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Inside Apple鈥檚 Rise to $2 Trillion | WSJ - YouTube
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(soft music)
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- [Narrator] This August, Apple became
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the most valuable publicly
traded company in the world.
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Overtaking Aramco as its market
cap soared past $2 trillion
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for the first time ever.
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- And that is a $2 trillion milestone.
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- Shares of the company increased
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nearly 60% this year.
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I mean, it really is history.
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- [Narrator] But the
company's road to $2 trillion,
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hasn't been a straight climb.
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After founder, Steve
Jobs passed away in 2011,
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many investors doubted that
his successor, Tim Cook
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could fill his shoes and
propel the company forward.
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- Really a trillion dollar market cap
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wasn't part of the discussion back then.
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It was much more about whether Tim Cook
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could even sustain the level
of success that they'd had.
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- [Narrator] But amidst lawsuits,
regulatory investigations,
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and an ongoing trade war,
Apple's shares have surged.
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This is how Apple became
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the most valuable publicly
traded company in the world.
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- Introducing Apple II, the
easy to operate home computer.
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- [Narrator] Apple first
launched its Apple II
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home computer in 1977,
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revolutionizing the industry in the world.
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But to follow its rise to the very top,
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a good place to start is August, 2018.
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When Apple reached its
$1 trillion market cap,
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for the first time ever
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surpassing other tech giants
by billions of dollars.
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- Apple is now as valuable
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as the four biggest US banks combined.
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And if you'd put $10, 000 in Apple in 1980
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today, you'd be a millionaire.
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- [Narrator] The company was coming off
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one of its strongest years
since the death of Steve Jobs.
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- Apple had had some
stumbles up through 2016
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and there were doubts
about Tim Cook's leadership
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and the company's products prospects
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in the China market.
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Things started to stabilize really
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later that year and in 2017
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and by 2018, I think
people had a sense that
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the company was really clicking again.
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The iPhone 10 had come out
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and you saw the stock just continued
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to rise and rise and rise
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and then in the middle of the 2018,
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it kind of shot out to
get over the milestone.
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- [Narrator] In July,
2018, the company reported
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its best third quarter ever.
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Its flagship iPhones
remained widely popular
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and sales from the app
store and other services
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had hit all time highs,
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but this wasn't going to last.
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About a month later,
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Apple released a new suite of iPhones,
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which included it's most
expensive model yet.
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(audience applauds)
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- This is iPhone 10S.
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It is the most advanced
we've ever created.
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- They were riding high in 2018,
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going into the launch of the
new phones later that year,
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they were sounding very confident
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that those phones would succeed.
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- [Narrator] But things
didn't go as expected.
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In January, 2019,
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Apple announced it had missed
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its expectation for iPhone sales.
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This had a lot to do with
the ongoing trade war
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between the US and China.
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- The Chinese economy was suffering
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and purchases of iPhones
in China fell sharply.
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The higher price phone,
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I think people felt
underwhelmed by the new features
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and questioned whether it
was worth spending that much.
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- [Narrator] In response,
the company slashed
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it's quarterly revenue forecast
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for the first time in over 15 years.
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Since its peak, the company lost
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more than $400 billion in market value.
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2018 turned out to be Apple's
worst yearly stock performance
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since the financial crisis.
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And for some skeptics this fall from grace
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seemed to confirm their
doubts that Tim Cook
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would successfully lead the company.
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Then in March, 2019,
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Cook move to dramatically
expand his strategy,
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the company started in 2017.
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- Today, we're excited to extend
our services even further,
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making them even more entertaining,
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more useful and more informative.
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- [Narrator] During a special event
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in Cupertino, California,
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the company announced the Apple
credit card, Apple TV plus,
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and a number of new finance
gaming and new services.
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- This was something
that had already been set
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in motion before and that Tim Cook
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had really been hammering
on for a couple of years
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at that point.
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And it was really part of an
effort to transform the company
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from being focused on gadgets,
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to being focused on
gadgets and the services
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that attach themselves to those gadgets.
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- [Narrator] Amid press around the event,
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Apple stock price continued to rise.
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The company's big bet on services
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was starting to pay off.
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- In the spring of 2019,
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the US China trade war
was gathering momentum.
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Donald Trump was threatening
and imposing new tariffs
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and there was a great concern for Apple
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that its iPhones and other gadgets
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could get more expensive for US consumers
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as a consequence of this.
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- [Narrator] For years,
Trump has pressured Apple
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to move more of its production to the US.
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- And that was something
that really wasn't feasible
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on a mass scale for Apple.
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In fact, around this time,
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they were planning to shift manufacturing
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of the one product
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that they were still making
in the US over to China
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and that was their highest
end Mac desktop computer.
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Cook was able to largely
navigate around the tariffs
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and avoid having much damage
to Apple as a consequence.
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- [Narrator] With key
products, such as iPhones
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exempted from sanctions,
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Apple stock continue to gain momentum.
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But amid a surge of growth,
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Apple's new focus on
services brought scrutiny
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from federal regulators.
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In the US the company
faced antitrust probes
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related to its app store
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where many of the services are based.
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But this didn't seem to faze investors.
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Over the course of the year.
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Apple has bought back around $80 billion
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worth of its own shares,
further juicing the stock price.
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And by January 3rd, the
company's share price
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had more than doubled
from the year before.
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Apple's future looked promising
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and then this happened.
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- [Reporter] Chinese authorities
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have traced a new deadly virus
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back to this seafood market
in the city of Wuhan.
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- The coronavirus has spread
to countries across the world.
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- So via border restrictions
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and global share market free falls,
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attesting our politics,
economies and society.
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- [Narrator] As the coronavirus pandemic
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spread across the world,
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Apple's manufacturing hubs in China
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were hit, especially hard.
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- Like most companies, Apples start
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knows that have been in
February of this year,
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the coronavirus was scaring investors
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and Apple was probably more exposed to it
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than most companies because
it had emanated from China.
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Apple's contract manufacturers in China
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had to close their factories for a time
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as they dealt with the coronavirus impact.
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- [Narrator] But Apple
stock quickly bounced back.
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In the U S the federal reserve enacted
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a colossal stimulus plan to
pump cash into the economy,
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lifting the markets,
including stocks like Apple,
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and as people's lives changed,
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technology became even more essential.
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- How is this whole working
from home thing going for you?
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- During the pandemic
period, people were at home
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had to work and their
children had to use computers
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or tablets to be able to go to school.
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People didn't have any other entertainment
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other than what they could do at home.
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So they were watching more TV programming
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and streaming music and downloading apps.
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All of that benefited Apple.
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- [Narrator] On July 30th, Apple
released an earnings report
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that highlighted an 11%
increase in revenue.
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In April, we expected year over
year performance to worsen,
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but we saw better than expected
demand in may and June.
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We attribute this increase in demand
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to several interactive causes,
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including a strong iPhone SE launch,
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continued economic stimulus.
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- [Narrator] Following the news,
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Apple shares continued to balloon
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and on August 19th,
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the company reached a
$2 trillion market cap
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for the first time ever
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becoming the most valuable
publicly traded company
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in the world.
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- At this point,
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few people would bet
against Apple's ability
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to execute, but at the same time,
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there's no guarantee
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that the stock is gonna keep
going up the way it has.
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Apple faces a number of
significant challenges
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on the regulatory front,
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it's a subject of antitrust investigations
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in the US and Europe,
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it's also at war with
a number of companies
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that are criticizing it
over its business practices
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in the app store and elsewhere.
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And it's more exposed than probably
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any other American company
to the US China trade Wars.
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- [Narrator] In the midst
of a volatile market,
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Apple shares continue to see big swings.
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