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The $3 Trillion Apple
On Monday, Apple briefly became the world's first company worth $3 trillion. It's quite a feat, considering that it was just a year ago that it crossed the $2 trillion mark. It's even more impressive when you consider that the number is a sign of what investors think of the company, despite the fact that it faces multiple legal and regulatory challenges related to its control over the iPhone App Store.
You might remember the famous keynote in 2007 when Steve Jobs stood on a stage and introduced the original iPhone. At the time, Jobs called the iPhone a "breakthrough internet communications device." It was actually funny at the time. Jobs had told the audience the company was introducing three new products, a "widescreen iPod with touch controls," a "revolutionary mobile phone," and the aforementioned "breakthrough internet communications device,"
The first two products made sense. Everyone knew what an iPod was, and they could imagine what a widescreen version with a touchscreen would look like. As for a mobile phone, those had been around for some time, and observers had been expecting Apple to announce a smartphone for some time.
As for the third product, almost no one knew what Jobs meant when he talked about a "breakthrough internet communications device." It didn't take long for the audience to realize that the three products he was talking about were actually one device, though no one could have predicted the way it would change almost everything about how we communicate. That, however, is exactly what Jobs promised, and it's exactly how Apple became a $3 trillion company.
The key word there is breakthrough.
A lot of companies want you to think that the thing they're trying to sell you is a breakthrough--that it's revolutionary. They want you to think it will change your life. I hate to be the one to break it to you but a smart refrigerator isn't going to change your life. Some things might change the way you do different things, but almost none of them are a breakthrough--especially not in the way that the iPhone was.
The iPhone changed the way we interact with the world around us. In 2007, navigating the internet on your mobile phone was possible, but not particularly useful. Today, almost everything we do is online, most of it on our iPhones.
It's where we order food, read the news, listen to music, watch movies, answer emails, send messages, and take photos. It has become, for most people, the most indespensible thing they carry every day--even more so than a wallet.
Even if you use an Android smartphone, it's hard to overstate the influence the iPhone had on your life. Every smartphone maker is trying to figure out how to play a game Apple invented and is measured by how their devices compare to the iPhone.
It's almost hard to imagine how different a company Apple was when it introduced the original iPhone. At that point, the company's biggest mass-market hit was the iPod. When Jobs stood on the stage in 2007, Apple had sold a little over 100 million of the portable music players and every other company was trying to copy Apple's success. The iPod wasn't the product that saved Apple, but it was what made the company "cool" in the eyes of the public.
By contrast, Apple has sold more than 1.5 billion iOS devices, most of them iPhones. On its own, the iPhone would be the 15th largest business in the world by revenue--roughly the same size as Microsoft. It accounts for more than half of Apple's $366 billion in revenuelast year.
Not only that, the iPhone is the platform on which Apple's services business is built. Services make up another 19 percent of Apple's business, most of which is the App Store--something that wouldn't exist without the iPhone.
The App Store may be the root of most of the criticism Apple faces, but the company is counting on its services business to drive its future growth. That's why investors continue to drive up its stock price even as the company faces another antitrust investigation, this time in India.
In that light, it isn't surprising that Apple is the first company to hit $3 trillion. The iPhone is the most dominant computing platform in the world, both in terms of the number of people using one, as well as the influence it has on every device we use. The most remarkable thing is that you can straight line from those four words--that almost no one understood at the time--to Apple's success today.
The End of Silicon Valley's Most Notable Trainwreck
I also wrote about the verdict in Elizabeth Holmes' fraud trial. Holmes was found guilty on four counts of lying to investors, and my take is that it's a cautionary tale for every entrepreneur.
You can read the full story here:
Elizabeth Holmes Is the Cautionary Tale for Every Entrepreneur | Inc.com — www.inc.com Fake-it-'till-you-make-it isn't a real strategy, especially when you're asking for money.