Apple Beats the World
For a short while on Tuesday, Apple was on top of the world. Sharp Wall Street declines on Monday were followed Tuesday with violent see-sawing, and at certain points in the day Cupertino's market cap exceeded that of Exxon, making Apple the most valuable publicly traded company on the planet, though its position didn't last until the closing bell.
08/10/11 5:00 AM PT
The financial world was whipped into a frenzy this week following Standard and Poor's decision to downgrade the United States' credit rating, and Apple investors have been taken for a wild ride.
After the country watched markets crumble on Monday, the Cupertino-based company's stock climbed Tuesday, propelling Apple's market capitalization to briefly surpass that of Exxon. That means for a short while, Apple was the most valuable publicly traded company on the planet at $346.74 billion.
As Wall Street's turbulence came to an end Tuesday, AAPL shares closed at $374.01, a gain for the day of nearly 6 percent but still a far cry from the record high of $404.50 that Apple hit just weeks ago.
The uptick wasn't spurred by any particular announcement from the company, although rumors that the iPhone 5 will be making its debut this fall, perhaps as early as September, certainly serve to propel market confidence.
"This past week wasn't too full of company news, but rather market news. Obviously the debt situation and the S&P ratings change weighs heavily on the company, Kevin Dede, analyst and managing director at Brigantine Advisors, told MacNewsWorld.
"The latest rumor is that the iPhone 5 is coming pretty soon, and those are the things to look at when seeing the market's reaction to the re-evaluation."
Patent Battles Continue
The habitual market darling didn't seen to be hampered by patent battles in which competitors Google and Microsoft became embroiled over the past week. Although Google lawyer David Drummond named Apple -- along with Microsoft and Oracle -- in a public blog post in which he criticized his rival's "bogus" patent tactics as an attack on Android, it was Redmond that was most visibly drawn into a public tangle.
The public battle was surprising since typically in cases facing litigation, both sides are advised to stay mum before a decision is reached. It appears Apple chose to adhere to that policy regarding to its particular lawsuits.
"I kind of liken it to a porcupine approach from Apple -- both parties have a lot of quills and neither one wants to get too close," Brian Marshall, senior equity analyst at Gleacher & Company, told MacNewsWorld.
Since patent battles are becoming more and more prominent in the mobile device industry, Apple will have plenty of wars to be won against other competitors -- as evidenced most recently in a lawsuit filed by LG that alleges the Mac OS X operating system infringes on a patent related to fast booting a computer system held by a company called "Operating System Solutions." The patent was originally held by LG, which has raised suspicion that the South Korean Android device maker may be playing a role in this litigation.
With the heavy crossover in "borrowing" technologies from each other, tech companies like Apple will have to make decisions about whom they fight.
"They want to choose carefully which battles they take on. Rather than going head to head with Google and Android, I think Apple, when you're looking at this whole IP battle, prefers to go after the hardware vendors as opposed to the platforms," said Marshall.
Apple did not respond to a request for comment by press time.
As September nears, so does the season for new iPods, and this year's batch could include the long-awaited iPhone 5. In addition, a new iTunes features called "iTunes Replay" was rumored to be launching soon, but later reports suggested the company is still trying to negotiate deals with content providers. The service would let customers download and stream movies and TV shows they'd already purchased from iTunes.
The technology seems to be in place for the feature, but the hold-up reportedly relates to the company's attempt to negotiate with film studios, who haven't been quick to sign on to the arrangement. Negotiations also get sticky because Apple has agreements with HBO and UltraViolet for exclusive digital download rights. A deal could most likely be made, but the players may in fact opt to wait it out as demand goes up.