How Apple Became A Trillion Dollar Company

Apple became the first company to cross the $1 trillion mark in August 2018.

And hit the $2 trillion mark on the 20th of August, 2020, despite the negative impact of the pandemic. On January 3, 2022, it briefly became the first $3 trillion company in the world.

Steve Jobs, Steve Wozniak, and Ronald Wayne founded the company in a garage when they produced their first personal computers in 1976, but ever since, it's been topsy-turvy.

However, since Tim Cook took over from Steve Jobs as Chief Executive in 2011, its shares have quadrupled, making it a trillion-dollar company.

But things could have been different today from Steve Jobs' resignation and return, NeXT, and Cook’s takeover.

To understand the success of Apple, we must understand its history. Apple, today, is worth $2.74 trillion, with its relentless rally putting $ 3 trillion in view. But how did the trillion-dollar company become so successful?

The Inspiration Behind Apple

The story all began when two long-time friends, one named Steve Wozniak, built a blue box that could make long-distance calls, and the other, Steve Jobs, encouraged him to sell it. They ended up making $6,000.

Wozniak made other inventions, like a game with a circuit box design, but it was after the pair attended a Computer club in 1975 that Apple became clear in sight.

In 1976, Wozniak made a computer in a garage, and Jobs encouraged him to sell it. They named it Apple I, and that's how the company started.

Early Stage of Apple

Apple I, the desktop computer Steve Wozniak built, was with wooden casing and sold for $666.66 with over 200 computers made.

They negotiated with Byte shop owner Paul Terrell, who offered to buy 50 units for $500 with cash on delivery if they came fully assembled.

Before now, buyers would have to solder necessary chips onto the circuit board themselves and integrate their own keyboard, display, and power supply.

Jobs and Wozniak began making products that were easily useable by everyone due to this. It also gave insight into what Apple II should look like.

Apple II wholly sold out after being presented at Westcoast Computer Fair in April, after which Apple went public. Sales went from $ 7.8 million in 1978 to $ 117 million that year.

But Apple III was a failure. Steve Wozniak didn't build this computer, but Wendell Sanders did. Jobs had strange expectations for this computer.

He wanted a computer with no cooling fan to sustain his desired design. The motherboard got hot too quickly and warped, and chips popped out of their sockets due to the overpopulated board, resulting in severe problems with the entire system.

Apple branched out and worked on Lisa and Macintosh to cover up for its Apple III mess by giving both graphical user interfaces.

Lisa emerged in 1983 for $10,000, and the nine-inch screen Macintosh sold for $2,500. The former failed due to its price tag, while the latter had mass market success and ushered in the modern age of personal computing.

The Run Of CEO's and Jobs’ Dismissal

Michael Scott became Apple’s first CEO in 1977 before Mike Markkula took over from 1981 to 1983.

After Markkula's departure, Jobs pitched the then Pepsi CEO John Scully to becoming Apple CEO in 1983 by asking him if he wanted to sell sugared water for the rest of his life or wanted an opportunity to change the world. Scully took the chance immediately.

But things changed quickly for the company in 1985 when Jobs attempted to oust Scully.

They had several disagreements due to their management styles and the price value of the Macintosh.

The board thought to resolve this by moving Jobs into the role of Chairman, a ceremonial role, which only meant he could no longer make significant decisions. But Jobs, unimpressed, left the company. Wozniak also left because he was unhappy not playing the Engineering role.

Jobs founded the NeXT computer company, while Sculley increased Apple’s Annual Revenue from $569 million to $8.3 billion.

But Scully got fired in 1993 over the failed launch of Newton PDA and moving the company’s computer to Power PC chips instead of Intel Processors, which cost the company a fortune and kept Mac prices high.

The company was declining, and Scully had to step down for Michael Spindler to take over in 1993. Michael tried but decided the best move for Apple was to sell the company. The board decided against it and replaced him with Gil in 1996.

Gil Amelio became the CEO in 1996 and saved the company by reducing its $250 million expenses and laying off over 3,000 workers. He purchased Jobs’ NeXT for $427 million to use the company’s operating system.

But the company’s losses continued to mount, which got Amelio fired, with Jobs becoming the company's interim CEO in February 1997.

Jobs Reason For Apple’s Decline

Jobs tried to revive the company by analyzing its failure to loss of its iconic identity and product prices.

Prices went up, and Mac stopped selling due to its cost, and the product line was proliferated, so it was hard to distinguish between models.

There were products of all kinds, including printers, to help boost sales. The cost was too much for the company.

Jobs Steps to Revival

Jobs made daring efforts to restore Apple’s fortune.

First, the company struck a $150 million partnership with its fierce rival, Microsoft. This alliance with Microsoft led to the creation of a Mac version of its popular office software.

Second, Apple announced a transition to Intel’s x86 processors for its Mac computers at Apple's Worldwide Developers Conference in 2005.

Aside from the slow delivery of IBM’s chip, the shift from IBM-built PowerPC processors was necessary because its processors couldn’t match what Intel was doing. PowerPC processors were fast, but they ran hot and required a lot of power, which is terrible for laptops.

Another considerable advantage of this transition was that, for the first time, Mac users could run Windows natively on Mac hardware.

Third, Apple’s introduction of an all-in-one colorful iMac computer in 1998, Mac OS X, iPod, and iTunes products was another step to the Mac maker’s recovery.

The company branched out to iPods in 2001 because music players at that time were substandard. They could barely contain 10-20 songs. Apple improved the product by releasing its iPods that could hold 1,000 songs.

In 2003, Musicians could now sell their songs through the iTunes store. Apple changed music from cassettes to bytes. This way, the company became relevant in the music industry. Apple products began creating many possibilities, touching every sector and granting access to various audiences.

The company opened its first physical retail stores on May 19, 2001, for the presentation of the company’s products after successfully trying out online stores in 1997.

In 2007, The Mac company introduced revolutionary products like the iPhone. Followed by the App Store in 2008, the iPad, and Macbook Air. The iPad sold out 1 million in 28 days compared to iPhone’s 74 days.

Jobs eliminated everything, causing them to lose profits, and steered the company on the right track by producing revolutionary products that met consumers' needs.

Tim Cook

After Jobs passed away, Cook continued the culture of Apple’s creation of revolutionary products with versions of iPhone 8, 8 Plus, and X, which contain retina, high definition display, all bionic chip, and wireless charging.

In 2016, Apple introduced smartwatches. Wireless earbuds and subscription-based services like Apple Tv+, Apple Music+, and Apple Arcade followed suit.

The Secret of Apple’s Success

Creativity and Innovation

The company places so much value on creativity and innovation. One can observe that in their creation of revolutionary and disruptive products.

Apple became the first to produce a phone, music player, photo editor, and game console.

Though they were not the first to create a smartphone or mp3 player, when they produced theirs, it was revolutionary and far better in design and performance, which made their competitors play the game of catch-up.

Staying Ahead of Competitors

They are always far ahead of their competitors by producing future products in the present. Its creativity and innovation gave birth to products the world had not seen before and made them two years ahead of its competitors.

High-Quality Products

As Apple designer Jonathan Ive said, “Our goals are very simple — to design and make better products. If we can’t make something better, we won’t do it.”

Apple ensures they dish out high-quality products that are flawless in performance and perfect in design.

Apple, initially a personal computer, has switched to other sectors and dominated it because of its high-quality products.

Consumers Integration

They try to see how the world affects them to understand their customer’s needs.

They create a lovely customer experience by giving the audience direct access to various products and ensuring their products are simple and easy to use. The choices were not many, and so were the complications.

Their products give their audience a sense of fulfillment and belonging.

Apple has a brand legacy of trust. If it's Apple, it’d be better to have made their customers willing to pay for anything, no matter the price.

Outsiders' View On Why Apple Is Thriving

University of New South Wales marketing senior lecturer Gary Gregory told The New Daily that consumers are drawn to purchasing Apple products by its clever advertising.

“Apple has integrated into people’s lives with its advertising by showing people how its products can fit into their lifestyles, unlike its competitors that advertise its product features,” Mr. Gregory said.

He said Apple had won the tech market with its ability to control and channel distribution.

“The company’s control over its distribution is incredible because it’s tough to be an authorized seller, and its pricing is consistent worldwide.”

The Swinburne University of Technology senior lecturer in media, Dr. Belinda Barnet, said Apple had also won consumers with its strong data policies.

“Privacy is the core of Apple’s business model, and they charge a lot for data storage, which shows how seriously they take consumer privacy compared to other companies,” Dr. Barnet told The New Daily.

“Ironically, when Apple started, they were an upstart company, but they have now dominated the market with others trying to keep up.”

Melbourne University digital and mobile journalism lecturer Corinne Podger said Apple’s products were distinctively “sexier” than its competitors.

“They look and feel good, and the user experience of Apple products has always attracted consumers,” Ms Podger said.

Bottom Line

The company’s Marketing, Revolutionary products, Consumer priority, Branding, and Leadership style sets it apart from its competitors.

Apple had maintained its core value no matter what, and when it tried to deviate from it, it almost paid the total cost.

Today, the initial computer company earns 52% of its revenue from its iPhone and 19% from its services. Macs, wearables, and iPads make up the remaining 19%. Apple is reaping the fruit of taking that bold step to branch out while maintaining its core value.

It won’t be long till we see the company hit the $3 trillion mark again. Investors keep tabs.