What Apple needs to do to become the world's first trillion-dollar company

 
Shruti Tripathi Chopra
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Apple's New iPhone X Goes On Sale In Stores
CEO Tim Cook will need to overcome some hurdles if Apple wants to become a trillion-dollar baby (Source: Getty)

It hasn't exactly been a happy new year for Apple. The tech giant rang in 2018 apologising to customers for deliberately slowing the performance of older iPhone models in a bid to spur new purchases. And this week, Apple investors Jana Partners and CalSTRS ­– which together own about $2bn of the company’s stock – ramped up pressure on the iPhone maker to address the effects of its products on children.

Apple has a lot riding on 2018 – the year it is expected to become the world’s first trillion-dollar company. But to hit this mega milestone, Apple has to jump through some tricky hoops.

Sales of Apple’s star product, the iPhone X, were stellar in multiple markets around the world, including the UK, for the three months to November.

Read more: Apple shares climb to an all-time high

However, analysts have lowered iPhone X shipment projections for the first quarter of this year because of slowing demand at the end of the holiday season. Shipments are predicted to drop to 25m units in the first quarter of this year, down from 30m in the fourth quarter of 2017. Sinolink Securities analyst Zhang Bin said the high price may weaken demand in the first quarter, and therein lies Apple’s biggest obstacle. The tech goliath needs to push tech boundaries that justify product pricetags in the way that other tech titans sure are.

Amazon, which is also tipped to become a trillion-dollar company this year, wowed nerds at the Consumer Electronics Show (CES) in Las Vegas this week with digital glasses compatible with its voice assistant Alexa. Another one that got people talking was a partnership with Kohler to make Alexa fill up bathtubs and flush toilets. All these innovations are expected to come at a price that does not break the bank.

Read more: Apple pays extra £136m in back-taxes to UK government

Apple, which does not attend the tech show, is not known for launching products as quickly or as inexpensively as its peers. This, analysts say, could hit its fanfare.

No doubt Apple has come a long way from laptops and an over reliance on smartphones. Its superlative services business, which includes iTunes, Apple Music, Apple Pay and more, is a fast-growing arm that can easily keep customers hooked and investors happy.

But with its market cap currently just shy of $900bn, investors will be closely watching Apple’s growth strategy when it unveils its first quarter 2018 earnings on 1 February. No pressure, Tim Cook.

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