Why Apple is the most successful company in history

16.02.2015
Everyone knows that Apple had a great fourth quarter and that its most successful product line, the iPhone, is doing better than ever, too.

But it's difficult to grasp what a mind-blowingly successful company Apple is until you take the time to gather and digest news about the company that has emerged in the past week or two.

I've done it. And it has become obvious to me that Apple is not only successful, not only the most successful company in technology, not only the most successful company in the world but the most successful company in the history of companies.

Is that an extreme statement Maybe. But let me make my case, and we'll see if you disagree.

Here are the 11 ways that Apple is the most successful company in history.

1. Apple is the world's most valuable company

At the close of markets Thursday, Apple's value as determined by its stock price was $728.35 billion. That's nearly twice the market value of the world's second most valuable company, Exxon-Mobil.

Some experts disagree with the market about the value of the company. Activist investor Carl Icahn thinks Apple is "dramatically undervalued," and is actually worth $1.25 trillion.

2. Apple is the world's most valuable brand

Several organizations rank global brands on various metrics, and all the major ones rank Apple's as the world's most valuable brand. For example, the Forbes list ranks Apple's brand as twice as valuable as Microsoft, the world's second most valuable brand, and far more valuable than Google, the third.

3. Apple makes more money than any company ever

Apple recently reported revenue of $74.6 billion and a mind-blowing $18 billion in profits for a single quarter, which is the largest quarterly earnings of any company ever.

This is astonishing especially by comparison. The big money maker is the iPhone. In an industry with dozens of major players and hundreds of minor ones, where most companies lost money, some break even and actual profits are extremely rare, Apple by itself earned 93% of all smartphone handset profits in the fourth quarter.

4. Apple's cash flow problem is that it doesn't spend enough

Apple reported a cash hoard of $178 billion. That's literally enough cash to buy every car company in America and still have billions left over.

Most of that money is offshore (in Ireland, actually). Apple can't invest it or return it to investors without also breaking records in the paying of taxes, which Apple doesn't want to do.

5. Apple has crushed (or co-opted) all rivals

Apple is famous for its rivalries. Under Steve Jobs,  Apple spent nearly $1 million in 1984 on a Super Bowl commercial vilifying IBM as "Big Brother."

Apple's early years were consumed with direct competition with Microsoft, which in the 1990s Microsoft won.

Later, Jobs would declare "thermonuclear war" against Google for acquiring and promoting Android.

More recently, Apple clashed with Samsung in a war over design, patents and market share.

All these conflicts have been resolved with Apple winning.

Apple, which was once a fraction of the size and held a fraction of the PC market share of Microsoft, is now valued higher than both Microsoft and Google combined. Microsoft is in something of a rebirth in part because it has followed Apple's approach in mobile (touch tablets, for example, instead of pen-based tablets) and embraced iOS for Office and other products.

IBM has been brought to heel as a junior partner for the IBM MobileFirst for iOS apps program. IBM is hoping that some of the Apple magic will rub off on IBM's mobile enterprise group.

Samsung has now been officially crushed as a smartphone rival to Apple. The score Apple 93, Samsung 9 (I'm talking about percentage of profits in the smartphone business.)

6. Apple is building the world's coolest headquarters

The best place in the world for a tech company, of course, is Silicon Valley. But the truth is that Silicon Valley "campuses" tend to be boring, generic, non-descript "office parks." Silicon Valley is ugly.

Sure, the Googleplex in Mountain View is vaguely cool, with it's life-size T-rex statue and goofy multi-colored bicycles made famous by "The Internship." The Oracle headquarters are kind of cool. Everyone wants to swim in "Lake Larry." Twitter's San Francisco offices are a delightful, post-modern confection.

But Apple's insane, bad-ass spaceship campus will rule them all. It sits on real estate made extremely valuable mostly by, well, by proximity to Apple. The ugly stuff (the major road connecting the main building with a nearby boulevard, plus some parking, functional buildings and utilitarian functions like heating, cooling, power, etc.) are underground or shoved to the periphery and out of sight.

The main event is the pristine doughnut of a building that, according to Steve Jobs, doesn't have a single pane of flat glass. It's all curved. (Apple built a factory in Germany to make that glass.) And the main building is surrounded by trees and grass and local habitat.

The most underappreciated feature of the new campus is an underground theater where Apple will announce new products. Because it will be under company control, Apple will be able to invite journalists on a few days notice, and will be able to prevent the inevitable product leaks that come from spy shots of San Francisco's Moscone Center.

Plus, we learned this week that the campus will be 100% solar powered.

The new Apple spaceship campus will be awesome. Here comes the video.

7. Apple has mostly solved the phone theft problem

We learned this week that, thanks to Activation Lock, iPhone thefts are down 50% in London, 40% in San Francisco and 25% in New York.

When is the last time a social problem like crime was cut in half by a new technology

Call it a massive success for Apple.

8. Apple has mostly solved the app discovery problem

Apple's iOS and Google's Android dominate the smartphone market partly because they've attracted the world's mobile app developers. iOS has roughly 1.21 million apps in the App Store.

Now Apple is partnering with Pinterest to re-invent app discovery with a new Pinterest feature called App Pins. The feature enables Pinterest users to pin apps to their boards like any other content, but with apps downloadable directly from Pinterest.

App Pins make iOS apps much more discoverable and social.

9. Apple has mostly solved the China problem

The world's most populous country is experiencing a massive explosion in home-grown smartphone brands, including Lenovo, Huawei, Xiaomi, ZTE, Oppo, Umi, Zopo and Meizu.

These companies are starting to clobber foreign competitors in China. Samsung, which used to dominate the Chinese market, is getting hammered by home-grown upstarts.

It's getting very hard for any non-Chinese handset maker to compete in the Chinese market.

Except Apple. Canalys says Apple is now the number-one smartphone maker in China. (Note that this is a controversial conclusion; some market research firms think Apple is number two in China.)

10. Apple has mostly solved the wearables problem

Companies from Google to Pebble to Samsung to Sony have been trying to mainstream smartwatches without success. The most popular platform to date is Google's Android Wear, which we've recently learned has sold about 720,000 units, falling far short of the 1 million watch mark and representing only about 15% of the 4.6 million smart watches shipped last year, according to Canalys.

Nearly all analysts are predicting that Apple will surpass this number in the first few days or weeks of the Apple Watch's release. For example, JP Morgan says Apple will sell 26 million Apple Watches this year; Morgan Stanley says 30 million and Cantor Fitzgerald predicts 37 million.

The problem Apple has solved is that Apple understands that a wearable has to be plugged into your nervous system and be made part of your physical body. (Apple's doing this with a combination of touch, haptics, sound and visual elements.

11. Apple's biggest business opportunity has barely started

While Japan, Scandinavia and Kenya have been plowing forward for years on mobile payments, backwater America has been trapped in an old-and-busted credit card hell.

We've heard the predictions and promises. For years, companies like Google and others have failed to capture the public imagination with a viable mobile payments system that real people would actually use.

Then along comes Apple with Apple Pay, and it appears to be winning in the U.S. market. Some two-thirds of all contactless payments are now made with Apple Pay.

Apple is winning because it zeroed in on the main barrier to mainstream acceptance: convenience. Simply tapping an iPhone to an NFC reader while holding it with your thumb on the fingerprint reader is all you need to do to buy stuff with Apple Pay.

This is possible only because of the unique fingerprint reader Apple uses, which other companies cannot use because Apple owns it (from their acquisition of AuthenTec).

I believe Apple Pay will grow massively in the next few years to become an even bigger business for Apple than the iPhone.

All of these successes add up to Apple clearly being the most successful company in history. No other company has ever made this much money, won on so many fronts or positioned itself to keep on winning.

(www.computerworld.com)

Mike Elgan