Monday, February 13, 2012

The Apple effect on equity markets

Zero Hedge points to the astonishing impact of the performance of Apple Inc on the technology sector stocks. The graphic captures the earnings per share of S&P 500 technology firms with and without Apple.



Tyler Durden is spot on in his assessment of the concern arising from this graphic,
While ignoring Apple as a provider of 'wealth' is akin to Monty Python's "What Have The Romans Ever Done For Us?" comment, we worry that so much 'expectations' burden should fall on the shoulders of a company that relies on constant 'successful' innovation and constant low cost wages (no growth) to merely maintain current growth and earnings while facing constant and massive competitive threats from every side of its business.
Update 1 (29/1/2015)

WSJ has this summary of Apple's mind numbing results for the last quarter of 2014. Barry Ritholtz writes,
Apple’s net profit of $18 billion is an astonishing gain of 38 percent over the already-huge $13.1 billion in the same quarter last year... Earnings per share rose 48 percent on revenue of $74.6 billion, up a staggering 30 percent... the company’s flagship product, the iPhone sold an astonishing 74.5 million of them in the quarter, a gain of 46 percent from the same quarter a year earlier. What's more, the phones sold for an average of $687... Apple sold 34,000 phones an hour, 24/7. Revenue in China rose 70 percent to $16.1 billion, making it Apple’s third-largest market by sales, after the U.S. and Europe.
See also this article on how Apple has managed to create an eco-system of innovations around the iPhone.

1 comment:

KP said...

Dear Gulzar,

Thanks, this is a startling statistic.

An entire social system predicated on "innovation" and drawing a straight line between education and success / value and individual winner take it all wealth - this kind of stat grounds the hyper-reality that is being sold through simplistic axioms of management / policy education.

American faith even as they are being roiled by the system they created may unravel. We can see this as a tapering off of an absurdly large endowment effect among nations, a consequence of historical events - or the beginning of a global shift due to the levelling off of competitive adavantages in technology.

Interesting stat all the same - to speculate!

regards,KP.