News hardware The GAFAM have an indisputable king: this company crushes Google, Amazon and Facebook combined
Now, we learn the acronym GAFAM at school. Google, Apple, Facebook, Amazon, Microsoft: the 5 companies that reign over tech and the web punctuate the daily life of billions of people. Today, a significant event has occurred: one of these digital giants crushes all the others in terms of its market capitalization.
Let’s start with a little reminder. The name “GAFAM” has been known for a good ten years, but it is actually a little bit outdated. For 3 reasons:
- New companies can be added to the list, we are obviously thinking of You’re here in the first place.
- Facebook is now called Metacan we then talk about GAMAM?
- Between these 5 giants, there are now huge power deviations. This is what this article is about.
Back to the title. When we talk about the “king” of GAFAM, we can expect industry giants pulling the strings in the shadows of the general public. Truth be told, this angle is possible, such companies do exist.
We can, for example, mention the Taiwanese giant TSMC, which produces the chips for most of the high-tech objects you use every day. TSMC’s pricing, inventory, and technical advancements set the tone for nearly the entire industry.
We could talk about this for a long time, but that is not the subject of this article. No, the company that crushes everything is not a shadow player, quite the contrary. Enough suspense, the “king” of GAFAM is quite simply Apple.
Today, the market capitalization of the Cupertino company exceeds that of Google, Amazon and Meta…combined.
At the close on Wednesday, November 2, 2022, Apple’s market capitalization was $2.307 billion . To better visualize this absurd number, tell yourself that it is the equivalent of Canada’s GDP, higher than that of Brazil or Russia and just below that of France.
If we add the market capitalizations of the 3 other giants mentioned earlier, Google, Amazon and Meta, we arrive at 2,306 billion dollars. There you go.
The year 2022 is very special. The crazy post health crisis growth that characterized the year 2021 is behind us. Against a backdrop of geopolitical tensions, the year 2022 is above all marked by high inflation and a desire to save money, on the part of households and businesses alike.
Faced with this situation at the start of the crisis, Apple is a much safer bet than the other members of GAFAM. Compared to the 2021 peak, Apple has lost “only” 18% of its value. For comparison, Google lost 38%, more than double Apple. Tesla rises to 41.8% loss, Amazon to 44.5% and Meta, big loser, is at 77% loss.
Many reasons explains Apple’s resistance to the difficult year that is 2022. Some are quite technical, but we can name the 4 most obvious:
- Apple doesn’t care about the drastic drop in advertising revenue (which strongly impacts companies like Meta or Facebook) since they mainly sell iPhones.
- Apple no longer has the control than its competitors on its margins.
- Apple anchors itself in a kind of luxury economy thanks to its brand image: fans of the brand will spend no matter what, sales of high-end products are much less hampered by inflation than those of entry-level products.
- Apple has bet heavily on its models iPhone 14 Pro, and this strategy works. We learned very recently that the demand for these particularly expensive models even exceeds the supply.
Attention, this situation of extreme domination of Apple is not eternal. The world is in an unstable period, things can change quickly.