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Apple BIGGER than the U.S. ECONOMY? Or Australia? Or ... Luxembourg?

iThing event horizon actually not that close

So a Genius is only half as good as a Luxem-bourgeois?

Luxembourg, last census, apparently had 400,000 people. About half of whom are not economically active (pensioners, children, stay at home housewives, actually, that percentage might be higher given the place's skewed age distribution) so call it 200k people working.

Apple's got a bit under 100,000 people working in the company (all those at Foxconn etc are not part of Apple's value add).

OK, so the value add per worker at Apple is double or so that in a rich country like Luxembourg. But we're still within hailing distance of each other with these two numbers. The value add of 100k rich world workers is going to be closeish to the value add of another 100k rich world workers. Because their being rich world workers defines them as being so.

From Australia we've yet another comparison:

Could Apple soon be bigger than Australia?

The tech giant's latest financial results show its market capitalisation – the value of all of its stocks – is worth roughly $980 billion. By comparison, the size of Australia's economy is worth $1.58 trillion, by gross domestic product.

Err, no. The share price is the net present value of all future income. GDP is the value of the current year's value added. Maybe it's the standing on their heads all day that causes this. For we really just don't compare flows to stocks in this manner. That's like comparing this month's wage packet with total lifetime income. There's a connection but not a terribly enlightening one.

Or we could use something from Willem Buiter, who a few years back said that the contribution of The City (by which he meant the wholesale financial markets, not the domestic banks nor the legal, accounting etc support network) was about £60 billion, or 4 per cent of the UK's GDP. Not the same but close enough to our $60/70 billion stylee Apple measure of GDP.

Steve Jobs memorial in Russia

In the grim post-iPhone/Pad/Watch Event Horizon world, this man is plainly on his way to work in an Apple Store, the only kind of business that it is economically feasible to run

We've also had El Reg's valiant attempt to predict when the iPhone Event Horizon will arrive.

Which is ever so slightly marred by failing to account for imports. An import, in the GDP figures, is a reduction in GDP. So, the contribution to US GDP made by Apple is not turnover, it's turnover minus imports. Or, as it happens, the same as Apple's profits plus wage bill, as it doesn't manufacture much in the US. And just as a boring technical note, all of Apple's profits, globally, are part of US GNP as correctly recorded and as the US incorrectly does it they're also part of US GDP. Wages belong to whichever country they're paid in but let's not try going to that level of detail.

Which brings us right back to that $60/70 billion sort of range as Apple's contribution to US GDP.

Which really is, for one company, truly a “Whoa, Fuck!” number. But in the context of US GDP of some $17 trillion it's, umm, well, it's 0.35 per cent or so. That event horizon where there's nothing left but Jobbesian* competition for blingphones and wristjobs is still some way off. ®

[*This is of course different to Jobsian. Perhaps we might speak of the post-iPhone Event Horizon society as having fallen into a Jobbesian trap. -Ed]

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