Just Apple's First Weekend iPhone Sales Alone Would Put iPhone Inc Into The S&P 500

Businessweek has a fun little look at quite how large Apple is. We've heard about the 9 million iPhones sold in the first three days, we know the company's extremely large and profitable but it's very hard for us humans to get a grip on the relative size of things when they're outside our comfort zones for numbers. We all grasp the difference between one and three of something, have a pretty good understanding that 100 of the other is very much larger than five. But once we start moving into the hundreds of thousands up to billions sort of numbers then it all becomes something of a blur of zeros. So it's useful at times to try and find a signifier of relative size of these large numbers. Which is just what Businessweek does:

Listen Up Apple-Haters: IPhone Sales Eclipse Microsoft and Amazon Revenue

And they're entirely right of course, as people reading this blog 18 months ago would have known. When I pointed out that Apple's iPhone business is now larger than all of Microsoft.

This won’t be a surprise to anyone who has been following the numbers but Apple‘s iPhone business alone is now larger than all of Microsoft. I’ll confess that while I was aware of the numbers I obviously wasn’t paying attention as this point hadn’t occurred to me.

Oh well, good stories never go out of date, do they? But seeing the point being made again made me think a little more about such comparisons.

We know from Apple itself that they sold over 9 million of the new iPhones in the first three days. We don't know the split between iPhone 5s and iPhone 5c, so I'm just going to assume, for ease of calculation, that they were all the iPhone 5s. The prices aren't all that different anyway. That phone sells for $649 without a contract (and Apple will be getting that price from the airtime providers anyway, even if the consumer buys it with a contract) and that means that gross revenue over those three days would be $5.8 billion or so. Margins on this are expected to be around 40%, giving a gross profit take of $2.3 billion.

This is where the true size of Apple becomes visible. This is, recall, just the first three days sales as they release a couple of new products, it's one long weekend in the year. But those sorts of sales would be enough, all on their very lonesome, to get a mythical "iPhone Inc." into the S&P 500. Certainly it would be a large enough firm to be there as there are companies with smaller annual sales and profits that are in that index. It's true that the S&P 500 doesn't quite work that way: you need to be a strategic company in the sector and so on but Three Day Apple and or the mythical iPhone Inc would meet those other standards too.

This also applies to other indexes too. Just those three days of sales would be enough to push an independent company into the Fortune 500 (the bottom end of which has companies on around $5 billion in annual sales), or into Forbes' own Global 2000 listing.

I don't know if it helps you but it certainly helps me get a grip on the size of Apple. Just three days sales makes it already one of the largest corporations in the world.

Also on Forbes: