COMMENT | You may have heard, recently, about a milestone that Apple crossed, in becoming the first publicly-listed company to have a market capitalisation exceeding US$1 trillion.
This event managed to lead the news in just about whatever format you consumed it. Whether print, radio, TV or online, the folks who decide what’s important for you wanted you to know that Apple had become the first trillion-dollar company in the world ever.
What they did not explain was why that mattered. And the reason they didn’t explain is simple: it doesn’t. It’s meaningless, to anyone other than Apple shareholders. I suppose the CEOs of Amazon and Alphabet — two other companies closing in on 13-digit valuations — might have felt a twinge of annoyance at Tim Cook’s team getting there first, but they’re vastly wealthy and get no sympathy from me.
Of more interest from my perspective was Apple finally wresting the title of “most valuable company ever” from Microsoft, which at its peak in 1999 was worth $US619 billion — which, if you adjust for inflation, is around $US913 billion today. (There were reports that claimed IBM’s 1967 value would be over a trillion dollars today, but these were based on a seriously flawed calculation. Microsoft was the inflation-adjusted record-holder.)
And why, I hear you ask, was Apple surpassing Microsoft of interest? Surely that was just another bit of tech-pundit esoterica?
Well, in 1999, when Microsoft carried that enormous value, it was not merely a dominant player in tech. It was the dominant player. Microsoft’s operating systems and applications were used on well over 90 percent of devices people used. Industry standards were decided not by consensus of consortia of experts, but by Redmond’s imprimatur.
The term “embrace and extend” emerged to describe the situation where Microsoft would adopt a standard the rest of the industry wanted, then add proprietary bits that ensured they worked the way Microsoft wanted. And the rest of the industry had to go along, or risk being delegated to the <10 percent niche that was not Microsoft.
Naturally, regulators took a serious look at that, and threatened to break Microsoft up the way monopolists of the past — Bell Telephone and Standard Oil, for instance — had been dismantled. Because when a company gets to be that size, it has power that should not reside in the hands of any single company. Or does it?
Apple’s bigger than that now. Not only is Apple bigger than Microsoft, it’s bigger than Microsoft has ever been. Bigger than IBM ever was. Yet where are the anti-trust regulators? Yes, there have been scuffles about tying iTunes to Apple’s devices and a few other minor side-skirmishes, but for the most part there is no appetite to break Apple and reduce its industry power.
Why? Because Apple doesn’t have that kind of power. The Mac, for all its ubiquity in TV and movies, is still below 20 percent of desktops and laptops sold. The iPhone is huge, but has a more than capable competitor in Android.
HomePod (I actually had to stop for a moment to remember its name) is a late-arriving also-ran in the nascent smart speaker market. The Apple Watch is apparently the biggest-selling smartwatch in the world, but frankly who cares?
Apple is about to enter the streaming media market, including producing its own content. Had Microsoft announced such a move in 1999, it would have precipitated realignments among traditional media companies as they prepared to take on a hyper-competitive juggernaut with very deep pockets and a desire to dominate.
Do you think the likes of Netflix and Amazon and are very worried about Apple? I do not sense their quivering.
Which is not to say that they are foolishly unprepared — as Microsoft and RIM were when Apple entered the smartphone space. But they know how to compete.
And it’s not to say that Apple is doomed to failure. It, too, knows how to compete.
But you have to feel a little bit sorry for Tim Cook and Co. What’s the point of being the proverbial 800-pound gorilla if your competitors aren’t even a little bit scared ?
Matthew JC Powell is a technology commentator, philosopher and father of two, in no particular order