The New York Times prognosticates about LLN (the Law of Large Numbers; aka LOL numbers) when it comes to the limits of just how big, Apple can continue to grow.
The thing is this though… laws, like most everything that we know of, are human derived concepts meant to give us some point of reference that our brains can easily interpret. Everything we know of are human defined abstractions including these bits of characters which we call alphabets. As such, something like the law of large numbers is just that, a concept which has limits on them only because those who lack the capacity to think outside the box, are unable to wrap their minds around, because they are bound to previous standards and rules of normalcy.
But just what is normal? Note the article uses prior examples of how other companies have hit a wall as a result of the LLN and therefore, tries to extrapolate how this will also affect Apple. While I understand and am not naive to how the LLN works (i.e. its easier to show growth starting off from a low number, easier to double your market capitalization from a smaller total cap, etc), Apple as a company has proven to be anything but normal. Therefore, trying to apply cookie cutter metrics to it can be perilous to those who solidly believe that Apple cannot continue growing at the pace that it has been for at least a few more years.
Comparing it to Cisco during the tech bubble is also missing the forest for the trees. That era was a period of giving companies sky high P/E ratios which were never based in any sort of reality. Apple in the past few years has actually been undergoing P/E compression despite showing massive earnings growth. It also grew revenues despite the fact that part of this occurred during a recession. And you can’t eat an iPod touch, iPhone or iPad, which puts into play, the notion that some of these pieces of technology are now considered “necessities” in our modern day lives. I wouldn’t consider them “necessities” in the same way that food is; what I’m saying is there is a hierarchy at play and that these pieces of technology are at a lower level on that necessity hierarchy in a modern society.
If you were to look at Apple’s success at a more granular view, it’s always been something transformative in nature. So if one wants to be able to extrapolate potential avenues of growth, one has to look at what currently exists, and theorize how Apple could eventually enter those markets, and disrupt it by simplifying things. In that regards, there are other areas which Apple could transform but just as with prior areas, all the pieces needs to be in place, and the timing right. The one everyone is looking at is the television arena, mainly because of the tidbits which came out of Walter Isaacson’s biography of Steve Jobs. Whether Jobs said this as actual truth, or as a head fake, will eventually be known. No one to date however has managed to crack the living room and take the inane complexity out of it.
But there are other areas which Apple could literally take over including watches (the iPod nano is being used to do that but what if Apple pushed their industrial design over to actual watch designs, powered by an even further scaled down, iOS), alarm clocks, etc. And while I’d like to see an actual iOS powered DSLR/DSLT sort of camera, I don’t think Apple is going to venture into the photography/HD video realm in terms of form factors specific to that market (a bummer because the UI for settings on most high end cameras suck).
Because of that, I’m also one of those who believes that for the moment, one cannot look at previous market capitalization ceilings, and apply it to Apple. The company has in its DNA, many individuals looking for opportunities where peoples lives can be improved. Additionally, Apple has a scalable software platform which makes some of these possibilities real, should the company decide a market is worth pursuing.
