Good morning. David Meyer here, filling in for Alan from Berlin.
Well, it’s happened. Apple is now officially the first trillion-dollar American company, after its stock price ended yesterday at $207.39. The first trillion-dollar company in the world was Petrochina, albeit briefly, when it first floated back in 2007 (and before it lost $800 billion in value over the next decade.) For comparison’s sake, Amazon is worth $877 billion, Alphabet $851 billion and Microsoft $822 billion.
CEO Tim Cook celebrated the moment in an all-staff memo by acknowledging it as a “significant milestone” that gives Apple’s workers “much to be proud of,” while adding that it is “not the most important measure” of Apple’s success.
“Financial returns are simply the result of Apple’s innovation, putting our products and customers first, and always staying true to our values,” Cook wrote. He’s right. It’s extremely difficult to avoid comparing Apple’s good fortunes with the recent slump at Facebook, which can be crudely summed up as the result of the social network’s user-exploiting ways catching up with it.
To be clear, Apple has never been shy of squeezing as much cash out of its customers as possible—I write this as someone who recently uttered soft curses as he paid €50 ($57.83) for an official Apple charger and cord (sold separately, naturally) for his iPad. The company’s valuation followed stellar results that were the result not of selling a ton more devices, but of charging more for them.
But Apple’s premium pricing is clear and on the level. There’s no you-are-the-product trickery going on with the core business model here—you’re buying the product, for a lot of money. That’s not only fair; it’s a more sustainable approach, too, and perhaps even admirably old-fashioned. Indeed, although Apple does provide some limited ad-targeting capabilities based on App Store and News app usage, its heavy pro-privacy stance has led marketers to complain that it doesn’t collect enough data on its customers for their liking, leaving advertisers feeling like “second-class citizens.”
Cook didn’t invent that approach, but his stewardship of the company has been admirable, as borne out by the increase of over 285% in Apple’s share price since he took over. I lost count of the number of times I saw people excoriate the former COO for not being Steve Jobs, while claiming that Apple’s innovation has stagnated since the firm’s co-founder passed away in 2011. Perhaps there’s some truth in that, but the fact is that Apple continues to refine its products in ways that customers like, while largely treating those customers with respect.
I’m no Apple fanboy—I’m an old-school ThinkPad guy and I’ll take the nice midrange Android phone with expandable storage, thanks—but there can be little argument now about the direction Cook chose to take.
Happy weekend, all. More news below.
Elon Musk’s SpaceX will make a crewed test flight for NASA in April next year, slightly ahead of Boeing, the other company that has a contract with the space agency for getting U.S. astronauts to the International Space Station. The Americans have been hitching a ride up to the ISS with the Russians since 2011, but have no more Soyuz seats booked after November next year. Fortune
China and Iran
The U.S. asked China to cut its oil imports from Iran, and China reportedly said no. While this somewhat undermines President Donald Trump’s efforts to isolate Iran, China apparently did agree not to increase its purchases of Iranian crude at a time when there’s about to be an excess of the stuff, looking for a buyer. Bloomberg
The White House has proposed freezing fuel efficiency standards for cars as of 2020, which effectively means immediately, as automakers have already designed the vehicles that will come out in a few years’ time. The U.S. has been progressively strengthening fuel efficiency standards for over four decades, and states such as California have tough standards for cars and trucks while providing incentives for buying electric and hydrogen vehicles, in order to improve air quality. If the EPA gets its way, all that will be over. The Atlantic
Toyota’s quarterly profits were up 7.2% year-on-year, surprising analysts who expected flat earnings. The Japanese car manufacturer has been selling well in Asia, particularly in Thailand, and making cost reductions at home. Operating income was up just shy of 19%. However, wary of potential U.S. tariffs on imported cars, Toyota slightly downgraded its sales forecasts for the year to March 2019. BBC
Around the Water Cooler
“We continue to see a pervasive messaging campaign by Russia to try to weaken and divide the United States” ahead of the midterms. That’s Director of National Intelligence Dan Coats, briefing the press yesterday. Coats said President Trump had told the nation’s intelligence officials to make election hacking a “top priority,” and that the country is “doing everything we can to have a legitimate election that the American people can have trust in.” Wall Street Journal
Japan can now claim the world’s second-biggest stock market, after Chinese stocks lost $2.29 trillion since January. Japanese equities are now worth $6.16 trillion, and Chinese equities $6.09 trillion (their high was in mid-2015, when they peaked at $10 trillion.) The U.S. stock market is worth $31 trillion. China overtook Japan in 2014, but then the trade war happened. Financial Times
Comcast and Amazon
Amazon’s Prime Video service will be made available on Comcast’s Xfinity X1 set-top box later this year. It’s a risky move for Comcast, as its customers will be able to buy a-la-carte subscriptions for channels such as HBO, Cinemax and Showtime without purchasing an add-on to their cable subscription. Fortune
Chase says almost all of its 16,000 ATMs around the U.S. now allow people to withdraw cash using their mobile wallet rather than a physical debit card, by simply tapping their handsets on the machine. “Cardless no longer means cashless,” said Sol Gindi, the bank’s chief administrative officer of consumer banking. Fox Business