The ‘pad is Mightier than the Pump

For the second time in the last few months, Apple has passed ExxonMobil in market capitalization, to become the most valuable corporation on earth, worth some $468 Billion, as of Friday, compared to ExxonMobil’s paltry $405 Billion.  However you shake it, that’s a lot of iPads – or gas station visits.

Though this is the second time Apple has surpassed Exxon in market capitalization – the first being August, 2011 – this time around it seems much more permanent.  With Apple stock sitting squarely above the psychologically important $500 mark, and with many analysts suggesting it may come close to $600, Apple seems, uh, pumping with gas.

There remains a number of interesting questions about Apple:

1. Hail to the Chief: It seems like CEO Tim Cook, who took over shortly before the passing of co-founder Steve Jobs in October, has the reigns firmly in hand, and is eminently capable of producing the same gorgeous, crowd-pleasing products that his predecessor oversaw.  Can he keep it up?  It seems just about definite.

2. The $100 Billion Question: What will Apple do with $100 Billion in cash?  Some say that the company will start to issue a dividend – ExxonMobil has kept a steady 2.5% dividend for a while, now.  It may also seek to buy up smaller companies that might help it tighten its notoriously intricate supply chain, as it did with Anobit, an Israeli flash memory maker, in early-January.

3. iPhone: Apple’s iPhone – the handset that literally changed the world – has come to face opposition in the form of Google’s Android operating system, though it maintains a very healthy – and very lucrative – 24% of the smartphone market.  Moreover, its iOS and App Store still offers an unparalleled – and seamless – user experience, something that Android has struggled with.  That said, recent Android models, most notably Samung’s Galaxy Nexus, which sports Google’s latest Ice Cream Sandwich update, have given the iPhone a run for its money.  The iPhone 4S has sold well, but did not offer the same revolutions in hardware that its predecessors did.  Then again, once you’ve conquered all the world, what else can you do?  Only the iPhone 5 will tell.

4. iPad: That, like their other products, the iPad has come to be a synecdoche for the tablet market speaks to Apple’s unbelievable control over user experience, marketing, and production.  The iPad 3, likely to debut in March, will likely make modest improvement in battery life, possibly offer Siri, and might also beat your washing machine in an arm-wrestling match.

5. Apple TV: One area Apple hasn’t entirely upset – yet – is TV, which is largely home to internet streamers-cum-living room supplanters Hulu and Netflix.  Google continues to make stabs at the market with GoogleTV, though it’s yet to truly make inroads.  It is eminently possible that Apple will somehow leverage its iPhone/iPad dominance to upset the television world, in much the same way that it overturned the music and telecom industries with the iPod/iTunes and iPhone, respectively.  However, it faces tough competition from aforementioned Google, Netflix and Hulu, as well as Amazon.

There remains a number of interesting challenges on Cupertino’s horizon, but if history is any indicator, Apple will meet them in full force – and stylishly.  Their success until now has even lead industry analysts to consider producing S&P figures, sans Apple.  Steve would be proud.

Disclaimer: I hold stock in ExxonMobil.