Neil Debenham

Member Article

A $3 trillion valuation indicates there are no signs of slowing down for Apple.

Neil Debenham, CEO of Fintrex

On January 3rd 2022, Apple became the first US company to be valued at over $3 trillion. The tech giant continues its incredible share price growth, tripling in value in under four years and growing faster than the US economy. Furthermore, since the beginning of 2021, its share prices have risen astronomically, by 38%.

Despite the global pandemic, Apple’s valuation continued rapid growth- an unprecedented achievement considering the worldwide state of perpetual lockdowns. Their growth continued to gain momentum and represents one of the most significant so-called ‘unicorn’ success stories in history. The variety of factors causing this tell an interesting story and posit questions for the how the tech industry will map out over the coming years.

Technology has a unique set of characteristics within the marketplace, given its ability to connect people together virtually. In some respects, technology and the suddenly essential need to limit physical interaction played perfectly in tandem. The landscape for working and learning changed to a point where, even post-pandemic, it is likely here to stay.

Virtual meetings took over the way we conduct meetings, seminars, lessons, and even social events. This drastic switch served to highlight the importance of technology and how staying connected is one of the most vital components of society. Apple’s valuation is just one example that proves this. Where other industries suffered in the pandemic, technology thrived and cemented itself even further as an essential pillar of modern life.

Apple are at an automatic advantage by virtue of being a market leader and household name, however there are still lessons that can be learned by aspiring tech leaders. Diversification and constant updates of products keeps customers interested and inspired. Becoming complacent and relying on stalwart products is a recipe for disaster. As a fast-moving industry, being adaptable is key. While of course offering reliable, fit-for-purpose products will retain market share, people are always looking for innovation and investing in the ‘cream of the crop’. Technology is a sector which is home to many pioneering engineers and thinkers, and so it is vital to keep up with trends and stay ahead of the curve.

Furthermore, the move to increase revenue streams is an important lesson that can be taken from Apple’s strategy. Their physical products aside, they receive revenue through myriad other pathways such as their App Store, Apple Music, iCloud storage, Apple TV+, AppleCare and Apple Pay. Not only are they tapping into multiple submarkets such as insurance, data storage and streaming services, they have in turn created an integrated ‘universe’ of products and services that complement each other.

This is effectively a sophisticated way of achieving the simple business basic of adding value. If a product is valuable in its own right, that draws the customer in in the first instance. If the experience of using said product combined with other streamlined services is improved, then the likelihood of customer loyalty is dramatically increased.

Convenience is the order of the day when considering technology purchases, and Apple leads the way in achieving this goal. Risk taking is also a way in which Apple have achieved success on this front. For example, the launch of AirPods was met with criticism and even mockery, with the assertion they would be inconvenient and impractical. Fast forward to 2018 and AirPods hold a staggering 60% of the global wireless airbud market. It is this combination of risk taking and striving for user-friendly, accessible products which has catapulted Apple to this historic valuation. Aspiring tech leaders should draw from Apple’s customer centric strategies and offerings in order to emulate the trajectory within the sector.

A $3 trillion valuation indicates there are no signs of slowing down for Apple. With an unquestionably large market share, highly loyal customer base and propensity for innovation, they remain one of the most iconic brands of our time. A company reaching such a high valuation during a global pandemic also indicates how crucial the industry is within modern society. In a post pandemic world where certain aspects of living, working, and learning are set to remain reliant on technology, the market is likely to see continual rapid growth. Apple is a good indicator of what is to come for the market and the success of their model should not be underestimated.

This was posted in Bdaily's Members' News section by Lucie Hayes .

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