Selloff Silver Lining: Apple Briefly Surpasses ExxonMobil in Market Capitalization

By Chris Mooney | August 9, 2011 7:37 pm

It happened far sooner than I could have imagined–although it didn’t last very long.

But at one point during the trading day today, Apple (AAPL) briefly surpassed ExxonMobil (XOM) as the world’s most valuable private company, before falling back into second place at the market close.

This happened, of course, because the crazed market crash of the past few weeks took a huge bite out of oil stocks–and not as big a bite out of the old Apple.

I’ve already described what a landmark this is, so let me just quote myself from October of last year:

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 outGoogle’s green initiatives. Or take the example of Apple CEO Steve Jobs’ wife Lauren Powell Jobs, abig 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.

CATEGORIZED UNDER: Economy

Comments (14)

  1. Good post, Chris. I hope you’re right.

  2. 1985

    It is quite naive to think that the IT business is much cleaner than traditional extraction business. There are so many different material inputs and so much energy that go into building computers, other electronic gadgets and the infrastructure of the Internet, plus running all of the above. Just because all of that is not seen by people who look at their shiny screens and think how cool and green they are without realizing what is necessary to make their gadget work, does not mean it does not happen

  3. ThomasL

    It’s cool 1985,

    They let Asia do all the building and putting together of everything they sell…

    Really Chris, do you know anything about what’s been uncovered about Apples idea of manufacturing and how those who put this stuff together live, not to mention all the polution that surrounds semi conductor manufacturing (oh, and they need OIL to make all those boards…)?

  4. Somite

    Electronics are nowhere near as polluting as actually burning oil. Also, no iPhone spill any time soon. Can you find a reference for the relative pollution of oil Vs electronics?

  5. bad Jim

    Circuit boards are typically fiberglass and epoxy with one or more copper layers. There are some nasty chemicals involved in fabricating IC’s, but the volume is fairly low, as the parts themselves are fairly small. It’s true that most IC packages are plastic, but compared to the quantities of plastic produced for single-use applications it’s practically negligible.

    That’s not to say that the problem of e-waste is negligible. Computers and phones have fairly short lives for such expensive products and they’re very difficult to recycle, although they may be getting better now that it’s become a design consideration.

    Adoption of high technology has increased both productivity and energy efficiency. There’s plenty of room for improvement, but from an environmental perspective it’s done more good than harm so far and promises greater good in the future.

  6. Chris Mooney

    Still, you gotta love the “Apple pollutes as much as ExxonMobil” argument…..

    If these guys were a movie they would be “Say Anything”

  7. Cmdr. Awesome

    “Computers and phones have fairly short lives for such expensive products and they’re very difficult to recycle, although they may be getting better now that it’s become a design consideration.”

    Let’s not forget that “recycling” can also be re-use in the computing world. The amount of product that simply ages into obsolescence for businesses and enthusiasts dwarfs the amount of product that breaks and needs to be thrown away or recycled. Most of these obsolete products are still very viable for people who don’t need to do large quantities of real processing (which is the overwhelming majority of the world.) Let’s face it – my mom does not need a quad core i7 to check her e-mail.

    There are a proliferation of computing re-use programs coming into play; my country’s government makes use of a Computers for Schools program that takes old computers that have been retired due to age and provides them for free to schools across the country.

    So while there is a ton of recyclable waste, careful management and re-use programs can provide an excellent alternative to the dump for most of it.

  8. Incredulous

    #4 Somite

    “Can you find a reference for the relative pollution of oil Vs electronics?”

    Actually that is an interesting question. Especially if you make the comparison by volume. While both are getting better, neither one has had a stellar record.

    Lets also throw in the human factor and look at wages, safety, working conditions, and child labor.

  9. 1985

    6. Chris Mooney Says:
    August 10th, 2011 at 8:03 am
    Still, you gotta love the “Apple pollutes as much as ExxonMobil” argument…..
    If these guys were a movie they would be “Say Anything”

    Who exactly has made this argument here?

    What I said is that the IT business is unsustainable, just as the extraction business are. Being sustainable is not at all the same as not polluting. You seem to only care about pollution, which is not my fault, but rather your problem because you’re missing the point completely.

    The fact is that high tech industries rely on non-renewable resources, are themselves quite energy-intensive when you account for all inputs that go into the final product, have adopted planned obsolescence more universally than any other sector, while their products are not particularly recycling-friendly; and finally, all the Internet infrastructure uses an awful lot of energy. That’s not sustainable

  10. Mike H

    Another hurrah for regulatory capture and crony capitalism … just so long as its done by people with Mooney politics. Fact is, we can live without ipods. We cannot live without petrochemicals. And as a former employee of Exxon/Mobil I could guarantee you that the average pay for an EM employee and all their subs is an order of magnitude more than Apple and its subs. Has paying people $.20/hr always been recognized as progressive canonical doctrine?

  11. James

    Selloff Silver Lining: Apple Briefly Surpasses ExxonMobil in Market Capitalization

    If you are invested in Apple, which fools often are.

    Apple is a consumer stock, people buy it because they understand the products, and are mesmerized by their culture. Apple is a feel good stock to own, like AOL and Pets.com and all the other dot-com-busts were before them.

    Exxon is a portfolio stock, people buy it because they are educated financial managers, and unlike others, they are buying for financial reasons. Exxon isn’t a stock you brag about, because you own it for the profits.

    At the end of the day, you have to ask yourself, what does the world need more, iPods or Gas?

    The fact is Apple is disposable. It could cease to exist, with all its products and services, and people would get by just fine. Cell phones work for iPods, PC’s for Macs. Apple is just one bad product away from failure. Look at all the fallen tech giants of the past like HP, Compaq, Dell and others who seemed to own the market, but only for a moment before fading.

    ExxonMobile is vital to the world economy, including the US Army. Nobody is going to come and drop another oil platform on an Exxon field. The world’s need for gasoline isn’t going away any time soon. The oil market has huge barriers to entry, the consumer electronics market does not.

    To consider this some kind of “win” for Climate Hawks is absurd. Does Apple use windmill power in its sweatshop factories in China with all the suicides? Do people charge their iPods at home on bio-mass power? Does Apple buy carbon credits to offset the massive electricity usage needed to create its lithium hungry components? Of course it does none of these things.

    If carbon is crack, Exxon is the dealer and Apple is the junkie. There are no saints here.

  12. Somite

    “The fact is Apple is disposable. It could cease to exist, with all its products and services, and people would get by just fine.”

    Speak for yourself!

    Actually just as likely the world will come to its senses and realize we can’t continue to pump greenhouse gases to the atmosphere. At this point what do you think will happen tone Exxon stock?

  13. Somite

    Coincidentally, the market cap of AAPL closed higher than Exxon: 339.74 Vs 334.03.

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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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