Apple is Almost Worth As Much as ExxonMobil–And That's Good News For the Planet

By Chris Mooney | October 19, 2010 9:14 am

apple-store-nyc4It’s corporate earnings season, and yesterday Apple  reported another stunning quarter–although iPad sales were a bit lower than expected, and shares declined after hours nevertheless. But who cares: Apple shares have careened to over $ 300 in value in recent months, and there are just under a billion of them out there.

What that means is that as of now, Apple (AAPL) is flirting with being a company worth over $ 300 billion. And what’s more, some analysts suggest there is still quite a lot of upside.

This shouldn’t only be of interest to investors. It’s of far broader political and cultural significance. You see, Apple is currently the second most valuable private company in the world–second, that is, to Exxon Mobil (XOM), which is currently worth about $ 338 billion.

There couldn’t be a more stark contrast between the new economy and the old than the comparison of these two companies–a sleek tech giant versus a dirty fossil energy monster.

The political significance of Apple surpassing Exxon in value–if it happens–will be huge. It’s not just about value, but values.

These two industries are vastly different, as are the people who work in them. We’re talking about the difference between the economies of Texas and California. We’re talking about the core divide over Prop 23 in California, where Texas oil companies like Valero are trying to come in from outside and defeat the state’s pathbreaking clean energy and climate law.

The folks at tech giants like Microsoft, Google, Apple–by and large, they get clean energy. They get climate change. Just listen to Bill Gates talk sometime, outline his view of the world. Check out Google’s green initiatives. Or take the example of Apple CEO Steve Jobs’ wife Lauren Powell Jobs, a big supporter of the campaign to defeat Prop 23.

Or go read the new book Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America, by David Callahan.

The liberal rich, and the tech geniuses in particular, know that there is another vast fortune to be made out there–and it’s not in computers, gadgets, or searches. No: It’s in founding the industry leader of the coming clean energy world.

Right now, the biggest company in solar, Tempe, AZ-based First Solar (FSLR), is worth about $ 12 billion. We don’t know who the Exxon–or the Apple–of this growing industry is going to be–and given how the US has lagged of late, it may well be a company located in Europe or China. But there will surely be one or a few major winners. And as that happens, politics and our society will change in close pace with these companies’ growth.

Overgrown subsidies for the fossil fuel industry? Those will be harder to defend in the face of the clout–political and cultural–wielded by the Apple of solar or wind.

Political policies that disadvantage clean energy, by letting carbon emitters do business without paying for the cost of what they’re doing to the environment? Picture what the Apple of solar or wind would have to say about that.

And picture how politicians–maybe even Republicans–would listen.

CATEGORIZED UNDER: Energy, Environment

Comments (16)

  1. Matt

    I’m all about clean energy, but good gosh, lay off the Exxon is a “monster” speech; it just makes you seem like a nut. Let’s see you enjoy your Apple products without oil (both for plastic components and transportation). I would LOVE to see all energy be clean and renewable, but until it is, how about you be thankful for the the industries that collect the materials that allow Apple to compete (oil, coal, mining). Sheesh.

    And don’t even bring up the “astronomical” profits of “big oil”. Apple makes $208 for every $500 dollar iPad they sell. That’s a 42% profit, FAR higher than companies like Exxon or Wal-Mart make. Meanwhile Wal-Mart and Exxon get hammered for making 11%, quarter to quarter.

    Get off the feel good train and actually think about this stuff.

  2. Jon

    Meanwhile, some of the same cast of characters are out with very large checkbooks building a parallel structure to the GOP and “rebuilding the Republican brand”:

    http://news.yahoo.com/s/yblog_upshot/a-citizens-guide-to-the-shadow-gop

  3. Patrick

    Your quick to compare the two companies as a sleek tech giant and dirty fossil energy monster. All of Apple’s products are only made possible due to energy of fossil fuels. I guarantee a vast majority of the companies electricity consumption is created from coal and natural gas. Renewable are good and should be implemented but you’re definitely a little too critical to ExxonMobil

  4. Jon

    OK, one more: “Rove Admits His ‘Shadow RNC’ Attack Group Functions Largely Because Of The Citizens United Decision”

    http://thinkprogress.org/2010/07/06/rove-citizens-united-crossroads/

    Apple is a comparatively good company, but I hope our political system doesn’t devolve into a battle between non-knuckledragging versus regressive business interests…

  5. Nemesis

    My stock broker told me not to invest in Apple when shares were at around $14. I haven’t taken advice from anyone since then.

  6. Guys,

    Why exactly is this topic so politicised? I thought we are talking economics here with its social and maybe political implications. My company has been in telecommunications for a while as we develop and market mobile VAS solutions to cellular operators, and Apple has provided many of us with aspiration and inspiration. Many of us do make a decision to be as green as possible. But we cannot ignore the fact the oil industry is a stronghold of the economy, and without it, many of us would be out of our jobs, unable to provide for our families.

    The world has decided that instead of travelling, many things can be done remotely, and Apply has been riding this surf. But as far as corporate behaviour is concerned, they do not seem to be any better than the rest of the lot. They are as agressive, as domineering as any other oversized company be it Exxon or Microsoft. And where there is money there is power, and there will be politicians who will want a share of it.

    But at the end of the day, it is not the corporation, nor the politicians who will teach kids how to save energy, how to recycle, how to live a greener life. It is mommy and daddy.

  7. Jon

    Lefty, the problem is that the oil companies operate with impunity, and frequently outside of the public interest. Meaning, they produce a product with huge externalities, but don’t pay for them, and have the political power to resist paying for them. They support campaigns to deny to the public that those externalities exist, and lobby and support political candidates to ensure they don’t need to pay them, or need to price their products to account for those externalities.

    It’s interesting to note that it’s now uncontroversial that tobacco companies were operating outside the public interest, but they made their case in their day: “Don’t like cigarettes? Don’t smoke them. Cigarettes are not addictive (even thought they knew they were).” Etcetera. Finally, it took action by the public to straighten things out. Putting restrictions on public advertising, cutting down on second hand smoke, etc… Just telling mommy and daddy not to let their children smoke was not enough.

    The parallels between tobacco and fossil fuels are not exact, of course not. We are dependent on fossil fuels. But that doesn’t change the fact that there are serious externalities. So we should craft policy so we move away from them, similar to how we did with tobacco, or aerosol cans.

    It’s not that hard to get. Of course it’s a longer process, but we gotta start somewhere. (Of course, if Apple had products with the same externalities I’d be saying the same about them. I’m sure they’re aggressive, etc., but being aggressive about selling iPods is a bit different than being aggressive about poisoning the planet.)

  8. As Andrew Winston said:

    “First, we’re not facing a choice between the growth of old economy jobs and the expansion of new energy jobs, but between decline and prosperity. One global economy, the clean one, is growing, and the global battle for the new jobs is on. Some countries – such as China, Germany, Spain, Portugal, and many others – are going after these jobs aggressively. The other part of the economy – the dead fuel economy – is not going to be a growth engine (with the important exception of natural gas, which may provide a useful, medium-term bridge to the future). Oil is basically at peak production globally, and coal plants are nearly impossible to build in the U.S. anymore. Even as the world demands more energy, and even as fossil fuel production continues, these companies will continue to get more efficient with labor. So don’t count on the fossil guys to create new wealth and jobs.”

    Though Apple certainly requires fossil fuel to create, manufacture and deliver their goods, they are erring on the side of trying to become cleaner and greener.

    I think it is also worth noting that people want to work for sustainable clean businesses. Consumers want to buy goods that are cleaner and greener. Those trends are clear. As business moves in the clean green direction, lobbying will shift, and the politicians will follow the money.

    For most businesses to sustain, a healthy business needs a healthy economy, which needs a healthy world.

    For more on some major companies that are leading the way, see:
    http://8020vision.com/2010/09/10/top-business-leaders-deliver-clean-energy-plan/

    Jay Kimball
    8020 Vision

  9. Yes, on the face of it, and I appreciate that face–but also, don’t forget how much 3rd world toxic garbage is produced by the built in obsolescence that results in tossed out electronics.

  10. ThomasL

    Jon,

    Anyone who thinks any of the computer companies care a whiff about “the public interest” hasn’t much knowledge of any of the history there. They are all controlling, greedy, high energy use (manufacturing & product usage), ego driven companies.
    Some are better at messaging otherwise however…

  11. Jon

    ThomasL–It’s not computer companies’ jobs to care about the public interest. As I said above, I’m sure they’re all ruthless in their own ways.

    However, it’s obviously in the public’s interest what companies are selling. Tobacco companies were and are selling a certain product, and it was and is killing people and putting a strain on the healthcare system. Oil companies are selling a product with a set of adverse externalities known as climate change. Computer companies are selling something else–in many cases part of the solution to our energy problems, and in general an important part of their brand is selling systems that promote knowledge. No one is saying they have pure hearts, just that in this case they’re selling something that coincides with the public interest, where tobacco and oil companies in important respects are not.

    OTOH, policymakers’ jobs *do* involve the public interest, and if I were those computer companies I would be hiring lobbyists to remind them of that, and also building their public brand as being interested in solving the problem.

    Signed,

    Captain Obvious.

  12. Nate

    With all due respect to Chris Mooney, who obviously is a very credible and well-respected guy, this is one of the most poorly written and ridiculous articles I have ever seen. The premise simply doesn’t follow from the headline and he gives no real tangible evidence to back up the “political” significance of Apple being worth nearly $300 bill. There is no political significance whatsoever. There is, however, a major difference between Exxon and Apple and that is that Apple does not produce any recurring income products or services that are “necessities,” while obviously Exxon does. He gives no real thoughtful analysis to the market value implications of the two companies. Instead he forces a headline on value into a political issue and attack on Republicans. Don’t get me started on comparing Texas and California. Where did that comparison come from? California is flush with oil companies. And what about Texas companies like Whole Foods? Is this guy writing articles like this just to get laid?

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About Chris Mooney

Chris is a science and political journalist and commentator and the author of three books, including the New York Times bestselling The Republican War on Science--dubbed "a landmark in contemporary political reporting" by Salon.com and a "well-researched, closely argued and amply referenced indictment of the right wing's assault on science and scientists" by Scientific American--Storm World, and Unscientific America: How Scientific Illiteracy Threatens Our Future, co-authored by Sheril Kirshenbaum. They also write "The Intersection" blog together for Discover blogs. For a longer bio and contact information, see here.

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