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Apple to $2 Trillion and Beyond

Apple’s market cap hit $2 trillion. The milestone is an opportunity for us to look back and look forward.

The company has executed beyond our wildest dreams when we started covering Apple in 2004. More importantly, we believe the company’s best days are still ahead. More and more, Apple will positively impact our lives.

A look back to the golden geese

Apple’s foundation as a $2 trillion company has, of course, been laid brick by brick over the past 44 years. During that time, the company has followed an under-appreciated playbook: build high-quality products that enrich lives, then do the hard part; reinvent yourself every decade.

Walking away from or deemphasizing a golden goose product line to forge into a new market has become Apple’s signature approach. Looking back, the migration from one golden goose to the next has been obvious: first with the Mac, then to a device company with iPod, to a mobile company with iPhone, and more recently to a services company. Each new golden goose has been a game-changing improvement on a similar product already in the market. In fact, Apple is rarely the first company to a market, which gives them time to learn from the competition and, ultimately, enter a market that is still nascent with a superior product.

A look forward to $3 Trillion

Three years ago, it was hard for many to imagine that Apple would reach a $1 trillion market cap. Two years ago, it was equally difficult for some to imagine $2 trillion. While we understand that, for some investors, $3 trillion is even harder to envision, we believe there is a clear path to that next milestone. The path to $3 trillion starts with the fact that the world has changed. Apple’s current and future golden geese (wellness, AR, autonomous systems) are becoming more central to our lives in this new world. We believe the following products and themes will move Apple beyond $2 trillion over the next decade:

  • 5G will drive a three-year device upgrade cycle along with 5G-related benefits of opening new mobile use cases.
  • Software and services will expand and include hardware. We believe in the years ahead Apple will offer a 360° bundle of hardware, software, and services – something only Apple can do.
  • Health will become digital, personal, and preventative: wearables for data collection, AI for analysis, and consumer software as the interface.
  • Augmented Reality will emerge as the next major computing platform with Apple Glasses available sometime around 2022.
  • Autonomous systems – while it’s unclear what form it will take, we expect Apple to make a play in autonomy.
  • Original content and streaming entertainment will garner a larger share of media consumption.
  • Apple Pay and related payment services will continue to grow.

A nod to culture and beyond

Apple is not perfect. They make mistakes like the other tech giants, like launching the iPhone exclusively on AT&T, which gave Android the oxygen it needed to get off the ground.

Building and maintaining a culture of innovation and excellence has long been an area in which Apple stands head and shoulders above the other tech giants. More recently, that culture has been sustained by Tim Cook. The roots, of course, were planted by Steve Jobs. At its most basic level, the $2 trillion milestone is a recognition of what he started.


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