Just how amazing were Apple’s Q1 2015 earnings results? So amazing that the company is seemingly shredding years’ worth of conventional wisdom about how much an established firm can keep growing. Jean-Louis Gassée at Monday Note has written a tongue-in-cheek look at all the “laws” of economics Apple has broken with its record-crushing earnings report and he explains why some of these laws were highly questionable to begin with.
The first law that Gassée says Apple has broken is the Law of Large Numbers, which predicts that as companies get bigger and bigger, their ability to produce rapid growth diminishes. However, despite being the biggest tech company in the world in terms of market cap, Apple last quarter continued to grow at astonishing levels.
“Last quarter, Apple revenue grew 30%, breaking the Law and any precedent,” writes Gassée. “iPhone revenue, which grew 57%, exceeded $51B in one quarter — close to what Google achieved in its entire Fiscal 2014 year. Right now, Apple is ‘guiding’ to a next quarter growth rate that exceeds 20%. For the entire 2015 Fiscal Year, this would mean “finding” an additional $37B to $40B in sales, more than half a Google, and a little less than half a Microsoft.”
Further along in his piece, Gassée takes on the notion that winning in market share means winning overall. While it’s true that Apple has lost the market share battle in the PC and smartphone markets to Microsoft and Google, respectively, it’s also true that the slice of market Apple holds also happens to be the most profitable slice by far.
Gassée’s full analysis of how Apple is breaking economic “laws” is worth your time and can be found at the source link below.