China’s Huawei may have toppled Apple from the second spot in terms of smartphone shipments last quarter, but there’s still a huge reason for the American tech giant to rejoice. It just made history by hitting the $1-trillion market capitalization. Market cap is the market value of a company’s outstanding shares.
Apple is not the first company to hit the trillion-dollar mark; Chinese oil and gas company PetroChina — which is now worth about $220 billion — reached that milestone in 2007. However, Apple is the first U.S. firm to do so, making it the most valuable publicly traded company today. In second place is Amazon with a market cap of $884.86 billion, and in third is Google’s Alphabet, valued at $854.49 billion.
This development came after Apple released its record $53.3 billion third-quarter 2018 earnings, which beat analysts’ expectations. About 60 percent of the revenues was driven by the iPhone.
And while Apple sold relatively the same number of iPhones as the same period last year, the average selling price of the device rose to $724, hence the increase in profits. Only Apple has been able to do that consistently thus far.
Interestingly, the company was able to diversify the sources of its earnings. Roughly $10 billion was made from services such as App Store, AppleCare, Apple Music, and iCloud. According to CEO Tim Cook, the wearables division is growing, too; it has become a $10-billion annual business for Apple.
What’s next for the manufacturer? Can it grow beyond its $1-trillion market value? How affected will it be if the trade war between the United States and China continues? We’ll probably know soon enough.
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