Joseph Mariathasan wonders what, if anything, can check the technology giant’s astonishing growthApple was valued at more than $770bn (€687bn) at its peak in February, making it by far the single-most valuable listed company on the planet. Despite its mammoth size, its chief executive, Tim Cook, announced that it could grow at a rate more akin to a start-up. But how large can a company grow? For some companies, there may be a clear upper limit – how many cans of sweetened fizzy drinks can Coca-Cola sell to a global population, with increasing worries over an epidemic of obesity-related afflictions such as diabetes?That may be a reasonable question to ask of Coca-Cola, but can an analogous question be asked of Apple, with an enormous market, global distribution and a strong brand that, despite being enormous, still has a lot of growth in front of it? Will the limit to Apple’s growth be set when every person on earth has an iPhone?Mega companies were clearly growth companies at an early stage of their lives to reach their gargantuan sizes. But, at what stage should mega-cap mega brands be seen as purely post-growth and value/dividend plays? Deciding when a company such as Apple has reached that position is unclear. The limits to growth are clearly dependent on the business strategy a company chooses to follow. Apple is clearly not a one-trick pony. It is not just a hardware company like Dell, having built an ecosystem around a seamless integration of innovative products and applications way beyond production of commodity hardware. The limits to growth are further away for companies with three key characteristics. First, as famously outlined by Warren Buffet as the companies he favours, are those with an economic moat that protects them against competitors, with a well-known brand name, pricing power and a large portion of market demand. This can provide the ability to grow enormously, but, sometimes, disruptive technologies can overwhelm even the widest moat. Kodak is a classic example, where its domination of photography could not withstand the impact of digital technology. But Apple has become the ultimate consumer brand, with the ability to create interest in any new product or variation of an existing product by just adding the prefix ‘i’.A second economic driver for growth also requires high-quality companies to be able to get better as they get bigger. Bigger does not always mean better, and the banking industry is the prime example of this. Citibank has a global footprint, but its value lies in having a few particularly strong local franchises in countries like Mexico.The insurance industry is another case in point. Life insurance and property and casualty insurance are locally regulated and require capital to be domiciled in local markets, giving few benefits in size, beyond reducing the overall volatility of results. Reducing volatility benefits senior management but not shareholders who could gain equivalent diversification themselves. At the reinsurance level, however, size can bring benefits because of the nature of the business and the size of the transactions. For Apple, the iPhone ecosystem that has grown is a classic example of something that gets better the bigger it grows.The third key characteristic that virtually all mega companies have is the ability to seek customers in the emerging markets.Any constraints to its size are further away for Apple than for most other companies, as it has all the three factors for growth in spades. So what can be the limits to growth for Apple? “The biggest risk for most of the companies we own is anti-trust regulation in the US that will force them to split apart,” said one fund manager on his Apple weighting. “We don’t like that problem, but we certainly prefer it to others we might have!”That is exactly what happened to the old AT&T, which once dominated the US telephone market and was forced to split up in 1982 into seven regional telephone companies – the ‘baby Bells’. That is unlikely to happen to Apple, given that it does not operate in oligopolistic markets and its innovations have attracted rapid and ferocious competition.There appears to be no limits to size for Apple. But then, AT&T, at its height, employed 1m people. Apple employs less than one-tenth of that. A great investment for its shareholders but perhaps also a sign of the problems society faces with the new generation of mega companies that are great at producing returns for shareholders but lousy at producing jobs.Joseph Mariathasan is a contributing editor at IPE
Lawrenceburg, IN—The Management Team of Special Olympics Indiana – Ripley Ohio Dearborn Counties announces with deep regret and concern the cancellation of our 9th Annual Fire Truck Pull in partnership with the Lawrenceburg Fire Department. After much thought and discussion, the team decided to not host the 2020 fundraiser due to the COVID-19 pandemic. Currently, all Special Olympics’ in-person practices, competitions, events, and social activities at all levels of the organization have been canceled through June 30th. In these unprecedented times, the team realizes there is no guarantee that all restrictions will be lifted in time for the fundraising event scheduled for August 15th. “The decision was not easy”, stated Greg Townsend, Program Coordinator of Special Olympics Indiana-Ripley Ohio Dearborn Counties. “Especially since the proceeds generated by the Fire Truck Pull are used to fund our fall and winter activities, if Special Olympics Indiana and Special Olympics International should decide to lift the suspension due to the pandemic”, added Townsend. According to the CDC, people with intellectual disabilities (ID) or developmental disorders are at increased risk of contracting COVID-19. In addition, people with ID experience higher rates of chronic health conditions that also put them at higher risk of serious illness and poorer outcomes from COVID-19. Special Olympics competitions and events are opportunities for entire communities to come together in support of Special Olympics’ vision. But, unfortunately, that joining together poses significant risks for everyone involved. The Fire Truck Pull, presented by the City of Lawrenceburg, would not be possible without the many volunteers, the Lawrenceburg Fire Department, and sponsors that contribute to putting on such an event each year. The Management Team and the Fire Truck Pull Committee looks forward to the 2021 Fire Truck Pull and hopes to see the return of all Pull Teams and sponsors.
The youngster has been in fine form for club and country over the past few weeks with his performance last weekend against Watford catching the eye. Iwobi scored a goal and made an assist as the Gunners beat Watford 4-0.Nigeria won the Olympic football gold in 1996 in Atlanta with a squad that had Iwobi’s uncle Austin ‘Jay-Jay’ Okocha, Nwankwo Kanu and Victor Ikpeba.Current Under-23 coach Samson Siasia, was in charge at Beijing 2008 as Nigeria won the silver, losing the final to a Lionel Messi inspired Argentine side.The ‘Dream Team’ won the Africa U-23 Nations Cup in Senegal to book a ticket for the Rio Olympics with Siasia in-charge.The former FC Nantes striker will look to go one further than he did eight years ago in China.Share this:FacebookRedditTwitterPrintPinterestEmailWhatsAppSkypeLinkedInTumblrPocketTelegram Nigeria’s newest kid on the block, Alex Iwobi will likely miss Arsenal’s start to the 2016/17 season after indicating interest to play for Nigeria at the 2016 Rio Olympics this August.Iwobi, who made his international debut in the 1-1 draw with Egypt in a 2017 Africa Cup of Nations qualifier in Kaduna last month wants to line up for Nigeria’s Olympic side in the football event the commences on August 3.Arsenal begins the season ten days after the Olympic tournament starts and if Nigeria gets to the final, Iwobi will still be in Brazil by August 20, a move which might pop up a club vs country clash.
Ossie Ardiles believes Angel di Maria will be a big hit in the Premier League, but has told Manchester United supporters not to expect the Argentina star to solve all their problems.United are set to break the British transfer record by completing a £60million-plus deal for the Real Madrid forward.Discussing his fellow countryman’s impending move to Old Trafford, Ardiles told the Alan Brazil Sports Breakfast: “He can play in a lot of different positions. He can play right midfield, left midfield, he can play behind the two front players, behind one front player.“He is a very dangerous player, very quick, very creative and he can score goals, so he is going to be great for Manchester United. However, I don’t think he is going to solve all of the problems that Man United have at the moment.”