's soul. He was the product designer that Jobs picked up after he returned to Apple in the late 90s. From the iMac to the iPod to the iPhone and iPad, he and Jobs together made too many good products to pass on.
Jony Ive and Tim Cook | in the iPhone XR launch area Apple
Two key executives left, and both began to question Apple's future path.
In the past two years, Apple has responded to doubts with strong performance. But the real secret is actually hidden in the "profit" of the financial report.
In fiscal 2021, Apple achieved a net profit of $94.7 billion, with a combined margin of 25.8%, compared with a net profit of 57.4 billion yuan in fiscal 2020 and a profit margin of 20.8%, a significant increase.
This shows that Apple's cost has been greatly reduced. Behind this, the biggest cost cut occurred in the manufacturing of the iPhone 12.
As a designer, Jony Ive has a need for excellence in its products.
In his view, the "beauty of design" in appearance and perception is greater than all cost issues, even practicality. So he has done a lot of "ungrounded" designs, including the ultra-thin fanless so the heat is serious MacBook, the "shiny black" but not scratch-resistant iPhone 7, and also including the $1,000 "monitor stand".
After Jony Ive left, his "protégé" Evans Hankey took over the hardware design. The iPhone 12 series can be said to be the first answer sheet handed in by Hankey after Ive left.
On the one hand, Hankey inherits the mantle of Ive, but at the same time knows more "down-to-earth" than Ive. The cost of the iPhone 12 has been greatly reduced, bringing more profits to Apple, and also giving it the confidence of "no price increase".
Some believe that Jony Ive's departure marks a new era for Apple. Apple products are becoming more "pragmatic" and have a warm humanistic temperament.
The recipe for Apple products is changing.
Johny Srouji, who is in charge of Apple's self-developed chip development, is becoming Apple's new "soul figure" | Apple
In 2018, when Apple's market value exceeded 1 trillion, Cook sent an internal letter. "We are immensely proud of this achievement, but it is not the most important measure of our success," he said in his letter.
Therefore, when the market value exceeded the milestone of 2 trillion and 3 trillion, Apple did not speak out.
From 1 trillion to 3 trillion, apple has been embracing change even as a "rich country" giant.
At 1 trillion, it was still overly dependent on the iPhone business and wanted to grow by selling more expensive iPhones; at 2 trillion, it had achieved a breakthrough through wearable devices and software services; and by today's 3 trillion, you will find that more changes are taking place within Apple than at any previous point in time.
Cook once stressed that Jobs founded Apple because he believed that "human creativity can overcome any challenge", and it is Apple's mission to achieve this.
They did. Today's milestone is also the starting point for the next new challenge.