Apple Rises Further but Questions Emerge on Longevity of its Steam
Eight months into year 2012, Apple continues to flex its shares market muscle as the tech giant gained 64 per cent in the year so far and closed its Monday exchanges at $US665.15, en route to an overall market value of $US623.5 billion.
The mind-boggling numbers easily exceeded that of software titan Microsoft, which in December 1999 held an overall market capitalisation value of $US620.8 billion, based on the figures provided by Standard & Poor's.
With new products set to be issued by Apple overt the next three to six months, the prospect of more growth for Apple remains on track and according to The Associated Press (AP), Apple shares could hit the price of about $US745.80 per issue soon, presumably on the strength of iPhone 5, two versions of the dominant iPad and likely a new television set that is inherently attuned to the cyber world.
However, media reports and market analysts alike were quick to note that while currently Apple were simply so impressive, inflation consideration suggests that near-term wise, the Cupertino, California-based firm still has a long way to go in order to finally eclipse what Microsoft did when in the late 1990s the tech world was at its feet and Apple co-founder Steve Jobs was just prepping up his firm for a turnaround.
Prior to the start of year 2000 and of another decade, Microsoft, according to Reuters, was actually priced at a higher market value of $US853.7 billion, which is the exact worth of the company today based on calculations using formula sanctioned by the U.S. government.
It is likely though that Apple will eventually surpassed Microsoft's achievements, whose current market cap now only stands at $US257 billion, according to AP, as analysts cited by The Wall Street Journal pointed to signs of stability and other indicators that define the company's sterling financial road map.
Richard Sylla, financial history professor at New York University's Stern School of Business, told the U.S.-based publication that Apple is taking on the path set before by firms like General Motors, Exxon, IBM and even Microsoft.
Prof Sylla labelled them as "iconic companies," whose financial stature and economic values may have retreated a bit but generally maintained their image as benchmarks for rising firms like Apple (a resurrecting one, actually), Google and Facebook.
"When I think about these companies, their products were used by all kinds of people and their leaders were considered geniuses," the New York professor pointed out to The Wall Street Journal.
And his observations were all applicable to Apple these days, save for its price-to-earnings ratio that AP said is at 15.6, relatively cheaper compared to the average 16.1 ratio attributed with firms listed on S&P 500.
That specific indicator pointed to strong suggestions that investors do not necessarily agree with the sentiments aired by many analysts that Apple could become the first company to march well beyond the one-trillion mark in market capitalisation.
Investors could not help to question Apple shares' further capacity to deliver the goods considering that during its heydays, Microsoft's price-to-earnings ratio stood at 83, according to AP.
Also, amidst the incredible numbers presently pinned on Apple, reality is on the monitor of investors, who, despite the rosy projections that were pitched for the firm in the immediate quarters ahead, were still wary of the misses it registered the last time around.
"Apple will sell a lot of products, but I suspect that their reign as the most valuable company in the world won't last for more than another few years," Prof Sylla told WSJ, adding that normal market dynamics in the freestyle economy that Apple operates in dictate that some one else would come up with better gizmos soon enough.
In Apple's case, it would soon encounter the so-called iPhone and iPad killers that tech expert have been harping about.
It could come from its present nemesis Samsung, which in fact has bested Apple in the smartphone competition, or Microsoft, which is raring to fashion out sort of a second-coming in the form of the revamped Windows operating system and possibly via the Surface tablet.