Apple was the first to the trillion-dollar club - but faces competition to be first to break the $2 trillion barrier. Photo / AP
Apple was the first to the trillion-dollar club - but faces competition to be first to break the $2 trillion barrier. Photo / AP
Who would have thought it? It feels like only yesterday when in August 2018 Apple became the world's first company to exceed $1 trillion in value.
At the time, it was an achievement that stunned investor.
The figure seemed dizzying, capping a more than 50,000 per cent share price surge since the moment when Apple floated on the stockmarket in 1980.
Yet, despite market gyrations, a trade war and a global pandemic that has ushered in the worst economic crisis for generations, less than two years later Apple already stands at $1.68 trillion - and counting.
Meanwhile, three other companies have grappled their way into the trillion-dollar club: Microsoft at $1.58 trillion, Amazon at $1.57 trillion and Google-owner Alphabet at $1.06 trillion.
As Big Tech's biggest beasts prepare to release their results over the coming days, which is best placed to cross the $2 trillion threshold first?
To be sure, the bloated valuations of these companies still feel unfathomable.
Put together, those four alone are now worth $5.85 trillion - slightly higher than the $5.7 trillion GDP recorded last year by Japan, the world's third biggest economy after the US and China.
The figure is nearly treble the combined market valuation of all the companies in the FTSE 100 which stands at £1.7 trillion ($2.1 trillion). Britain's biggest single company, AstraZeneca, is worth a piffling £111bn ($141bn) - a mere pimple on Apple's armpit.
Justified or otherwise, there is no denying the extraordinary success of these companies, which have thrived during a prolonged period of economic dislocation while many others have struggled to survive.
Apple, which generated sales of $124bn in the six months ending March 28, may be the Goliath of the global technology industry but it may not be the most obvious candidate to hit $2 trillion first.
That's because despite efforts to reduce its heavy reliance on the iPhone, and a recent focus on services and wearables as the next big growth opportunities, at its heart Apple remains a hardware company, which is more exposed to deteriorating relations with China than its peers.
Apple revenues still rely heavily on its iPhones. Photo / AP
Apple has enjoyed a recent lift at the expense of Huawei, a key competitor which has been hammered by US sanctions and restrictions on its use of cutting-edge US chip designs.
Nevertheless, the iPhone still generates roughly half of Apple's sales. Other devices - iPads and Macs - take the share of hardware up to 75 per cent of overall sales.
Smartphones remain a stagnant market of course. Global sales of smartphones across the industry fell 20 per cent in the first quarter of this year, according to Gartner, which also predicts global device shipments - including PCs, tablets and phones - to fall 14 per cent this year.
Such figures are distorted by the Covid-19 lockdown, but even a potential boost from the launch of Apple's first 5G iPhone, expected in September, is unlikely to significantly move the dial.
Apple has struggled to develop its next killer product to supplant the Mac, iPad and iPhone of yesteryear, and services income may come under pressure amid anger over the stiff commissions charged to third-party developers using its app store.
Meanwhile, Tim Cook's colossus, which produces most of its devices in China - the world's biggest smartphone market - faces a serious challenge grappling with deteriorating relations between Washington and Beijing.
A comprehensive reordering of its supply chain is in the offing - which won't be easy or cheap.
If not Apple, then who?
Microsoft has enjoyed a pandemic boost from services such as Microsoft Teams. Photo / AP
Microsoft has been the tech industry's dark horse in recent years. After a rocky period a few years back, under chief executive Satya Nadella the Seattle-based company has made a remarkable comeback through a far-sighted pivot into cloud computing and an overhaul of what many viewed as a toxic culture.
Once written off as a has-been that famously fumbled the rise of the smartphone through an ill-judged acquisition of Nokia, then another has-been, Microsoft has enjoyed a boost from the pandemic through the surging popularity of services like Microsoft Teams.
Nevertheless, it is not Microsoft but its cross-town rival, Amazon, which of all of the big tech companies arguably has the greatest shot at hitting the $2 trillion mark first.
Without Apple's Chinese headaches, Jeff Bezos' corporate octopus has so many limbs growing at such a phenomenal pace it sometimes seems hard to keep track of them all.
Amazon also has a clear runway of growth in the years ahead, not only in its core e-commerce business but across several others.
Amazon Web Services, its highly profitable cloud computing arm, is still growing at more than 33 per cent a year.
Amazon Prime Video, its streaming business, is likely to have enjoyed a boost from lockdown viewing, and its often-overlooked advertising business is rapidly emerging as a serious contender to Facebook and Google.
Amazon's biggest threat may come from regulators seeking to prune the ever-growing tentacles of the company. Photo / AP
Bezos' creation v the regulators
Amazon is somewhat cagey about the performance of this unit, refusing to break it out.
But its "other" category, which mostly covers the ad division, was up a stunning 44 per cent in the past quarter to $3.9bn in revenue.
The company possesses detailed insights into its customers' tastes, their likes and dislikes, and it's increasingly leveraging that information for fresh commercial advantage.
Then, of course, there is e-commerce, where Amazon remains hugely dominant and where it has enjoyed a huge advantage during the temporary shutdown of so many bricks and mortar retailers.
There is also still huge scope for growth, especially in international markets.
For Bezos, who will appear before a US Congressional hearing into competition next Monday, the company's biggest threat does not come from its rivals so much as from politicians and regulators.
From the amount of tax it pays to the impact Amazon is having on the high street and the dominance of its cloud computing arm, as it edges towards $2 trillion in value Bezos' extraordinary creation is facing growing calls to be pruned back.
Whether or not that pressure yields results, Bezos doesn't have too much to worry about.
The world's richest man - whose personal stake in the company jumped by $13bn in value on Monday alone to a total of $189bn - is unlikely to feel the pinch any time soon.
