Why Apple Will Be The First Company to Reach a Trillion Dollar Market Cap

Apple is the dream company we always wished for when we were children. The messiah of companies that we never thought would come to Earth in our lifetimes.

When I was a kid the only thing I wanted in life was an Apple II+. When I finally got one, (my dad took one from his work and gave it to me for about six months) I did everything a young boy does with his computer.

I programmed (in BASIC) the computer to type my name over and over again. I then went to the local computer store and shoplifted Ultima III. My friends and I then copied each others games so we had a whole set of games to play with. I then skipped school incessantly in order to play games all day, my friends and I calling each other throughout the day (we all skipped school every day) in order to share the latest secrets we found while hacking our way through Castle Wolfenstein.

Fifteen years later Apple was on the verge of bankruptcy. The company I worked for (HBO) and Philip Morris, the cigarette company, were the only two companies in the city that I knew of that used primarily Macintoshes (except for the legal department, which used all PCs and every document was redlined, outlined, greenlit, in WordPerfect 7.1.1).

Gil Amelio, the CEO of the company for about 3 seconds came to visit HBO. We were all so impressed with him. The CEO of Apple! How much cooler could you get? At the time they were about this close from bankruptcy or being, at the very least, hopelessly inconsequential.

Five years before that was the Apple Newton. The head of Carnegie Mellon’s Art school said to me, “this will change the world.” And five years before that, I wrote my first term paper on this amazing little device, the Mac 512k. I also saw Steve Jobs when he visited Cornell’s Computer Science Department to get them to buy some NEXT machines. They were beautiful. Maybe still the most beautiful desktop machines I’ve ever seen.

Black cubes, super powerful. They were magic to program and experiment with. I wrote a chess program on them. Everyone surrounded Steve Jobs just to see what he looked like. I was jealous. He was young, rich, and had so much charisma you couldn’t even see past the light that shined out of him.

Now, I’m writing this on my last Windows-based laptop ever. I know what's going to happen. Already in my house there’s one Macbook Air. There are two IPod Touches, one iPhone, two iPads, and four or five iPods. I’ve got 10 authorized computers already for iTunes across two accounts. I download apps at least once per day, much more if you add in songs, TV shows and movies from the iTunes store. Within two weeks, before I leave on a trip for India, I will buy a Macbook Air 13” to travel with, and I know I will never go back to the HP laptops I’ve been using for almost the past 10 years.

We can try and model everything: Mac sales, iPod Touch sales, song sales, margins, etc. But even back of the envelope using current growth of the iPad and the app store, we can easily make a rationale for a trillion dollar market cap. The fact that iPad sales, rather than cannibalizing the Mac, has actually increased Mac sales further increases the argument. The day my dad had to take away my Apple II+, I cried. I have a 30 year relationship with Apple. I love it. I don’t think I have a real relationship with any other company on the planet. That’s why its going to be a trillion dollar market cap.

I agree - definitely not going to happen. I actually like Apple, and believe they make some very innovative products. But with this innovation comes development cost, which is why their products are expensive relative to other companies with lower margins that copy their products and features.

I especially appreciate the legions of rabid Apple fan boys that drive this engine of innovation. However, Apple's higher costs and especially their longstanding policy of building proprietary, closed systems will maintain them as a perpetual minor market share player. Not a bad place to be though, since they make some good profits (oh the horror, for a lib-worshiped company) and are driving the markets they're in. But higher product cost and closed/proprietary products will almost never gain you market dominance.

Obviously another article by many of the Apple fan boys. That's OK though - keep the hype up and keep the innovation rolling. I'll happily buy the lower cost "copy cat" products and get along just fine.

By the time the rest catch up to where Apple is now Apple will have gone on to the next step or two, leaving them in the dust once again. Look at the continuity in the evolution of Apple products, the new building on the previous. Do you think they haven't thought beyond this point? Don't be silly.

In reality, Apple has been left behind already. That's why, just a few months after releasing their first iteration of the iPad, they're talking about releasing a "new and improved" iPad2. They know they goofed, and now they're having to preempt the rest of the technology pack, which is, in reality, outperforming Apple with their versions of tablets. The iPad is a crippled version of netbook, with virtually no real computing capabilities, whereas, the other tech manufacturers continue to try to create tablets with real PC capabilities and with real OS capabilities. Same thing with iPhones where, the Android and the WM7 are receiving better reviews than the iPhone4. The sales of the WM7 are not there yet, but, it's in its infancy and it's the long-term strategy that counts, similar to what happened with the computers where Apple was dominant in the beginning of the PC revolution, but then, everybody else caught up and left Apple eating their dust.

Heck, Apple is doing well, I don't deny that. And they're probably the most profitable tech company out there right now. But, the long-term outcome is what matters. I don't see where they're any better than the competition, except in the hype and loyal fan-base areas. But, hype and a loyal fan-base can only count for about 5 to 10% of a market, similar to what they've historically had.

If I was looking at the short term, I'd go with Apple, but, for the long-term, I don't see them out-competing any of the other technology companies. What Apple makes, the others will do or have already.

I think you are saying Apple is not competitive in places they never really intended to go, the computer and gadget commodities market. That is where the rest are competing and they are welcome to it. It is low profit and low margin based on generic hardware to run the cheapest possible OS. For now that is Linux. It is free.

Because of the many possible configurations and many different component manufacturers it is no wonder that there are frequent problems and short lifespans. The MS Windows OS, originally based on DOS, is generally accepted as easy pickings for those with malevolent intent.

Apple has always had a different game plan, interrupted only when the Jon Scully marketing team ran things, and that did not necessarily include market share. They wanted to and do control everything from HW, SW, Advertising, Packaging, Applications, etc. They are after the best user experience and they can assure that only by controlling everything. The also have outstanding customer service. That costs money but it leads to excellent user experience.

The rest ride in after Apple has proven the viability of a market, copy the product features as best they can, buy the cheapest components to build a replica and then go to market and undercut Apples’s price. However, they are never as good as the Apple product and soon fade from sight. Apple gains market share by default.

I have five Apple products. They are 10, 8, 6, and 2 that are less than 1 year old. All are still performing as they did when new. The rest of my family has new PCs except for iPhones. They know my preference for Macs but they prefer PCs with Windows. They learned computer use at work.

Talking with you in this arena is like talking to a liberal about politics. You and I inhabit different worlds. You state things that are projections, wishful thinking, or just flat wrong. You inhabit a fantasy land.

There is no bigger fantasy land than that inhabited by the Apple fanatics.

And then, it is you that is using the liberal tactic of trying to redefine and confine someone into what they're not, like when they're trying to redefine Sarah Palin, and Glenn Beck, and like they did with Ronald Reagan. With that kind of tactic, it is you that is defining yourself as having the liberal way of thinking.

You can't handle the other side without trying to twist what the other side is saying. You are the one with the closed mind and cannot see beyond the butt-kissing fan-base that propagates the God-like personna that has been attributed to the likes of Steve Jobs and his company in general.

I don't care about a winner or a loser in the technology sector. I care about being practical, and using a product just because it performs and not because of its coolness and novelty and beauty. Whatever works is fine with me.

If some people believe that paying more for something is the way to go, and they feel that they're getting more for their money, then fine. Let them believe it. But, in practical terms, does a Mac really deliver more value for the money than a comparably equipped PC that can perform just as well, and for a lot less money. To me, that's a foolish waste of money. We're talking about PCs and tech gadgets, not houses or high-end automobiles such as a Mercedes or a Rolls-Royce. Some things are meant to be luxury items, but, a computer shouldn't be treated as a luxury item where people are willing to pay perhaps twice as much for something which isn't really any better, and oftentimes ends up being less for twice the money.

I could never justify paying paying twice the money or even slightly more for something that is meant to have a product life of somewhere between 2 and 5 years, which most PCs and tech gadgets are designed for. With new advances each week, what is sold today ends up being obsolete within a few months, and nobody, especially in the smart-phone market, wants to be caught with something that is one or two years older technology. So, why be stupid enough to buy into the hype.

So, exactly what is it that makes a Mac or an iPhone or an iPad superior technology? When the guts of those systems/gadgets aren't really superior technology compared to the competition, why is it that there are people that believe that, just because it's from Apple that they're buying superior products? Apple itself had to go the route of the PC when they decided to use "Intel Inside" for their computers, and most of the other pieces of technology that they have inside of their other gadgets are available to other manufacturers. I would not pay a much higher price for something that is intended to perform as well as other products from other manufacturers, and I wouldn't pay a much higher price for something that is intended to not have a useful life any longer than comparable products; remember that, obsolescence is what Apple and all other manufacturers are counting on in order to continue selling to the same client base. So, you can't convince me that Apple builds a shinier and longer lasting product that people will keep for 5 or 6 years. If that was their intent, they wouldn't continue counting on that same fan-base to sell their "latest and greatest" to.

To me, it's sheer stupidity to pay a lot more for something that is not that much better than the competition.

But, again, I don't really have a dog in this fight. I don't care where my potential customers come from, and I don't care what product they would use to reach what I or others develop. What I develop will look the same to them, and it doesn't matter if they paid $3000 for the Mac or $800 for a comparably equipped PC.

I just find the Mac vs PC debates to be silly and wasteful, and the iPhone vs every other smart-phone battles to be just as silly. Those are just pure nonsensical debates. As you might have imagined by now, I'm just a pure matter-of-fact practical type of person. I don't care how you waste your money or how frugal you are with your money.

I'd just rather not see people wasting their time on these silly debates, and don't believe that is smart to be paying insane prices for somethings that are not really superior products.

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