The apple value increases rapidly during the pandemic, and there are so many secret sauces that you can figure out from the business aspect for this case.
Apple reaches $1 trillion in value in 8/2018, 42 years after its founding.
And at the beginning of the pandemic, the value of the company falls down to under $1 trillion in the middle of March before going to double to $2 trillion on Wednesday 19/08/2020.
Everything just happens in 21 weeks.
So actually, what happened that makes this company gain massive value during this tough time — in the middle of a pandemic — when thousands of other companies declared bankruptcy?
This is a big question that I wondered about myself a lot after I read the news about the value of Apple getting over $2 trillion last week.
And it encouraged me to do tons of research about this company and figure out 3 very interesting lessons about how this company can reach that big size to share with you in my Wiki Business blog series.
1. Diversity the Products
When you think about Apple, you have more than iPhone to talk about.
The company, founded in 1976 by Steve Jobs and Steve Wozniak, that have many decades of innovation with a lot of popular items as the Macintosh Computer, The iPod, Macbook, Ipad, Apple Watch, Apple TV, App Store, and even the streaming services for movies, news, and TV programs.
The variety of products help this brand to build an ecosystem surrounding it. An extreme advantage that doesn’t many companies have and help the customers keep buying and using more frequently the products of Apple.
When I recognize this, I look back to my room to see what I have from Apple. And even I’m not tech-savvy, I see myself are using a lot of stuff from Apple and paid for this brand a lot.
From the iPhone that I used which Apple Store installed to the Macbook Air I use to work and entertainment, to the earphone from this brand, Ipad, and the Apple Watch. It looks like Apple covers most of the needs for me (and many people) from the working, entertainment, healthcare (with Apple Watch) demands.
This strategy makes the brand to be an integral part of many people, including me, and encourages our loyalty with the brand to be stronger.
2. Using stock buyback strategy
This is the strategy that Apple did for years when using its own money to buy its stocks.
Having $200 billion in cash with a net-cash balance (after debt) of roughly $100 billion, Apple is knowns as one of the companies that have the biggest cash piles in America that can use to play the game “buyback stock” that others smaller companies can’t do.
Following the NYTimes, from the time when the company reaches $1 trillion in value, it has “returned $175.6 billion to shareholders, including $141 billion in stock buybacks”.
And also “repurchased more than $360 billion of its own shares since 2012, by far the most of any company, and has announced plans to spend at least tens of billions of dollars more on Apple stock”.
It helps to reduce the risks of stocks falling down when the company can play a significant role as the stock buyer to maintain the stability of the stock price on the market.
3. The positive impact of COVID 19
The pandemic makes people value tech stocks higher than normal.
When the COVID 19 just exploded, Apple stock also falls down rapidly as a result of the global stock market being impacted (The S&P 500 dropped 7% in March) to lower than $1 trillion in the middle of March.
But Apple and many other big names such as Tesla, Amazon quickly gain value back when the investors expected more from the growth of these companies.
One of the key reasons is the demands of users for the apps, tech products, and digital/remote services increase rapidly during the quarantine time when everyone stays at home and just can connect with the world by the internet and online services.
Moreover, the lockdown from pandemics leads to thousand of Apple stores being virtual. It helps the brand can save a huge amount of money that needs to spend for locations, manager fees while just needing to focus on online retails.
For Apple, the pandemic actually brings more benefits rather than issues for this brand.
And the clearest evidence is just in 21 weeks, this brand already can increase its value double to $2 trillion dollars and become the world’s most valuable company
Take away from apple value lessons:
For me, after doing the research about the way how Apple works so well during the pandemic and grow the value rapidly.
There are several takeaway lessons that I can learn from Apple about how to build up a massive success, especially in the struggle time as this COVID 19 pandemic.
The diversity in products and services created an ecosystem for users.
The Buyback stock strategy.
COVID 19 impacts on the investment decision of investors (More demands on the tech blue-chip company that makes stock prices soared).
The reduction in physical stores helps to reduce fees while online retail to be more thrive.
This is a great example for any company to see the opportunity in a tough circumstance.
It means that if you have the right way to approach and a good strategy to develop and market, even the hardest time you face, you still can make it to be the most profitable time.
Disclaim: All the information here be collected from the news sources and analyzed based on the personal point of view of the author. This is just for information purposes only. If you want to use this information for making a decision on investment with this brand, make sure to ask your professional advisors before doing it.
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