Apple briefly overtook Exxon today as the most valuable public company in the world. That’s a big milestone in the larger world of computing, and it is a sign that the digital economy is becoming more important in some ways than the physical economy.
During the day, Apple’s stock price rose, fell and then rose dramatically again. In the last hour of trading, Apple shot ahead of Exxon, which saw a similar pattern during the day. And during the last moments of trading, Apple fell behind.
Just three weeks ago, Exxon had a $60 billion value advantage over Apple. But after the financial markets crashed, that changed rapidly. Exxon closed today’s trading at a value of $348.32 billion, while Apple closed at $346.74 billion. It might take another day of trading, but Apple’s progress on this front has been steady, and it’s very likely to surpass Exxon very soon.
If the changeover happens, it is indeed a changing of the guard. While Exxon represents the age of oil and the industrial revolution, Apple represents the future. It is the company that has successfully bridged both the computer revolution that just ended and the mobile revolution that is just getting under way. That is why shareholders have rewarded it so handsomely, and why they are likely flocking to the company’s stock as a haven at a time of uncertainty.
It reminds me of the prophetic comment of W. J. “Jerry” Sanders III, the founder of chip maker Advanced Micro Devices. A long time ago, at the dawn of the electronic age, Sanders said, “We’re the oil of the eighties.”
If you think about it that way, this day was bound to come. Oil is the lifeblood of physical goods. But chips became valuable because of the intellectual property contained within them. Soon enough, as Intel began selling faster and faster microprocessors for personal computers, the chips became more valuable than if they had been made out of gold. Apple was one of the prime beneficiaries of the age of powerful computer chips, helping to launch the personal computing revolution in the 1970s.
But the company did what few technology companies were able to do. During the transition from one era to another, Apple stayed relevant. Companies such as IBM and Hewlett-Packard have accomplished this feat, but they have not benefited as much as Apple in the newest age that is upon us, the age of mobile computing.
When Apple launched the iPhone in 2007, it flipped the world on its head, giving chip makers a new priority. Not only did they have to create powerful computing devices, they also had to make them power efficient so they could run in mobile devices with good battery lives. Apple also launched the age of mobile apps with its App Store and it revived tablet computing with last year’s launch of the iPad.
So if anyone asks why Apple is valued so much more than its rivals, that’s your answer. Anybody can come up with a hit product in the age of digital goods. But to do that consistently, decade after decade, that’s something special.