Tech giant Apple has become the first private-sector company in history to hit a stock market valuation of one trillion dollars.
The reaching of the milestone on Thursday crowned a decade-long rise fuelled by its ubiquitous iPhone that transformed the US company from a niche player in personal computers into a global powerhouse spanning entertainment and communications.
Its stock jumped 2.8 percent to as high as $207.05, bringing its gain to about nine percent since Tuesday when its reported June-quarter results above expectations and said it bought back $20bn of its own shares.
Apple’s revenue in the fiscal third quarter soared 17 percent to $53.3bn from the same period a year earlier on the back of sales of pricier iPhones, online services and wearable devices.
Since starting out in a family garage in California’s Silicon Valley more than 40 years ago, Apple weathered boardroom drama, market missteps, and even a close call with bankruptcy on its path to the milestone, thanks to products that radically transformed lifestyles and the way we communicate with each other.
Al Jazeera’s Kristen Saloomey, reporting from New York, said there was some concern that Apple, a company known for its hardware, had little room left to grow given saturation in the mobile-phone market.
“But its latest earnings report put that worry to rest,” she added, noting that the rise was driven by strong demand for its expensive phone, the iPhone X.
“It’s not just hardware behind the company’s success. The tech giant is also seeing growth in its services business, which includes the App Store, Apple Music and Apple Pay. Sixty percent of the company’s sales are international and every region except Japan reported double-digit growth.
“This is the fourth quarter in a row of double-digit growth for Apple, pushing it into trillion-dollar territory at a time when other tech stocks like Facebook and Twitter have struggled.”
Creative Strategies analyst Carolina Milanesi told AFP news agency that Apple’s symbolic stock market accomplishment was a “natural result” given the tech company’s winning steps, and is “certainly not the finish line”.
Apple has sold more than a billion iPhones. The handsets account for more than half of the Cupertino-based company’s revenue.
However, iPhones accounted for 14.7 percent of the smartphones sold in 2017, while South Korean consumer electronics behemoth Samsung had 21.6 percent of that market, according to industry tracker IDC.
Apple shipped 41.3 million iPhones, claiming 12.1 percent of the global market compared with 20.9 percent for Samsung and 15.8 percent for Huawei.
Apple has seen sales of Mac computers grow despite an overall shrinking in the market.
Since the death of renowned Apple cofounder and pitchman Steve Jobs in 2011, analysts have watched for the company to impress the world with the next “big thing” that will shake up culture and drive revenue streams like the Macintosh, the iPod or the iPhone.
While that kind of innovation has yet to reach store shelves, Apple has consistently defied dour predictions.
In early May, Apple unveiled a new $100bn share buyback plan, alleviating worries about the iPhone’s prospects and a hit from US-China trade tensions.
The company has managed to notch higher revenues, even when iPhone sales fall shy of expectations due to a trend of Apple making more money off each handset.
Tim Cook, Apple chief executive, has remained firmly bullish, touting the company’s product pipeline and championing good sales of the iPhone X, a recently unveiled model whose $1,000 price tag analysts worried would be excessive.
Moving to the cloud
Apple has managed to grow despite bruises to its image that included being accused of keeping young people addicted to smartphones, slowing performance of older iPhones to motivate upgrades and sidestepping taxes by nestling cash in offshore havens.
It has spotlighted the growing amount of money it takes in from music, applications, games, subscriptions and services it sells to people using its devices.
Money made from services is seen as an important element of diversification away from having to rely heavily on selling iPhones.
Rises in services revenue have come with jumps in Apple Pay, Apple Music and other programs.
“It is not just about inventing new products, it is about delivering more value to current products through services and apps that can deliver revenue,” said analyst Milanesi.
“I think the biggest challenge for Apple will be the move to the cloud, as Apple does not own the cloud in the same way Google, Amazon and Microsoft do.”