Recently four companies have been battling to be the most valuable in the world.
Apple was the first to become a Trillion dollar company followed by Microsoft. It should be noted that this back and forth of who is the most valuable company in the world is happening in part for several reasons.
The first reason is Microsoft turning the company around under the new leadership of CEO Satya Nadella and a large bet on cloud being the future of Microsoft. Software as a Service (SaaS) is the backbone of Microsoft’s success with Azure, Office 365 and Windows Store being at the forefront of Microsoft success. Microsoft has seen growth in the Azure space jumping 90% a quarter.
The second is Google is really the only player in the search market and has no real completion in the largest part of their business. Google has had major success in diversification getting into mobile with Android and moving Chrome from a browser to its own operating system and moving Gsuite into the enterprise. Google is one of the best ran companies in tech.
Amazon is another company like Google in a league of their own they are the largest online retailer and the only company to offer any service like Prime as a bundle. Amazon manager to start a new market with Alexa the same way Apple started the smartphone market with the iPhone. Amazon to this day is pretty much the only game in town for books and have now moved into to grocery store business. Jeff Benzo knows what he is doing.
Another reason is Apple has been a victim as of late of the change in industry market. For over a decade Apple enjoyed constant growth and record hardware sales with Android running a slow second. Apple had been the number one company in the industry with no one even coming close to second. As of late Apple has lost almost half its value on the stock market.
Apple has tried to sell more accessories and up the prices of hardware to continue to enjoy their huge profits but they have seen a slowdown. I think Apple was hoping for the iWatch to produce sales like the iPhone did but it did not happen.
This slow down in growth is not all Apples fault as users are hanging onto hardware longer than ever before and Apple has always made reliable hardware which allows users to get that extra year or two out of Apples expensive but rated number one most reliable hardware.
Apple has had to squeeze more money out of their ecosystem and start looking at subscriptions services like Apple Music to make up slowing hardware sales. These changes while great moves for Apple these pivot moves have hurt their profits a bit and has caused them to loose their value a bit and allow Microsoft and others to catch up.
While Apple hardware has seen good sales in new hardware like iWatch, AirPods and MacBooks these three devices can’t make up for all the hardware sales even with the higher price point.
Apple has even been hit hard as of late with the App Store. Companies like Netflix and Spotify who would allow users to subscribe through the App Store allowing Apple to get a 30% cut of subscriptions are now removing that functionality and letting users just signup directly online. I have feeling this will become the norm and companies like Hulu and HBONOW will follow suite in the coming months.
Apple has went as far as to put Apple Music on the Amazon echo and have made an Apple Music App for Android. Recently iTunes is going to be added to Samsung TVS and Apple Airplay is being added to Vizio TVS.
Apple before the holiday season made a deal to sell all their hardware on Amazon.com which is a huge move as Apple has always sold online directly through their website. Apple has even partnered with companies like Cosco to carry iPads in Store. Apple has started having sales on pricing which is something Apple has never done. They have done promotions but never price sales.
I would like to point out that Apple is going nowhere despite some bumps along the way the companies finances are fine and will be around for a long time. They have to be I would be lost without my iPhone, iWatch and MacBook Pro. Apple is still one of the most valuable companies in the world but they will need to make adjustments to the changing times in technology to stay so valuable.