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Alphabet overtakes Apple as the world's most valuable company based on enterprise value

Posted: , by Alan F.

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Alphabet overtakes Apple as the world's most valuable company based on enterprise value
On August 11th, 2001 we told you that based on market capitalization (stock price multiplied by shares outstanding), Apple had become the world's most valuable company surpassing Exxon-Mobil at the top. By early 2013, Apple's shares had dropped nearly 40% after peaking on the launch date for the Apple iPhone 5. Exxon-Mobil briefly took over at the top once more. But the tech titan soon regained the title as the world's most valuable company.

However, the combination of a weak stock market and forecasts from some analysts that Apple will soon report its first year-over-year decline in iPhone sales, has some investors running for the exit. While Apple still is ranked number one based on its $535 billion market cap, it has fallen to number two when using enterprise value. This involves adding debt and subtracting cash, and provides a more accurate look at the value of a company's business.

Apple's enterprise value of $393 billion has the company second to the $420 billion enterprise value of Alphabet. Yes, that is the holding company that owns Google. In computing its enterprise value, Apple is being penalized for its large holdings of cash.

While 43 analysts on Wall Street are still posting a target of $143, one by the name of Adnaan Ahmad has a target of $85 for the stock. He sees similarities between what Apple is going through and what happened to former smartphone powers Nokia and BlackBerry. In case you want to write off Ahmad as a lone nut, consider that with Apple currently trading at $99, the stock is a lot closer to his target than it is to the rest of the Wall Streeters that follow the company.

"Looking back at history on when a company starts to face a growth question mark, [it] does not bode well for Apple in the next two years unless it comes up with a major new product category."-Adnaan Ahmad, analyst

Apple's stock fluctuations affect Main Street just as much as it does Wall Street. Most mutual funds are loaded with the shares which means that you could be the world's number one Apple hater, but still have to rely on the company's success to have a prosperous retirement.

source: FinancialTimes

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posted on 22 Jan 2016, 11:11 18

1. SirYar (Posts: 351; Member since: 02 Jul 2014)


Significance of this fact to the everyday user = None.

posted on 22 Jan 2016, 11:30 22

5. Wiencon (Posts: 1920; Member since: 06 Aug 2014)


But we're geeks

posted on 22 Jan 2016, 11:52 14

9. Johnnokia (Posts: 1104; Member since: 27 May 2012)


The illustration of this analyst is very true.
Apple don't get Nokia's lesson. In 2008, Nokia had around $48 billion cash in the bank. They didn't really invest this amount and try to extend its bussiness beyond the handset manufacturing. However, Nokia acquired NavTeq, Siemens network, and Motorola Solutions networking.

On the other hand, Apple has $180 billion cash in the bank, and they rarely acquire any big companies. They are still relying on iphone, iPad, and App store for almost 75% of its revenue.
That is extremely dangerous, because any new innovative Operating System might destroy Apple completely afterwards. The cash reserves will not save them, and it would be burned very quickly on the enormous loss and right down. Same what happened to Nokia after it burnt most of its cash on its burning platform and the miserable path of Microsoft.
Apple must extend its business and get used of that cash before it is too late. No one can stay in the top forever.

posted on 22 Jan 2016, 12:02 2

11. Arch_Fiend (Posts: 2709; Member since: 03 Oct 2015)


Even if a new innovative OS enters the tech world. It wouldn't wipe out ios or android and with Apple being the only company that can produce ios handsets. it's in even better shape to take on competition than android.

posted on 22 Jan 2016, 12:06 7

15. Rafishant (Posts: 280; Member since: 13 Oct 2015)


Lol.
Samething said about Symbian and BlackBerry.

posted on 22 Jan 2016, 13:18 2

27. MANOFSTEEL (Posts: 75; Member since: 25 Nov 2015)


The difference in this case Apple create this market and everybody jumped on this direction, nokia and BB refused to follow that lead and got burned by time they decided to it was too late

posted on 22 Jan 2016, 16:37 4

56. tedkord (Posts: 12207; Member since: 17 Jun 2009)


But since 2007, Apple had mostly been doing the following.

posted on 22 Jan 2016, 15:51

51. Arch_Fiend (Posts: 2709; Member since: 03 Oct 2015)


I never said that tho.

posted on 22 Jan 2016, 12:26 7

17. Johnnokia (Posts: 1104; Member since: 27 May 2012)


BlackBerry is the only one that can produce BB phone.
Nokia was the only one that manufacured MeeGo OS phones and controlled over 70% of Symbian.

Your point?

posted on 22 Jan 2016, 12:36 1

19. Hexa-core (banned) (Posts: 2131; Member since: 11 Aug 2015)


Pointless!

posted on 22 Jan 2016, 14:09 7

37. Well-Manicured-Man (Posts: 342; Member since: 16 Jun 2015)


You are right but because of a different reason.

This is not about companies but about people. Look at Apple's history. It was a star in late 70ies and throughout the 80ies. During the 90ies, the company was almost dead. Then, Steve Jobs came back and turned the company into a fortune.

Apple can go down fast if another geek similar to Steve Jobs founds a company with a great idea or becomes a CEO of a competitor of Apple. Such a person can start a brand equally strong and with similar values like the brand Apple.

Tim Cook can only manage and optimize what Steve Jobs has left but he is the wrong guy to turn a market around or re-invent a business. His character is too weak for this. Many people hated Steve Jobs, but everyone doing so has to admit one thing: He had the "fuck you" mentality to take great risks and do great things.

posted on 23 Jan 2016, 04:15 3

75. Jimrod (Posts: 1404; Member since: 22 Sep 2014)


Well-Manicured-Man's point is completely correct.

In my experience the best companies always have one person, someone completely driven (and considered by many to be an ass-hole because of this) who pushes through their ideas, ignoring anyone else.

What is happening at Apple is that they're sinking back to mediocrity because they now have a "committee man" at the helm, someone without drive and imagination but will ask everyone else what they want. When that happens you end up with the "Homer car" from the Simpsons...

posted on 23 Jan 2016, 11:26 1

82. Well-Manicured-Man (Posts: 342; Member since: 16 Jun 2015)


People want to be lead, they want a leader. Steve Jobs was a leader and that is why so many people followed him.

posted on 22 Jan 2016, 15:54

52. Arch_Fiend (Posts: 2709; Member since: 03 Oct 2015)


Yeah But Those Phones Weren't/Aren't Very Good In My Opinion Anyway. The iPhone Is A Great Device And I Can't See It Never Not Being An Option In The Smartphone World.

posted on 22 Jan 2016, 12:05 1

14. justrt (Posts: 404; Member since: 10 Jul 2014)


Apple are making a car. That will be a significant extension of their business

posted on 22 Jan 2016, 13:32 1

31. Scott93274 (Posts: 5015; Member since: 06 Aug 2013)


I do not see Apple succeeding in the Auto industry if you ask me. Granted what their intentions are at this moment is anyone's guess, but if they are doing what you insisted (Actually designing a car), then I see it being a massive flop. Google on the other hand is less interested in designing cars than say developing a navigation system that removes the need for a human driver. What they are working on is something that can be implemented into any and all cars from any manufacturer. And with the amount of resources they've poured into this project, and with their current track record, they're likely to reach a greater success that what you suspect Apple is planning to do with the automotive industry, by simply competing with the rest of the world.

posted on 24 Jan 2016, 07:47

86. joey_sfb (Posts: 5989; Member since: 29 Mar 2012)


I don't think the comments so far is being fair to Tim Cook. I dislike him but I know his business decision is sound.

Yes! He is not the marketing leader but he does bet on several winner etc Apple Pay and Apple Music. Products line such as Apple watch and iPad Pro would bomb but it does not cost Apple much financially.

Nokia on the other invested in a number of big acquisition that it could not digest. So Apple is doing fine for now.

posted on 22 Jan 2016, 21:36 1

70. jroc74 (Posts: 6015; Member since: 30 Dec 2010)


This is why I compare Apple to Nintendo.

Huge cash reserves based on a singular hit product, product family.
Both companies are basically one dimensional.

Apple better take notes of what happened/happening to Nintendo....it can happen to them just as easy. Only difference between the 2 is Apple was able to capitalize off their hit, Nintendo wasnt.

posted on 22 Jan 2016, 13:31 1

30. lyndon420 (Posts: 4555; Member since: 11 Jul 2012)


He's most likely an iOS user...this type of article probably wouldn't resonate with him unless it said apple was king.

posted on 22 Jan 2016, 14:13 1

38. SirYar (Posts: 351; Member since: 02 Jul 2014)


Actually I am a hardcore Andorid fanboy that so happens to hate Apple. Go figure!

posted on 22 Jan 2016, 14:14 1

39. SirYar (Posts: 351; Member since: 02 Jul 2014)


Actually I am a hardcore Andorid fanboy that so happens to hate Apple. Go figure!

posted on 22 Jan 2016, 17:48

61. keithtae (Posts: 442; Member since: 25 Mar 2015)


Omg, how can I upvote you 100 times?

posted on 23 Jan 2016, 05:08 1

76. Hexa-core (banned) (Posts: 2131; Member since: 11 Aug 2015)


More like downvote.

posted on 22 Jan 2016, 11:25 3

2. Tziggy14 (Posts: 454; Member since: 02 Sep 2014)


I highly doubt this is a big deal since Alphabet(Google) is not a fashion brand like Apple.

I remember there were countless media coverage of Apple overtaking Microsoft and ExxonMobil years back. Only Google fanboys will make this a big deal.

posted on 22 Jan 2016, 19:38 2

68. lyndon420 (Posts: 4555; Member since: 11 Jul 2012)


It's a big deal for everyone else when they're the ones on top, so why can't it be a big deal for Alphabet as well? Creating this new company that houses everything together was a brilliant idea for them because it gives scope to how big 'Google' really is and what they're involved in.

posted on 22 Jan 2016, 21:40

71. jroc74 (Posts: 6015; Member since: 30 Dec 2010)


Thats ok, Google has still come a long way from being just a search engine.

And because you think Apple is a fashion brand....them being #1 in this category woulda been a big deal? So enterprise doesnt matter huh....

Ask Blackberry about that. They are still alive thanks to enterprise, corporations.

posted on 22 Jan 2016, 22:53

72. Tziggy14 (Posts: 454; Member since: 02 Sep 2014)


Google still makes 90% of their income from search.

posted on 23 Jan 2016, 05:13 1

77. Hexa-core (banned) (Posts: 2131; Member since: 11 Aug 2015)


Wrong! Google makes the majority of it's income from ads.

posted on 23 Jan 2016, 23:59

84. jroc74 (Posts: 6015; Member since: 30 Dec 2010)


That could be true...but I do believe they are much more than just a search engine these days.

posted on 22 Jan 2016, 11:26

3. SuperAndroid507 (Posts: 310; Member since: 06 Jan 2014)


Perhaps they're going to make that rumored electric "Tesla-like" car to bring that "new product category"

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