In trading on August 2, Apple shares rose 2.8% to $207.05, which corresponds to a market capitalization of $1 trillion. The day before, Apple shares jumped 5.9% to $201.5 after the publication of quarterly reports: investors were inspired by strong demand for the iPhone, including the most expensive one, and record sales of the services division. “We are expanding our reach in emerging markets, seeing strong, double-digit revenue growth and making tremendous progress toward our goal of significantly growing our services business,” said CEO Tim Cook.

Apple expects iPhone sales to remain strong this quarter, with revenue of $60-62 billion (this would be 14-18% growth compared to the same period in 2017).

Apple's phenomenal record is due not only to the company's successful business and innovation, but also to its brand positioning. “This is the most consistent and brilliant storyteller of all the companies I know,” said the world’s leading expert on screenwriting, Robert McKee, in an interview with Vedomosti. – This is the reason why Apple dominates. Since the 1980s they created a story in the users' heads, and it pops up in the mind every time someone thinks about buying a computer."

“The Apple logo is an apple. But not simple, but bitten,” McKee noted in May at a seminar in Moscow. “It harkens back to biblical history and speaks to the company’s values – non-conformism, rebellious spirit, willingness to go against the grain.” Even the price of the Apple I computer in 1976 was symbolic - $666.66.

The first personal computers were ugly, but Apple realized that they needed to make it beautiful - for creative people, McKee explained. The brand allows Apple to earn much more from smartphones than others.

In the fourth quarter of 2017, a record $120 billion worth of smartphones were sold worldwide (data from Strategy Analytics). More than half of this money was received by Apple: its share of sales was 51%. This is also a record for the company, which just in the fourth quarter released its most expensive smartphone – the iPhone X for $999. Apple's share in supplies is noticeably smaller - 19.2%.

In the second quarter of 2018, the average price of iPhones sold was $724 (20% higher than a year earlier), largely thanks to the iPhone X.

Apple's business is also threatened by the US trade war with China, which accounts for about 20% of its sales. Her gadgets are assembled there, and the Apple Watch, headphones, and smart speaker may be subject to new US duties, FT wrote. Morgan Stanley names conflict among the main risks for Apple shares.

Alexey Nevelsky and Valery Kodachigov participated in the preparation of the article

The iPhone accounts for more than 60% of Apple's revenue, and investors are worried whether the company's business will continue to grow at its current pace (iPhone revenue declined in fiscal 2016). But Apple's other businesses are doing well.

The second source of its revenue is the sale not of computers, but of digital services. This division includes the App Store, the iCloud cloud service and streaming Apple Music; its revenue in the second quarter grew by 31% to $9.5 billion.

Apple's services revenue has grown at an average annual rate of 23% since 2006, the FT quotes Loup Ventures' Gene Munster as saying: If investors valued this unit the same way as Adobe , Dropbox and other software-as-a-service developers (in 10 times more than expected revenue), it would cost more than $380 billion.

In the BrandZ ranking of global brands, compiled by Kantar Millward Brown, a division of the advertising group WPP, the Apple brand is valued at $300.6 billion (Google takes first place with $302 billion).

In addition to Microsoft, other American technology giants are also approaching the $1 trillion mark: Alphabet, which briefly overtook Apple in 2016 (it is now worth $853 billion), and Amazon ($877 billion).

“When I was returning to the United States in April, a border guard, hearing that I was a global market strategist, asked: “Which company do you think will get to $1 trillion first—Apple or Amazon?” – said Jon Treacy, co-publisher of the investment newsletter Fuller Treacy Money. – His question showed how popular this topic is. I answered Amazon, because smartphone sales are peaking and Amazon has more business areas. Now it seems that I was wrong."

At the peak of the tech boom two decades ago, the most valuable company was Microsoft : in December 1999, its capitalization was $620.6 billion, according to S&P. In nominal terms, Apple overtook Microsoft in August 2012, but now it exceeds it in value and in real terms: in today's prices, Microsoft's then capitalization is $933.2 billion. Now Microsoft is worth $815.9 billion.

Analysts at Morgan Stanley called services sales "the main growth driver" for Apple. “Greater predictability and margins from services sales” will help Apple shares rise to $200, said analyst Kate Huberty.

But for most, Apple's value is tied directly to the iPhone, Munster and other experts acknowledge.

“We need to do it beautifully”

How Apple grew
April 1, 1976 In Santa Clara, California, a partnership agreement was signed to create Apple Computer, under which Steve Jobs and Steve Wozniak each owned 45% of the company's shares, and Ronald Wayne the remaining 10%....
Read in full

How Apple grew

April 1, 1976 In Santa Clara, California, a partnership agreement was signed to create Apple Computer, under which Steve Jobs and Steve Wozniak each owned 45% of the company's shares, and Ronald Wayne the remaining 10%. On April 12, 1976, Wayne sold his interest for $800. He soon received a check for $1,500 for renouncing any claims against the company. January 3, 1977 Apple is registered in the state of California, USA. June 5, 1977 The first mass-produced personal computer, the Apple II, went on sale. On December 12, 1980, Apple held its IPO. The company placed 4.6 million shares at $22. 1981 Steve Wozniak retired from working for the company due to an injury in a plane crash. 1984 Apple introduced the new 32-bit Macintosh computer. 1985 Jobs left the company due to disagreements with new CEO John Sculley. December 1996 Apple decides to buy Jobs' company NextSoftware, which developed its own operating system NeXTSTEP, for $429 million. 2000 Jobs became permanent CEO. Before that, he was an unpaid adviser to the company and then interim CEO. 2001 Apple introduced the OS X operating system based on NeXTSTEP. iPod mp3 players were launched. 2003 The company launched the iTunes online music store. Apple introduced the first smartphone – iPhone. April 3, 2010 The company introduced the iPad tablet computer. On October 6, 2011, Jobs died at the age of 56. April 24, 2015 The Apple Watch computer wristwatch went on sale. Sources: company data, TASS dossier, media publications

One Apple is:
13.2 of Sberbank or 14.3 of Rosneft, or 16.5 of Lukoil, or 18.7 of Gazprom, or 94.3 of Yandex, or 1.6 of the Moscow Exchange stock market, or 0.65 of Russia’s GDP for 2017...
Read in full

One Apple is:

13.2 Sberbank or
14.3 "Rosneft", or
16.5 Lukoil, or
18.7 Gazprom, or
94.3 Yandex, or
1.6 Moscow Exchange stock market, or
0.65 Russian GDP for 2017
Source: Moscow Exchange data as of August 1, 2018, IMF, Vedomosti

You need to be different

Many are skeptical about this assessment, but Apple is trying to draw their attention to this business. In January 2016, it reported that the number of active users of its devices (including tablets, smart watches and set-top boxes) to which it can sell services exceeds 1 billion. Now it is already more than 1.3 billion. The services division has a goal of bringing revenue to $50 billion by 2020

However, only until the new iPhone appears in September.

“We need to do it beautifully”

How Apple grew April 1, 1976 In Santa Clara, California, a partnership agreement was signed to create Apple Computer, under which Steve Jobs and Steve Wozniak each owned 45% of the company's shares, and Ronald Wayne the remaining 10%.... Read in full

One Apple is: 13.2 of Sberbank or 14.3 of Rosneft, or 16.5 of Lukoil, or 18.7 of Gazprom, or 94.3 of Yandex, or 1.6 of the Moscow Exchange stock market, or 0.65 of Russia’s GDP for 2017... Read in full

You need to be different

How Apple grew
April 1, 1976 In Santa Clara, California, a partnership agreement was signed to create Apple Computer, under which Steve Jobs and Steve Wozniak each owned 45% of the company's shares, and Ronald Wayne the remaining 10%....
Read in full

One Apple is:
13.2 of Sberbank or 14.3 of Rosneft, or 16.5 of Lukoil, or 18.7 of Gazprom, or 94.3 of Yandex, or 1.6 of the Moscow Exchange stock market, or 0.65 of Russia’s GDP for 2017...
Read in full

Apple's market value reaches $1 trillion