This morning, I was thinking about Apple. When I got started in this industry in the early 80s, it was on an Apple II+ writing first in BASIC and later in UCSD Pascal. I thought Apple was simply amazing, so it was tough watching the more than decade of decline before Jobs rejoined. Our industry has no memory and most great companies fade away. Sometimes this happens surprisingly quickly once the process has begun. Tandem, still one of the best database machines ever made, was eaten by DEC. DEC was eaten by Compaq. Compaq was eaten by HP. IBM took over the personal computer leadership from Apple and subsequently also fell from the top through a long period of decline. IBM eventually sold the client computer business to Lenovo and IBM continues to struggle to find growth with 20 consecutive quarters of declining revenues. Google and Amazon didn’t yet exist back then, and Oracle was just getting started.
Apple has done the impossible of hitting the top, losing touch with their customer base, and declining to near irrelevance before finding their way back to the top. Apple’s stock price has been high for years but the stock market gets excited (or depressed) in ways that are often disconnected from the success the company is actually achieving. To see how Apple was really doing, I looked up the world’s top 50 revenue producers to see where they stood: List of Largest Companies by Revenue.
Four observations jumped out while scanning the list. Of course the first is that Apple is at #9 on this list after having had a brush with corporate death. They now bring in more revenue than all companies on the planet except 1 retail, 1 electric utility, 4 oil and gas, and 2 car companies. Incredible and it just about never happens that a company comes back after having nearly faded away.
The second is that Walmart is still bringing in more revenue than any other company period. $482B. That’s ½ trillion dollars. Looking at the Gross Domestic Product of entire countries (all the finished goods and services produced by the country in a year), Walmart revenue when compared to country GDP would place just slightly behind Poland and well ahead of Belgium. A truly staggering number.
The third observation from reading the top 50 corporate revenue list is that most of the exciting companies you read about aren’t even on the list and, ironically, most of their competitors are. Tesla is perhaps the best example. Tesla is in the press daily and there is no question they are having a massive impact on the automotive world. Tesla brings in a respectable $7B annually while 7 of the world’s automotive companies bring in more than $100B. Revenue is obviously a trailing indicator. I’m not convinced the stock price is much better but it’s amazing, at least to me, how much revenue is being brought in by companies that really haven’t been innovating for quite some time.
A fourth observation is the massive amount of money spent on automobiles and related technology. 14 of the top 50 revenue producing companies in the world are from the automotive and oil and gas sectors. An extension of that observation is selling to consumers in general is always a huge opportunity. Even small profits times a very large multiplier can get impressively large.
Apple is a real outlier in many respects. One of my greatest regrets in my professional life is I never got a chance to meet Steve Jobs.