By Philip Elmer-DeWitt
February 26, 2012

Is it a flash in the pan or one of those rare companies that defines an era?

Investors, analysts and business historians have been struggling in the weeks since Apple’s (AAPL) most recent earnings report to make sense of this corporate oddity: a mega-cap company ($487.1 billion) that grows like a start-up (first quarter earnings up 115.7%).

Since  November, when it pulled decisively away from Exxon Mobil (XOM), Apple has been the world’s biggest company by market capitalization — only the 11th since 1926 to achieve the top spot, according to Howard Silverblatt of Standard & Poor’s.

Silverblatt’s first instinct — like that of many analysts who follow the company — is to treat Apple as an exception, an anomaly that has temporarily distorted their financial models. So he pulls Apple out of his spreadsheets to point out via Barron’s that:

  • The S&P 500 is up 1.55% over the last year, but would only be up 0.47% without Apple.
  • The S&P 500 is up 8.24% year-to-date, but would be up 7.7% without it.
  • The S&P 500 technology sector is up 9.81% since October 2007, but without Apple it is actually down 4.1%.

Silverblatt’s point is that without Apple, the economic recovery wouldn’t look so rosy.

But what if Silverblatt and the others have it backward? What if Apple, rather than being the exception, is the rule that defines a new era in business?

That’s the question Asymco‘s Horace Dediu tackles about two thirds of the way through last week’s episode of his The Critical Path podcast.

Previous market leaders, like GM (GM) and IBM (IBM), he argues, were not there to make up for the deficiencies of the rest of the economy. They were the engines of growth for their era, redefining our ideas about marketing and productivity and changing business processes across whole industries. Similarly, he says…

Apple is teaching the world how to be a good company, and they’re doing it in a spectacular way — it’s almost blinding.

It’s easy to say well, once they fade, we’ll go back. But we’ll never go back.

What Apple teaches us today, everyone will do the same thing in a few years. And that includes what I talked about in terms of manufacturing, in terms of ecosystems, in terms of brands, in terms of innovation and the process of self-cannibalization…

It’s not that Apple is the exception to the rule, it’s that Apple is redefining what the rule is.

It’s a fascinating argument, worth following in full. You can get it on Dan Benjamin’s 5by5 podcast network — The Critical Path, Episode 26: Zeitgeist — starting at the 41:15 mark.

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