Apple has become more than a trillion dollars worth: what does it mean

The record results of the third fiscal quarter increase Apple stock value. The company has not just become the most expensive in the world, but also the first American corporation in the history, which costs one trillion dollars.

Фото: Depositphotos

According to the BBC, just a day ago, on August 1, Apple's capitalization reached $935,3 billion, but the company's shares rose significantly due to the positive financial report. At auctions in New York on August 2, the cost of one Apple share briefly reached $207, and the entire value of the company reached one trillion. After this, the shares went down and are trading around $206 per share.

According to the company's latest report, Apple's revenue in the third quarter of the 2018 fiscal year, which ended in June, grew by 17% and reached 53,3 billion dollars. Market analysts predicted that the company's revenue for this period would not be higher than 52,4 billion.

Iphone for a thousand dollars

In the third quarter, the company sold fewer phones than it had planned. Despite this, Apple’s total revenue has grown significantly due to the demand for more expensive mobile devices.

Experts say that the demand for the iPhone X showed Apple management one important business trend: to stay in profit, you can sell fewer smartphones, but they should cost no less than a thousand dollars. Approximately as much, depending on the configuration costs iPhone X.

Previously, analysts feared that consumers might negatively treat an expensive smartphone. Sales show that iPhone fans are not embarrassed. The most expensive iPhone X has become the most popular, say Apple. In the third quarter, Apple sold a total of 41,3 million phones.

Apple ranks third in the world in sales of smartphones after Samsung and Huawei. At the same time, Samsung disappointed investors with low sales of the Galaxy S9 smartphone. Huawei, by contrast, is showing good results and a growth in 15 percent in the first half of this year.

Apple Business Services

The growth in revenue occurred not only due to sales of smartphones, but also due to the company’s business services. They brought Apple about $9,5 billion. So, Apple takes a percentage of user subscriptions to applications. The most profitable are video services like Netflix and the like. According to Apple CEO Tim Cook, demand for video apps will double every year.

Another source of revenue is the Apple Music music app, which now has 50 million users (including those who pay for a subscription and those who use a free trial of the product). According to Cook, Apple Music took the leading position in North America in the third quarter of this fiscal year. He noted that competition with other music services such as Spotify and Pandora will not lead to the companies acting against each other.

For a record trillion-dollar capitalization, which no American company has yet reached, Apple competed with Amazon and Google (more precisely, Alphabet, which owns an American search engine). Unlike its competitors, Apple may have serious problems due to the tense trade relations between the US and China.

Apple's path to a trillion dollars of capitalization in one chart

This week appeared information that some Apple devices may be subject to new US tariffs on goods manufactured in China. First of all, we are talking about the Apple Watch. Tim Cook said tariffs are a tax on consumers that could bring significant risk and unintended consequences. However, he added that he was optimistic and confident that the problem could be solved.

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