My father is an engineer. He wanted me and my siblings to be engineers. We chose different paths but all of us have a love for logic, math, and how things work. I’m into recipes and dissecting gibberish. I could be a political commentator. There’s a lot of gibberish in politics.
Funny thing. True story. There’s a lot of gibberish in technology land, too. That means there is ample opportunity for someone with genes deeply rooted in engineering, logic, and math to dissect some of the more outlandish theories, prognostications, and ridiculousness floating around as news.
The Fortune 500
For anyone who’s read Fortune magazine then they’re familiar with the Fortune 500. It’s probably not a perfect list, but it comes out every year and thought the methodology has changed a bit, it’s a good way to compare U.S.companies. And, despite having tens of billions tucked away in overseas banks, and manufacturing partners in China, Apple still claims to be a U.S. company.
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks 500 of the largest U.S. corporations by total revenue for their respective fiscal years. The list includes public companies, along with privately held companies for which revenues are publicly available. The concept of the Fortune 500 was created by Edgar P. Smith, a Fortune editor, and the first list was published in 1955.
The rankings of the Fortune 500 don’t change too often at the top, but it will give you an idea of how some are doing. And, with a little detective work, we’ll find out how Apple’s poor products fare against real live companies.
Who’s on top? Walmart, of course, and it’s not even close. If profits had their own list, Apple would be on top, but as it is, the company sits slightly behind Exxon Mobile and ahead of Berkshire Hathaway. The rest of the top 30 or so are littered with car manufacturers, cell phone companies, grocery stores, drug stores, computer makers, health care, drug stores, and a few banks.
As a point of reference, Microsoft is #25, AT&T is #10, Alphabet Google is #36, and Amazon is #18. Apple is #3, and with dropping oil prices, may gain the #2 slot. But how is that possible if Apple’s products are in danger? After all, a new iPhone killer is born every few months. The Mac is a victim of the post-PC era. The iPad is falling on its face. And the only saving grace the company seems to have is the Services group (everything else) which is wholly dependent upon Apple’s hardware sales.
Allow me to do a little dissecting and some math on Apple’s financials.
Apple once was synonymous with the Mac. If the Mac had just over $20-billion in revenue in 2016 it would rank in the top 130 ahead of Staples, Progressive, and Starbucks. Not bad, huh? Of course, iPhone revenue as its own company would still be in the top 10. How about that disastrous iPad business? Annual revenue is just slightly lower than the Mac, but still in the top 130 or so.
What about Apple Watch? The product is a dud, right? Everyone says so. Apple doesn’t break out Watch numbers, but conservative estimates put annual unit sales at around 12-million, and with an average selling price around $450 annual revenue seems well north of $5-billion. That puts Watch in the Fortune 500 all by its lonesome. That Services catch-all group that analysts tout as Apple’s future is a Fortune 130 company by itself.
That brief and unofficial analysis of basic guesstimates gives Apple five products which by themselves would be in the Fortune 500; one of them in the Top 10.
Not too shabby, huh?