“The one thing about this crisis we’ve learned is while it might create short term damage for these companies, it actually makes their competitive position stronger,” says Damodaran.
“Amazon has already been killing brick and mortar retail. Now, that coffin has been nailed shut. So one of the things that these companies have going for them is the longer this crisis continues, the more that competition is being hobnobbed and handicapped, which actually makes the long term stories even better as an investor. Samsung is much more damaged by this crisis than Apple is simply because it’s much more capital intensive and has much more debt.
“They’re already incredibly strong companies, but the strong becomes strong and that’s basically what this crisis is.”
Apple optimism
Apple’s road to a $2 trillion valuation has not been entirely down to financial quirks, however. The company is gearing up for the release of a new iPhone that analysts say could be its biggest launch yet.
While Apple has said the next iPhone will be delayed by several weeks, that has done little to dampen enthusiasm among investors. It is likely to be the first device that supports 5G mobile networks, an upgrade with questionable immediate benefits, but which will at least be a selling point in a smartphone market that has been short on innovation.
Analysts believe this could convince consumers that have been reluctant to upgrade to finally do so. “The death of the iPhone has been greatly exaggerated,” says Dan Ives of Wedbush Securities. “There’s an opportunity to upgrade 350m of 950m worldwide iPhones. It’s really the opportunity of a decade that Apple now has in front of it.”