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Business Management

Apple's $700bn market cap and the spectacular rise of the tech economy

Apple’s brief passing of the $700bn mark in market capitalisation underlines a burgeoning disparity between giants and others in technology culture that is arguably detrimental to long-term innovation, according to pessimists. I prefer to see it as a luminous summit that shows how far tech companies have come and a beacon for the latest dreamers and seers.

That $700bn valuation makes Apple the most “valuable” company in US history. The quote marks are needed because market cap is really not much more than a ready reckoner used by the stock market to create a league table of the most powerful companies in descending order of clout. And of course you could make moral and ethical arguments to say other companies have given more to our world, or disagree with the way Wall Street runs its numbers. But there it is: an approximation of the amount of cash and equivalents you would need to get even close to buying the company. 

It’s a remarkable comeback story of course and for those of us in our middle age it might seem only yesterday that Apple was a niche company, a historical curiosity, a business strategy warning case study and potential bankrupt. Remarkably, that $700bn mark makes Apple “worth” (again with those curly quotes) two Microsofts.

Regulators will ensure that Apple can’t go buying up its biggest rivals like a money-drunk Monopoly player rubbing it in the face of fellow players. But some say that the rise of the tech megacorps puts a chill on innovation because new entrants can no longer compete against the skyscraper incumbents.

That’s baloney though. Lots of small companies cash in their chips and sell their engineering talent, intellectual property and accounts to bigger companies. But the rise of Google, Facebook, ARM, VMware, eBay, Amazon and a thousand others more recently (Box, Dropbox, Spotify, Alibaba) suggests that we have a hugely competitive technology economy that is expanding and globalising rather than being cowed by dominant powers. Indeed if other sectors want to look at how you create a healthy environment where young and old companies can prosper, look no further.

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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