A company that started in a garage more than four decades ago became the first American publicly traded company to reach a $1 trillion valuation.
Shares hit $207.05 midday Thursday to crack the historic milestone. There have been expectations in the past that the company’s value would hit this level, but the path has been far from certain.
In April, Apple’s stock hovered in the $160-$170 range amid worries of lowered demand for iPhones, Apple’s flagship product that accounts for over 60 percent of its revenue.
Earlier this week, the company released its third-quarter earnings report. According to Apple CEO Tim Cook, it was “Apple’s best June quarter ever and our fourth consecutive quarter of double-digit revenue growth.” Revenue increased 17 percent to $53.3 billion.
Apple’s software and services revenue, including the App Store, which recently turned 10 years old on July 10, along with Apple Music and cloud services, jumped 31 percent year-over-year. So far this year, Apple has sold 134.54 million iPhones.
“It’s simply a testimony to how they’ve become a fabric of our lives, and it’s also a testimony to Steve Jobs’ vision,” says analyst Gene Munster.
Apple was founded in a Silicon Valley garage by college dropouts Steve Jobs and Steve Wozniak and their friend Ronald Wayne in 1976. Apple had its initial public offering on Dec. 12, 1980.
As for what Jobs would say of Apple’s valuation, Munster says “he’d be very proud of what he had helped build. … He would’ve come in the next day and said, ‘How are we going to make beautiful products?’ I don’t think it would change anything.”
With this historic valuation, Apple beats its closest market cap-competitor Amazon in the race to $1 trillion. This valuation makes Apple more valuable than the GDP of all but 16 countries, according to data from the International Monetary Fund.
Apple was famously led for years by its visionary co-founder Steve Jobs. Apple’s first product, all hand-built by Wozniak, was the Apple-1, basically a DIY computer without a case. After securing funding and getting the iconic Apple logo designed, they continued to make products like the Macintosh, the company’s first mass-market computer. The ad that announced it, “1984,” is considered one of the greatest ads of all time.
“It didn’t just change Apple, it changed the whole computer industry,” Jobs said of the Macintosh in 2007.
Not long after the success of the Macintosh, Jobs clashed with then-CEO John Sculley, arguing that the company should focus more on the consumer when developing products. According to Walter Isaacson’s 2011 biography, Jobs was “frequently obnoxious, rude, selfish, and nasty to other people,” which the “polite to a fault” Sculley disliked. A boardroom battle resulted in Jobs’ resignation from the company, and Apple began to falter. But when Apple bought NeXT in 1997, the company Jobs worked on in his absence from Apple, he returned to the company he co-founded and helped it restructure.
The company then began to rebrand, releasing the iMac in 1998 and the “clamshell” iBook in 1999, both in multiple bright colors in contrast to the beige computers of the day. The iMac returned Apple to profitability after the brink of bankruptcy. Mac computers enjoyed continued success with the popular MacBook’s debut in 2006.
Jobs was a cult of personality synonymous with Apple Inc. With his trademark uniform of a black turtleneck, blue jeans, and New Balance sneakers, he captivated keynote address audiences with his proclamations of the magnificence of new Apple products.
Jobs’ biggest consumer devices were the iPod, the iPhone, and the iPad, released in 2001, 2007, and 2010, respectively. While they weren’t the first music player, smartphone or tablet on the market, they embodied Jobs’ famous mantra, “People don’t know what they want until you show it to them,” and revolutionized their respective product categories.
The iPod changed how people listen to and buy music, the iPhone changed how we communicate with others, and the iPad changed what it meant to have a computer in your hands.
“Right there, holding the internet in your hands — it’s an incredible experience,” Jobs said at the iPad’s announcement.
Tim Cook became CEO just six weeks before Jobs passed away on Oct. 5, 2011.
Jobs told consumers what they wanted, but Cook made sure it got to the consumer as efficiently as possible. Prior to being named CEO, he developed a reputation as a whiz in efficiency as Chief Operating Officer. Under his leadership, the iPhone has been persistently popular around the world, reaching over 1.4 billion units sold. Apple services like the App Store and Apple Music have grown consistently, and consumers have been taking to new products like the Apple Watch, which debuted in 2015 and has made Apple the biggest watchmaker in the world by revenue, according to research firm Asymco.
“Tim Cook is an ideal example of sticking to what you believe in rather than listening to the masses,” says Munster. “Being hyper-focused on the details and making products and services relentlessly better versus drifting and being distracted by other things defines Tim Cook’s genius.”
The historic valuation Apple reached Thursday is a culmination of the “Think Different” motto of its 1997 ad campaign featuring the famous “Crazy Ones” ad. Its black-and-white footage of 17 iconic 20th century personalities like Albert Einstein and Martin Luther King Jr. began with, “Here’s to the crazy ones,” and ended saying, “while some may see them as the crazy ones, we see genius, because the people who are crazy enough to think they can change the world, are the ones who do.”