If Apple (AAPL -0.54%) investors were hoping for a rebound today after yesterday's 12% post-earnings sell-off, little relief came today. In fact, Apple shares have shed another $10.62 today, or 2.36%. 

Perhaps more interesting is that Apple's drop, for the time being, has pushed its market capitalization back below ExxonMobil (XOM -0.23%), making it the U.S.' second-largest company. Exxon is currently worth $418 billion, while Apple sits slightly below at $413 billion.

Apple first passed ExxonMobil's value in August 2011, though its passing of the energy giant was brief. While Apple gave back the title of largest company to Exxon during the remainder of 2011, on Jan. 25, 2012, it once again passed Exxon. As Apple's shares rallied for the first nine months of 2012, it cemented its lead as the United States' (and the world's) largest publicly traded company. 

The battle over big: Exxon vs. Apple


Source: S&P CapitalIQ. Market values for each company are quarterly.

In August, Apple's rally led it to attain the largest market cap in the history of American markets. At its peak, Apple was worth about $660 billion. 

Let's get real

Apple's loss over the past few months has been especially fascinating in part because of the sheer size and speed of its shares decline. Apple has lost about $249 billion in market value since its peak. To put that in perspective, its value loss in that time is greater than Microsoft and Google's entire market caps today! Below is a comparison of the value Apple's lost since its peak relative to some of the market's largest tech companies. 

Source: S&P CapitalIQ

That's a fantastically large reduction in Apple's value. However, comparing the market caps of companies like Exxon and Apple comes with a laundry list of caveats long enough to take up a whole column of its own. When Apple became the largest American company in history, fellow Fool Alex Planes did just that. 

Among the key areas that make market capitalization comparisons silly is they don't incorporate total returns. That is, while Exxon is worth $416 billion today, its been returning cash to shareholders since 1882, when it was a part of Standard Oil. Exxon has also increased its dividend for 30 straight years!

The implication here being, when a company pays out a dividend, that actually decreases its market cap as that capital is sent to its shareholders. Exxon has paid out over $75 billion to shareholders in the past decade and repurchased $190 billion of its own stock. Today it has $13 billion in cash. Without returning that capital across the past decade, the company would have $278 billion in cash sitting around. Such a figure would make Apple's much-discussed $137 billion cash hoard look puny in comparison. 

The big implications
Apple's just beginning to use its cash, with its pledge to return $45 billion to shareholders. As the company continues accumulating cash -- it had $23 billion in operating cash flow last quarter! -- it'll likely increase those actions. 

This is all to say, ranking market caps is more a beauty contest than anything useful to investors. The fact Apple had passed ExxonMobil was interesting because it showed how transformative mobile was as an idea. As the company generating the majority of mobile profits, Apple had passed ExxonMobil, the corporate titan of our time. 

That narrative was interesting. The second act of this narrative is whether Apple can continue holding such a large market cap as it's besieged by low-cost Android devices. Historically  we've seen other hardware companies -- whether in mainframes, mini-computers, or PCs -- fall as competition reduced their profits. Last quarter, Apple saw its gross margin contract from 44.7% the year before to 38.6% now. 

Yet, the counterpoint is that Apple's as much a software company as a hardware company. With iPad Minis selling at $330, Apple's pricing strategy isn't too different from Microsoft's. It's essentially collecting the profits from the operating system, but choosing to control all the hardware itself. Each new technology wave is different, and the second act of Apple's battle to be the defining company of the mobile revolution is yet to be written.