The Industry Changes Behind Apple's Market Value: Who is the Mythical Terminator

Apple's market value of about 337 billion U.S. dollars exceeded Exxon Mobil with a market value of about 331 billion U.S. dollars in one fell swoop on Wednesday, becoming the world's highest listed company with market value, ushering in its memorable peak. Behind the market value rankings, not only is how a company rises quickly to make a fortune, but also the game between new and traditional industries, and the future development trend of the world's leading companies. At the same time, worthy of reference by Chinese companies, in addition to Apple's powerful innovative technologies and supply chain control technology, as well as the current and future difficulties are facing or will face, but also we need to take precautions.

Industrial change behind market value rankings

Is it better to sell oil than sell apples? The world's first market capitalization is officially changed hands, and the innovative company Apple has surpassed Exxon Mobil, the world's oldest leader in the world, for many years. Behind the rankings of the global market capitalization of the two companies with distinct industries and styles, it also reflects the changes in the trends of the two industries.

Innovative Enterprises vs Traditional Enterprises

For the top market value of Apple listed global listed companies, Li Jianjun, vice president of the Central University of Finance and Economics, told the First Financial Daily that this shows that the development prospects of investors such as Apple's innovative technology companies are more promising than those of traditional oil and banks. The outlook is more promising.

However, he believes that if companies like Apple do not maintain innovation and do not continue to introduce new products, the market value may fluctuate greatly, unlike the relatively stable market value of traditional companies such as oil and banks. Globally, industries such as oil are prone to large-cap value companies.

In the 2010 "Financial Times" global listed company's market value rankings, China National Petroleum Corporation has also won the world's top market capitalization. Li Jianjun said that in China, central and state-owned enterprises occupy an important position. Before the listing of these companies, the total share capital is relatively large. As some state-owned shareholders promise not to reduce their holdings, circulation of equity capital will be reduced, which will help increase premiums. In fact, in recent years, the world has paid more attention to innovation, and it has given more premium to innovation.

The rapid growth of the market value of companies such as Apple, in addition to its own innovative industrial chain, high value-added products, but also because of the industry in which it relies on the Internet market trends, so the development prospects are considerable. Li Jianjun believes that although there are also good technology companies in China, the difference lies in the fact that Chinese companies have relatively few innovations, especially less original technologies.

Shi Guangyao, director of the China Market Value Management Research Center for Listed Companies, also stated that it is no accident that these US technology companies are at the top of the market value rankings. For decades, the United States has always been the “kingdom of patents” in the world. Its patent applications have surpassed the sum of other countries in the world. A large part of the company’s sales revenue is used to invest in innovation and R&D, especially original R&D. However, the innovation and research and development of Chinese companies is insufficient, and more is still imitated, digested and absorbed.

Defects in China's industrial structure

Shi Guangyao stated that there are many indicators in the global corporate rankings. The way the market value rankings are compared to the sales rankings can more comprehensively evaluate the status of various aspects of a company, including sales, business models, profitability, and growth.

According to Forbes' latest "Global 2000 Leaders" data compiled in April 2011 ranked 100 global company's market capitalization, distributed by country, the United States 38, China 10, the United Kingdom 8, France 6, Germany 5 .

China ranks second in terms of the number of companies listed, followed by PetroChina, Industrial and Commercial Bank of China, China Construction Bank, China Mobile, Bank of China, Agricultural Bank of China, Sinopec, CNOOC, China Life, China Shenhua, all of which are large state-owned or state-owned Holding company.

Shi Guangyao said that China's list of companies are concentrated in resource-based companies and monopolistic enterprises, while the US’s top 100 global market capitalization companies occupy 38 industries and are widely distributed, with the exception of oil, banking and telecom giants. There are software, hardware, pharmaceutical companies, merchandise retail, household chemicals, entertainment, media, food and beverage, catering services, and construction. The overall strength is evident.

“If the industry can't develop in a balanced manner and go hand in hand, it will have a big impact on the long-term growth of the Chinese economy in the future.” said Professor Chen Wei of the China Center for Economic Research at Fudan University’s School of Economics, because many industries are complementary and complementary, even if they are high-end. The industry also needs the cooperation of low-end industries. The transformation of China’s economic development model should support more development of multiple economic components, creating a fair competitive environment and a relaxed business investment environment.

Chen Hao believes that in China's non-resource and monopoly industries, the development of traditional industries is not a long time. Some of them are not developed in an environment of equal competition and openness. Therefore, the future growth of these industries will take some time. In some emerging industries, although late starters do not mean that there are no advantages, companies like Taobao and Alibaba are rapidly developing.

Apple Gene

Apple overtaking Exxon Mobil is worrying about another IT company, HP. After becoming the world's most valuable listed company, people began to speculate that Apple may reach another milestone next year - from HP to become the world's largest technology company. According to HP’s latest quarterly earnings report, its revenue was US$31.6 billion, and Apple’s latest quarterly revenues were close to US$28.6 billion.

Why was Apple, once bankrupt, bankrupt to create today's "miracle"?

"A lot of people rated Jobs as Apple's spiritual leader, but in the final analysis, he is essentially the best product manager." Li Yi, secretary general of China Mobile Internet Industry Alliance, commented. Apple is not the inventor of the computer, but Apple Computer is always eye-catching. Apple is not the inventor of the music player, but the iPod is popular around the world; Apple had not done a mobile phone before, but the iPhone soon surpassed. The old Motorola, Nokia, and triggered the industry's touch screen boom; before Apple had countless tablet computers folded the market, and the iPad's emergence has led to a new wave of cottage, pushed the e-books to the edge of the market......

However, when people attribute Apple's success to launching a stunning product, perhaps we should explore the business model that it establishes through hardware products.

In the path of Apple's revival, iPod contributed. In 2001, there were a lot of MP3-like music players on the market. But what Jobs envisaged was an upcoming change in the music field: traditional music's profits are declining, and music fans are more willing to download music from the Internet rather than buying records. Thus, the innovative design of the iPod+iTunes portfolio brings a unique user experience: the presence of iTunes allows more people to easily download and organize music, which greatly promotes the sales of the iPod, which thus creates a new business model: Combining hardware, software, and services creates a digital media distribution channel.

Some people call this model Haas (Hardware as a service, Hardware, as a service), after which Apple made the same way on the iPhone and iPad and built a complete industrial chain ecosystem through the online store App Store.

Li Yi said that in the past, mobile phone sales were all a one-shouldered deal. Users want to have more new features and must replace their mobile phones. Apple, on the other hand, has created a variety of applications on the basis of hardware. This is why Apple is attracting users outside its design. The important reason.

Outside of Google, Apple's rivals Nokia, Samsung, Sony, and even telecom operators are all rapidly copying the Apple model. Although few are successful, HTC's market value can surpass Nokia this year, which mimics Apple’s Android.

Although Apple has been criticized by the public for its closure, industry statistics show that currently there are 425,000 applications on Apple's App Store, which is more than double the number of Google Android's 200,000 apps; App Store downloads It has exceeded 15 billion times and left behind 4.5 billion downloads of Android app stores.

One noteworthy phenomenon is that Apple’s revenue from the app store is less than half its net profit. App Store software developers earn more than $2 billion a year in revenue from app sales, and Apple’s third-quarter earnings report as of June 25 showed Apple’s net profit for the quarter thanks to the iPhone and iPad’s sales. 7.31 billion U.S. dollars, higher than the 3.25 billion U.S. dollars in the same period of last year; operating income climbed 82% to 28.57 billion U.S. dollars. Li Yi believes that Apple is using almost 10% of software services to shake 90% of hardware sales.

However, after winning the throne of the world's number one, how does Apple continue to "keep fresh"? Silicon Valley senior analyst Rob Endler summed up Apple's strengths as follows: A group of geniuses gathered around CEO Steve Jobs and thought about how to “sell dreams”. If Jobs's aura is reduced, will there be still talented geniuses willing to work for Apple? Can Apple maintain its imagination and creativity? Perhaps the new problem is facing Apple.

Vendors Accelerate Vertical Integration - Apple Cost Control

During the first two years, when Zhou Xuejun, the LED chip manufacturer Philips Lumileds’ Asia regional marketing director, introduced the company's high-power LED chip products, Philips Lumileds was often the supplier of Apple iPhone 4 camera flash as a simple example to explain the quality of the company's LED chip products. The superiority of performance.

For a company, being able to become a supplier and foundry of Apple products not only means that the growth of the company's performance will “leap the Dragon Gate”, but also boost the company’s reputation in the industry and become a sign of superior quality and performance of the company’s products.

But the subsequent Apple supply chain cost control technique is bitter and sweet, and only the parties will know.

Apple Aura

In the following few days of the publication of the Leybold Transtech Services (002106.SZ) financial report, Leybold Tech's share price fell sharply, falling more than 20%, and institutional investors fled.

The reason for this is simply that the company’s earnings forecast for the first three quarters of the company is only 271 million yuan, which has narrowed the growth rate to 10% to 30%. It also led institutional investors to speculate that Leybold Tech has been abandoned by Apple’s supply chain. The concept stock "halo" has ceased to exist.

Lai Bao Hi-tech executive secretary Du Xiaohua said yesterday to the “First Financial Daily” that some of the company’s customer business extended its integration into the upstream of the industrial chain, and touch-screen products had significant price cuts in the second half of the year, which brought challenges to the company’s operations and product sales.

Some of the customers mentioned by Du Xiaohua are actually Tektronix Technology (TPK), which is a core supplier of Apple's touch screen modules for Apple iPhones and iPads.

Lai Bao Hi-Tech's 2010 financial report shows that in 2010, LEYBOLD Gaoke's net profit was 451 million yuan, a year-on-year increase of 155.35%. Its touch screen production line and technical transformation project equipment were put into operation in the year. In 2010, the proportion of single customer sales reached 40.61%.

Obviously this surge in performance came from Apple, because in 2009, the sales of the top five clients of LEYBOLD Hi-Tech accounted for 48.9% of total revenue. The problem is that Leybold Tech's dependence on Apple's orders is also growing. In the first half of this year, orders from Apple accounted for a further 52.22% of the total revenue of Leybold's.

Cost Control

“Jihong Technology will not immediately abandon LEYBOLD, and it should significantly reduce the number of orders and reduce the purchase price.” Shenzhen, a high-level touch-screen manufacturers, pointed out that in May of this year, Hi-Tech acquired the same products as LEYBOLD Hi-Tech. Taiwan's Ta Hong, a 19.9% ​​stake, became its controlling shareholder. The main reason for the acquisition was to vertically integrate the industry chain and further reduce product costs.

A production supervisor who once worked at Foxconn stated that in order to further reduce manufacturing costs, Apple’s suppliers to a certain accessory do not have uniqueness, often a large order down, and several major suppliers of an accessory will strive for more. Get more orders at low prices. After several rounds, suppliers' profits are often squeezed to the limit.

The production supervisor pointed out that Foxconn Technology Group has therefore established Xincheng Technology to cut into the touch screen field, hoping to grab orders from Haohong Technology and gain more profits from Apple.

"Actually, Apple also hopes that Foxconn will go up, so that the cost of Apple's supply chain will be lower. Foxconn holds 90% of iPhone assembly, all of the iPad assembly, if the lower and upper integration costs are lower, Apple's gross profit will only be higher." Production supervisor said.

Apple's pressure

Apple's constant change of suppliers, lower production costs, but also from Apple's own operating pressure.

At the end of last year, major manufacturers launched a variety of tablet computers, but Apple's iPad market share has always been more than 50%. The underlying reason is that tablet PCs whose performance can compete with the Apple iPad have no advantage in terms of price. The tablet PC with price advantage is far inferior to the iPad in performance. As a result, iPad1's price was reduced and its inventory was fully reversed.

This situation seems to be exactly the opposite in the smartphone market. Android phones are not only similar in performance to or equivalent to the iPhone, but also have a far better price than the iPhone, and the market is naturally at a glance. For example, the market price of the 3.5-inch screen Android phone of ZTE and Huawei was about 1,500 yuan at the beginning of the year, and now it is only 1,000 yuan. Market sales have also risen as prices have fallen. In the first half of this year, ZTE’s terminals shipped 60 million units, mobile phone shipments reached 35 million units, and smart products shipped 5 million units, ranking the fifth in the world.

Who is Apple's "myth" terminator after the world's largest market capitalization?

"At least three years ago, Apple could not find an opponent." Yang Shengfan, deputy director of the Taiwan Institute of Industrial Development in Taiwan, said in an interview with the "First Financial Daily". Li Yi, secretary-general of the China Mobile Internet Industry Alliance, also believes that Apple's brilliant estimate can last for 2 to 3 years. By then, Apple may face real threats and challenges.

Jobs Health Issues

Steve Jobs’ health has always been seen as the most significant factor in the fate of Apple. However, this may not directly shake Apple's roots. Yang Shengfan said that even if Steve Jobs died, Apple can still maintain stability and continue to lead in three years.

It is understood that although the specific products and strategies were roughly clapping by Jobs three months before the official release, their product plans have generally been delineated in the past two years or so. Apple’s internal strategy has been instigated in advance and can roughly cover the plan for three years. If Jobs dies, his successor can still follow the rules. There will not be much problem within three years, but the impact after three years will be difficult to assess.

Even in addition to Steve Jobs, Apple's previous road, there is still a crisis of potential "three-year crisis."

Android camp containment

At present, the most taboo enemy of Apple is the Google-led Android camp. They are using a multi-brand "sea tactics" to contain apples.

According to statistics, 500,000 Android devices are activated every day in the world. According to statistics from comScore, Android and Apple iOS’s market share in the second quarter was 40% and 26.6%, respectively. It is worth noting that Android’s share is rising. Gartner expects that by 2012, there will be 49.2% of smartphones shipped worldwide using the Android operating system, while Apple’s iOS system accounts for only 18.9%.

Google is stepping up its tight rhythm. The Android 4.0 system was originally scheduled to be released at the end of this year. However, in the face of the new iPhone, Google has accelerated the development schedule and is expected to provide it to mobile phone manufacturers in October so that it can be launched before the launch of the iPhone 5. Comparing with Apple's iOS and iPhone, iPad, the new Android system will be compatible with smartphones and tablets.

What is even more lethal is that, behind Android's “machine sea,” Google has been promoting cloud computing and cloud application services.

Apple is clearly aware of the threat. In the second quarter of this year, they also announced that they will provide iCloud, a free cloud storage service for users, and invest heavily in building cloud computing facilities.

System closed and other features

However, the disadvantages of the number of terminals and the fact that the system has been closed have made Apple's cloud application plans unfavorable.

He Gang, head of Shanda Cloud Computing, who was responsible for Amazon's cloud storage project, also believes that Apple’s previous APP Store is a relatively simple digital distribution system and has little technology and experience. In contrast, Google’s Android is more likely to win in the era of cloud computing applications.

Yang Shengfan believes that the current 3.5G communication network has a maximum data transmission rate of 7.2M/s. Under this background, more mobile Internet applications are still based on client programs. When the 4G LTE network speeds up 100 times, cloud computing based on the network will become the mainstream.

Linear development ills

At the same time, after the peak, Apple may also be able to escape the catastrophic hidden disease - big business. Yang Shengfan believes that Apple has fallen into a situation where it can only continue its linear development path, and continues to expand its product line. From iPods to iPhones, iPads, to smart TV products, they are invading more and more areas based on flat panel display technology by vertically integrating software and hardware routes.

“Apple is currently considering how to develop new products with existing product lines, how to introduce more APP software, and how to increase advertising revenue. Apple is clearly not going to try to change.” Yang Shengfan believes that Apple is likely to copy the previous generation of IT industry " The fate of "Giant" Microsoft will not be able to make changes spontaneously after it has achieved great success in both the industrial development stage and the business model.