Apple has a market capitalization of $785 billion, exceeding that of Microsoft and Exxon Mobile combined. Nevertheless, writes Jeff Sommer in the New York Times, “…the Wall Street consensus is that Apple is still having a growth spurt.” He cites some predictions that Apple could reach $1 trillion.
But by historical standards, Apple might not be all that dominant. At close on Friday, Sommer writes, Apple’s value had climbed to 4.1% of the value of the S&P 500, but in 1985, IBM—then at its peak—represented 6.4%, and it exceeded 4% for seven calendar years.
Sommer says IBM at its peak operated in a different league than Apple does now, with scientists engaged in deep, basic research. “A business machine company at its roots, IBM never aspired to pop-culture coolness, but its prestige was extraordinary,” he writes. “You can’t measure prestige easily with numbers, but consider that in 1987, two IBM scientists based in Zurich won the Nobel Prize in Physics for a breakthrough in superconductivity. It was the second consecutive year that IBM scientists won the prize; in 1986, two of them won it for inventing an instrument known as the scanning tunneling electron microscope.”
IBM subsequently struggled, and its market value today is less than a quarter of Apple’s, Sommer writes. In an effort to bounce back, IBM is teaming up with Apple and Johnson & Johnson—at fifth place in market capitalization behind fourth-place Google—as well as with Medtronic on health data initiatives based on the new IBM Watson Health Cloud cognitive computing platform.
Whether IBM grows and whether Apple stalls remains to be seen. But as Sommer concludes, “Rapid growth, after all, isn’t a sure thing, especially when you’re already the biggest company in the world. IBM has proved that.”
