Apple's on a roll, so what could go wrong?
By Andy Goldberg Mar 1, 2012, 14:23 GMT
San Francisco - The Apple Express just keeps rolling on. On Wednesday the company founded by Steve Jobs in 1976 became one of only six companies in history to pass the market valuation of 500 billion dollars, just a month after passing the 400-billion-dollar mark.
With the company's exalted position as the maker of the world's most popular smartphone, and its domination of tablet computers, Apple is almost universally expected to keep growing.
Only a third of the world's major cellphone carriers currently offer their customers iPhones, leaving plenty of space for Apple to further expand sales, say analysts. Apple also has only a relatively muted presence in China, which it sees as its main avenue for growth, and is also devoting almost 1 billion dollars to an ambitious expansion of its high street stores.
Then there are the products. Apple's latest iPhone 4S introduced late last year proved to be the company's most popular device ever. But it will be superseded this year by a completely redesigned iPhone 5 that will further spur sales.
Apple fans are also squirming with anticipation about the expected announcement next week of the iPad 3. This is predicted to boost sales of the company's genre-defining tablet computers just as competitors powered by Google's Android operating system are beginning to mount a challenge.
There's increasingly plausible speculation about Apple's plans to do to the TV market what it did to the markets for cellphones and PCs - completely revolutionize it with a new product that re-imagines how users interact with their device and how content providers serve them.
The company's efforts so far with the iTV have certainly been underwhelming - but Jobs hinted before his death that he believed he had cracked the TV conumdrum.
Such initiatives have prompted giddy predictions about the company's future. With Apple shares at around 540 dollars 'the stock has gone nearly straight up over the last three years,' noted Steven Russolillo of the Wall Street Journal on Wednesday. 'What's next for Apple? 600 dollars in March? Do we hear 700 dollars, 800 dollars ... ?'
Yet for all the cheering there are some worrisome clouds in Apple's blue sky. Due to a combination of hubris, changing markets and insularity, previous giants have all fallen from peaks that at the time seemed unassailable.
Exxon is the only previous company to pass the 500 billion mark and retain anything even close to that value with a 411 billion dollar current market cap. Of the others, Microsoft is now worth 267 billion dollars, GE about 200 billion dollars and Intel and Cisco about 100 billion dollars each.
Tech analyst Carmi Levy notes that Apple's current success is the direct result of the vision of Steve Jobs. While his replacement Tim Cook has proved an exemplary manager, he's not known for the kind of groundbreaking innovation that Apple needs to continue its growth.
'Cook can't simply continue to extend legacy products, he needs to create new legacies of his own,' Carmi told dpa.
As competitors offer cheaper smartphones and tablets that are more than capable of doing what most users want, Apple might find itself pressed to stay ahead of the market. 'It risks being eclipsed by hungry Android vendors with nothing to lose,' says Carmi.
Add to that the organizational challenge facing Cook in preserving Apple's DNA and inspiring its legions of workers, and Apple could quickly lose its shine