Apple Computer closed at $702.10 per share on September 19, 2012, making it worth roughly $656 billion, and the most valuable company listed on US stock exchanges. The iPhone 5 was released on September 21, 2012, a couple of days after the stock finally breached the $700 per share threshold. Since then the share price has acted a bit like a Facebook IPO, tumbling in fits adn starts downhill.
The stock now stands at roughly $640 per share, trimming about $56 billion off the company’s market value over the course of a little more than two weeks. Its market capitalization, at roughly $600 billion now, still makes it more valuable than a year’s worth of Belgium’s output (about $513 billion) by almost a $100 billion and over double that of Chile’s (about $248 billion). Just the drop in Apple’s market value over the last two weeks equals about a year of the Dominican Republic’s output ($56.7 billion), a country of ten million. (All GDP statistics cited were 2011 estimates retrieved from the CIA World Factbook).
Apple’s market cap, even at $600 billion, would rank it at 26th in the world in terms of purchasing power parity, behind Thailand and before South Africa. Admittedly, this compares apples to oranges, as market capitalization is a static snapshot of enterprise value, while PPP, or GDP, is a measure of the volume of economic activity over a period of time for a country, but it helps put things in perspective. Apple’s revenue–more closely comparable to PPP–over the most recent four quarters (ending in June of 2012), was $150 billion, which would rank it at 61 in PPP, ahead of Iraq and its 31 million people, but behind Belarus, and its 9.6 million souls.
Apple has about 60,000 employees worldwide, most of them in the US, about 35% of whom work as “geniuses” and sales reps in its retail outlets.
I wonder, does Apple see any inherent economic imbalances with this picture? A company that employs only 60,000, and many of those for little more than the absolute minimum required to coax them into showing up, expects to sell seventy or so million iPhones (among other things) again this fiscal year (at $650-850 per phone). Yet it employs only a small fraction of the people who might constitute the market for the iPhone. The money for the iPhone purchases have to come from employment and employees outside of Apple. Perhaps the profits generated by the iPhone sales will be channeled into demand for things Apple does not produce (like food), spurring employment, so people can purchase iPhones. Or perhaps the profits will pile so high and become so concentrated with Apple executives and shareholders that it all collapses from the weight of the imbalances. Rich people (Apple executives) are not overly reliable consumers. To meet their needs requires only a small portion of their income and wealth. The poor snots trying to buy Apple’s phones are presumably not so enviably situated.
Apple Computer, however, offers an almost perfect example of the dilemma faced by capitalism and capitalists. Concentrated wealth is inherently unstable. The capitalist’s compulsion to reap as much in profit as is possible will leave the markets to which his endeavors are directed in peonage, unable to buy his wares, as the wages paid to the workers for whom he ostensibly produces won’t allow them to purchase the output of their own hands. Demand will crash (1929 & 2009) and the social fabric will be rent at the seams. Capitalism will learn that capitalists have no hope of getting defensibly and sustainably rich without which they bring a broad measure of the population along with them (what was once called the middle class).