Many people think that Apple, with its US$661 billion (£419.49 billion) market share, is the most valuable company in history. However, it hasn’t quite reached that status yet.
Much of the media’s attention focused on Apple after it beat Microsoft in terms of market value. Columbia Journalism Review declared that the world’s most valuable company is not Apple, but rather International Business Machines Corp, also known as IBM.
Excluding inflation, Apple’s US$661 billion (£419.49 billion) market capitalisation would have surely surpassed IBM’s market cap of US$192.3 billion (£122 billion) in 1967. However, taking into account that one US dollar (£0.63) in 1967 is now worth US$6.85 (£4.35), IBM’s value stands at US$1.3 trillion (£825 billion) and exceeds Apple’s by a long shot.
Nonetheless, Apple can still take the crown if it can sustain its growth. The New York Times reported that with market capitalisation of US$500 billion (£317.32 billion), the iPhone maker would attain a market cap of over US$3 trillion (£1.9 trillion) by 2020.
The New York Times also revealed that this market capitalisation is higher than the gross domestic product (GDP) of Brazil or France in 2011.
However, the market capitalisation of companies does not always follow an upward trajectory. It can also depend on the rules of economics such as demand, investor confidence, and earnings projections.
Moreover, a recession or a severe downturn could occur and these could greatly affect the companies.
For its part, IBM is one of the few information technology (IT) firms that has a history that goes back to the 19th century.