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" 'The key factors behind its success have been innovation and design'

Apple finished the day with a market value of $337-billion, beating Exxon's $331-billion.

Ten years ago, Apple was 287th on the Standard & Poor's 500 market-cap list. But, by the start of 2011, the company had hit the $300-billion mark and has been in an upward trend since the middle of June, culminating in its Tuesday climb to the top of the global corporate heap, albeit temporarily.

At its current trajectory, it is only a matter of time before it entrenches itself as the world's number one company.

For some "new-economy" pundits this fact was trumpeted as proof that the new economy's time has indeed arrived.

However, analysis of the numbers shows that the change in position between Apple and Exxon was probably caused by the steep decline in the price of oil following the big market correction last week.

On most levels, Exxon is still a larger company. Its first-quarter profits of $10.65-billion surpass Apple's $6-billion. In terms of revenues, the gap is yet wider, Exxon's quarterly revenue grew 36% to $125-billion, dwarfing Apple's figure of $29-billion.

Arthur Goldstuck, digital industry expert and founder of Worldwide Worx, said: "The market shouldn't read too much into the Apple versus Exxon relative market cap values. Exxon dipped as a result of oil price declines, and rose again when the oil price recovered. As long as we have an oil-dependent global economy, and as long as we have industrial expansion, resources will play a dominant role in investment.

"At the same time, however, it is clear that tech has become more central to our lives than ever before, and it will keep expanding in tandem with economic expansion.

"However, any market crash will take tech stocks with it. In fact, tech stocks are probably more vulnerable than other categories to market weakness. It is the stand-out brands that will weather market storms rather than represent the future of the market."

Apple's rapid growth over the past decade is, nevertheless, impressive.

In the second quarter, according to Dow Jones, Apple's net income stood at $7.3-billion and it grew revenue by 82% to $29-billion.

In comparison, Exxon Mobil posted a 41% increase in its second-quarter earnings to nearly $11-billion, the largest since it set a record of nearly $15-billion in the third quarter of 2008.

According to AP Newswires it grew its net income by 70% to $14-billion and its revenue by 52% to $65-billion in the financial year to last September. Its balance sheet is in rude health, with cash reserves of $76-billion surpassing even those of SA, Africa's economic powerhouse, of roughly $50-billion.

The latest Apple quarterly report (second quarter) shows that revenue and income were boosted by stronger iPhone and iPad sales.

Goldstuck attributed the company's success to its unparalleled design and marketing skills.

"Aside from the marketing brilliance of Steve Jobs, the key factors behind its success have been innovation and design. All its devices set the benchmark for design and user interface against which all competing products are measured. But that would not have been enough without market-leading products. It began with the iPod, which still leads the portable music playing market and has about 50% market share for such devices in SA."

Goldstuck traced the rise of Apple's digital hegemony to the launch of iPhone and iPad, which have left the competition reeling.

"The real turnaround was the launch of the iPhone, which caught the phone market flat-footed. It remains tiny in SA in terms of market share, simply due to the marketing and distribution model behind it here, but is a dominant brand in the US. Even that, however, would not have been enough to push it past Google and Microsoft," he said.

"The tipping point came with the iPad, which is reinventing the computer market. In SA it has possibly been directly responsible for slicing away up to 20% of the retail computer market, as people decide to wait for tablet options before buying their next computers.

"The iPad has around 80% of the tablet market and is the device that has signalled the end of Apple's status as a bit player in the computer market. Ironically, even as it causes a dip in the computer market, it is driving up sales of other Apple computers - both globally and in SA," Goldstuck said.