Apple Is Worth One Trillion Dollars

Apple, a company founded 42 years ago in a Santa Clara Valley garage to make personal computers, is now worth $1 trillion. It becomes the first American company to achieve that feat.

A trillion is an unimaginably big number no matter what you’re counting—but especially when it’s money. It’s the kind of number usually reserved for measures of aggregated national economic inputs and outputs. The 2018 U.S. budget accounts for estimated revenues of $3.6 trillion, and expenditures of $4 trillion. That makes Apple’s market cap as big as a quarter of federal operations. It’s hard to fathom what that even means.

But because of inflation, the meaning of big numbers changes over time. Yesterday’s unthinkable measure of lucre is today’s ho-hum economic normalcy. These days, having owned a decent house for a couple decades in a major city might make you a millionaire, on paper at least. A billion dollars still feels pretty large, but mostly when held in the coffers of a single individual. There are over 2,200 members of the “three-comma club” this year, as Silicon Valley’s fictional tycoon Russ Hanneman calls billionairedom. But 90 of the top 100 global companies by market cap are worth over $100 billion. And despite Silicon Valley’s recent invention of the term “unicorn” to name privately-held start-ups worth $1 billion or more, that’s just not a lot of money by big-business standards.

It wasn’t always that way. The first company to achieve a billion-dollar valuation was U.S. Steel, a company so old its NYSE ticker symbol is just X. It reached that high-water mark near the turn of the 20th century, the result of consolidation in the steel market. Andrew Carnegie, the incumbent steel magnate, was ready to move on to philanthropy, and the bankers J.P. Morgan and Charles Schwab orchestrated a buyout. Steel was important for industry at the time, and the new company’s billion-dollar valuation was a statement about the broader economy as much as U.S. Steel itself. When one company controls a large portion of an important market, it’s no surprise that it commands big money when securitized—that is, turned into a bet on the future, not just a measure of the present. The future often turns out differently, of course. U.S. Steel has gone through many changes in the 117 years since its three-comma milestone, most of them declines. Today, the company’s stock, still trading as NYSE:X, is worth just over $6 billion. That’s less than half of Apple’s net profits from last quarter alone.

Big business has also gotten a lot bigger. $1 billion in 1901 amounts to about $30 billion in 2018 dollars, a number closer to the current value of, say, SiriusXM—a respectable company, but hardly an apotheosis of contemporary industrialism. Together, the top six global businesses, all of which are tech companies, are worth over $5 trillion. There are reasons for that. Reduced oversight has made consolidation easier and prevented breakups from antitrust. Companies are a lot more profitable than they once were, too—especially tech companies, which devour huge earnings from historically small investments in workforce and capital expenditures. Those huge profits make them more valuable to financiers, whose speculative interest in companies accelerates their value. And the size and importance of the securities market has also swelled since the Great Depression wiped it out, making finance—the conversion of business activity into tradable collateral—the place where wealth accrues.

Apple’s accomplishment, if that’s the right word for it, was inevitable. One of the biggest companies was going to reach $1 trillion in value sometime soon, and because the biggest companies today are tech companies, it was bound to be one of them. In some respects, it’s a dubious and arbitrary achievement. $1 trillion is a distinctly American measure, for one thing. A valuation measured in British pounds sterling would take a lot more value to reach £1 trillion. And for another, Apple’s stock has teetered up and down during trading today, as it does every day. The stock will measure below $1 trillion in market capitalization at some point today (or tomorrow, or next week), even if eventually it stabilizes well above that figure. But in a culture obsessed with numerical markers and records, Apple forever will be the first company to reach $1 trillion. That is something no one can take away from it, like no one can take away Babe Ruth’s 1927 home-run record, even if it was topped 34 years later.

Many people will scorn the act of marking this supposed success at all, noting that Apple has also hoarded more than $250 billion in cash offshore, partly to avoid paying U.S. taxes on it. Or that Apple has achieved its monster profits on the backs of Chinese factory labor working under appalling conditions. Or that like every company that manufactures computer hardware, Apple must use raw materials that are sometimes mined by children amid inhumane circumstances in horrific, war-torn places. These matters play out on a smaller scale, too. Yesterday, Apple announced profits of $13.8 billion on $61.1 billion in revenue—earnings largely won from global smartphone sales. The same day, Apple also shut down the affiliate program that allowed people to draw commissions from referrals to the App Store that helps drive its smartphone-business success. Some of the publishers that have relied on those commissions to operate are already worried they might have to close up shop.

But even if all those things are true, they can’t displace Apple’s mythos as an unmitigated American success story. Four decades ago, a geek and the adopted son of immigrants tinkering in a garage made the personal computer viable (the Apple II), and then friendly (the Macintosh). The company rose fast and fell hard, seeming doomed by the mid-1990s. Until its ousted founder returned and reinvented the business, issuing product after product—iMac, iPod, iPhone, iPad—that changed the way humankind lives.

Tech magnates crow too often about “changing the world,” but this is what it really looks like, for good and for ill. It’s what railroads did once, and steel too, and oil, and automobiles as well. There is always brutality in the biggest big business, because nothing grows so large without transforming the world it leaves behind utterly, and forever.