Apple regains ‘most valuable company’ crown despite falling sales

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Apple has nudged ahead of Microsoft to regain the title of the world’s most valuable listed  company, worth $1.16 trillion (£910 billion).

The tech giant has gained more than $400 billion of market capitalisation so far in 2019, as investors look for a safe bet in uncertain times. Microsoft is also valued atmore than $1 trillion.

Apple’s record valuation comes despite a less than stellar year, at least by its own standards. Operating earnings fell 10 per cent to $63.9 billion, while revenues fell by 2 per cent. Sales of Apple’s flagship product – the iPhone – fell 12 per cent year-on-year in the third quarter.

Experts say that Apple’s buoyant share price reflects a reputation for delivering returns, its diversification away from the iPhone, and the growth of recurring revenues from its software services.

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As recently as 2018 the iPhone accounted for 70 per cent of Apple’s revenues. That was down to 48 per cent in the third quarter of this year. Apple launched Netflix-style streaming service Apple TV+ this month and the Apple Card credit card (with Goldman Sachs) in August. Revenue from its services division has more than doubled since 2015, taking some heat off hardware sales.

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Analysts are also upbeat about opportunities in 5G mobile technology. Apple is expected to release three 5G-enabled smartphones in 2020. 

Nevertheless, the risks of Apple’s diversification strategy were highlighted last week with news that New York’s Department of Financial Services will investigate the Apple Card, which has reportedly offered men far higher credit limits than women.  

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