On January 3rd 2022, Apple became the first US company to be valued at over $3tn. The tech giant continued its incredible share price growth, tripling in value in under four years and growing faster than the US economy. Furthermore, since the beginning of 2021, its share prices have risen astronomically, by 38 percent.
Despite the global pandemic, Apple has continued its rapid growth, representing one of the most significant success stories in history. The new valuation is an unprecedented achievement considering the worldwide state of perpetual lockdowns.
Apple are at an automatic advantage by virtue of being a market leader and household name, however, there are still learnings for aspiring tech leaders.
Updating product lines is key
Diversification and constant product updates keep customers interested and inspired. Becoming complacent and relying on stalwart products is a recipe for disaster. As a fast-moving industry, being adaptable is key. While of course offering reliable, fit-for-purpose products will retain market share, people are always looking for innovation and invest, primarily, in the ‘cream of the crop’.
Technology is a sector which is home to many pioneering engineers and thinkers, and so it is prudent to keep up with trends and stay ahead of the curve. Wherever the market heads is usually dictated by the consumer, so keeping abreast of popular opinion is key.
Maximising monetisation of customer base
The move to increase revenue streams is an important lesson that can be taken from Apple’s strategy. Their physical products aside, they receive revenue through a range of other pathways such as their App Store, Apple Music, iCloud storage, Apple TV+, AppleCare, and Apple Pay. Not only are they tapping into multiple submarkets such as insurance, data storage, and streaming services, they have in turn created an integrated ‘universe’ of products and services that complement each other.
This is effectively a sophisticated way of achieving the simple business basic of adding value. If a product is valuable, that draws in customers. If the experience of using said product combined with other streamlined services is improved, then the likelihood of customer loyalty is dramatically increased.
Taking risks in innovation
Convenience is the order of the day when considering technology purchases, and Apple leads the way in achieving this goal. Risk taking is also a way in which Apple have achieved success on this front. For example, the launch of AirPods was met with criticism and even mockery, with the assertion they would be inconvenient and impractical. Fast forward to 2018 and AirPods hold a staggering 60% of the global wireless airbud market.
It is this combination of risk taking and striving for user-friendly, accessible products which has catapulted Apple to this historic valuation. Aspiring tech leaders should draw from Apple’s customer centric strategies and offerings in order to emulate the trajectory within the sector.
What does the valuation mean for Apple and the industry at large?
A $3tn valuation indicates there are no signs of slowing down for Apple. With an unquestionably large market share, highly loyal customer base and propensity for innovation, they remain one of the most iconic brands of our time. A company reaching such a high valuation during a global pandemic also indicates how crucial the industry is within modern society.
In a post pandemic world where certain aspects of living, working, and learning are set to remain reliant on technology, the market is likely to see continual rapid growth. Apple is a good indicator of what is to come for the market and the success of their model should not be underestimated.