Apple Inc.: The tech giant ahead of the curve

written on August 12, 2020

Bursting into the scene to make personal computers mainstream and going head-to-head with other tech giants like the likes of IBM and Hewlett-Packard, Apple Inc. emerged as one of the first US companies to hit the $1 trillion cap. After going through years of failures, struggles and accomplishments, it has become the brand of choice for billions of consumers around the world, amassing an army of loyal fans along the way who purchase everything the company produces no matter the price tag.

As it continues to wow the world with its innovative products and services, Apple’s role in the industry is unbeatable with its stock having generated a total return of more than 77,680% since 1998. Marking growth even during one of the toughest years on record, it appears that Apple won’t be going anywhere in the foreseeable future.

A brief history of Apple

Famously founded in Steve Jobs’ garage in Palo Alto in 1976, Jobs together with Apple’s other co-founders, Steve Wozniak and Ronald Wayne began with the production of the hand-built Apple I personal computer which initially sold for $666.66, an odd price attributed to Wozniak’s liking for repeated digits and due to a one-third markup on the $500 wholesale price. From 1977 to 1980, Apple’s sales rose to $118 million, an annual growth rate of more than 500%. 

Next, the 'two Steves’ as they were fondly referred to, together with Mike Markkula designed and marketed the Apple II series of computers, the first commercially successful line of personal computers which eventually led to the Apple Lisa in 1983, the primary computer to use a mouse-driven graphical user interface (GUI).    

For more than three decades, Apple was mainly a manufacturer of computers such as the Macintosh and Power Mac lines, but it faced stiff competition in the 80s and rocky sales and low market share during the 90s. This together with the ousting of Jobs from the company and its attempt to expand its business with new devices that flopped, saw its shares lose 76% of their value.

When Jobs returned in 1996 after his company NeXT was bought by Apple, he introduced the original iMac, while with the turn of the millennium came the iPod, the iTunes Music store and eventually the iPad, iPhone and Apple watch. Around 100 million iPods were sold in the first six years since it was launched, while the iPhone became the best-selling product of all time, making Apple the technology that everyone wanted to own. 

By 2015, Apple was the largest publicly traded company in the world by market capitalisation and by 2018, it had an estimated value of $1 trillion.

Fun Fact 

Apple originally had three co-founders. The third co-founder, a man named Ronald Wayne, had joined co-founders, Steve Jobs and Steve Wozniak but left the company only 12 days after it was founded. He sold his 10% share for only $800 and got an additional payout of $1,500. Had Wayne stayed with the company, his shares would be worth today around $60 billion!

Apple goes public 

Apple (AAPL) went public in December 1980 at a price of $22 per share. The IPO was far more successful in comparison to that by some of the leading brands at the time, so much so that its $4.6million shares sold out immediately. This generated a huge sum of investment which greatly helped the company propel itself to a new era. By the mid-1980s, the share price had grown to around $83. 
In 2018, Apple closed at $200.48. This means that an initial investment of $220 in 22 shares would be worth $112,268.8, excluding dividends. 

Apple’s shares split 

The company’s shares have split four times since it went public. The stock split on a 2-for-1 basis in 1987, 2000, 2005 and on a 7-for-1 basis in 2014, which means that you would have received two shares for every one share and seven shares for every one respectively. But despite receiving more shares, the stock price is slashed proportionally so that the value of your investment remains the same.

In July 2020, Apple (AAPL) announced its fifth stock split in its history as its stock price marched to the $400 level. Although it would not have an impact on its fundamentals or market value, the split would help the company appeal to a broader base of investors, particularly those who find it difficult to buy a stock with a triple digit price. Each share owned by an investor today will turn into four shares, while the stock price will be quartered from about $400 to around $100 once the split takes place. Its dividends will also be quartered to reflect the share change following the split.

Marking a strong June-ending quarter in 2020 with sales up by 11% in both products and services despite Covid-19 disruptions and widespread retail closures, Apple continues blowing away analysts’ estimates, making it a buying opportunity worth considering. 

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Figures quoted relate to past performance and are not indicative of future performance. Performance figures are indicative as sourced from Bloomberg. CCTrader is brought to you by Calamatta Cuschieri and is licensed by the MFSA. C13729. CCTrader offers direct market access and speed of execution and is intended for knowledgeable and experienced individuals taking their own investment decisions. The value of investments may go up and down and currency fluctuations may also affect investment performance.

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Life’s full of mysteries. Your money shouldn’t be one of them.