Alphabet (Google) passes Apple as most valuable firm after hours
Alphabet passes Apple as most valuable firm after hours
Ari Levy 5 Hours Ago
Google parent Alphabet was set to pass Apple as the most
valuable company in the world on Tuesday. At Monday's after-hours levels (which
technically reflect an indication, but not the real-world value), Alphabet's
market cap would roughly be $570 billion, eclipsing Apple's current market cap
of about $535 billion.
The last time Google was more valuable than Apple was in
February 2010, when both companies were worth less than $200 billion. At the
time, Apple had yet to release its first iPad, the newest iPhone on the market
was the 3GS, and the Mac was the company's biggest product for one-third of
revenue. Steve Jobs was still at the helm.
Google was being guided by Eric Schmidt, who would hand
control back to co-founder Larry Page the following year. The company was a
little more than half its current size.
Apple and Google actually flip-flopped multiple times
between 2008 and early 2010, before Apple went on a historic tear, jumping from
$180 billion in value to over $650 billion in September 2012. At that point,
the two companies were separated by over $400 billion. In 2011, Apple passed
Exxon to become the world's most valuable company.
It's hard to believe that Google was the more valuable
company from the time of its IPO in 2004 until April 2008. Then iPhone madness
began.
Google's latest rise versus Apple began in July. From
that point through the end of 2015, its shares soared 44 percent, while Apple's
sank 16 percent.
Apple's main problem is its reliance on the iPhone, which
now accounts for two-thirds of revenue. It's a massive business, but sales in
the fiscal first quarter increased only 1 percent from a year earlier, while
iPad and Mac revenue dropped. Investors are concerned that unless Apple changes
course and decides to compete with lower cost Android manufacturers on price,
the iPhone's best days are in the past.
Meanwhile, Google is convincing investors that in the
transition from Web to mobile it will maintain its dominance. According to
eMarketer, Google is poised to capture 32 percent of the mobile ad market this
year and next, staying well ahead of Facebook, which is around 20 percent. The
company generates so much profit from its digital ad business that it can
invest in all sorts of potential growth areas, namely autonomous driving and extending
life.
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