In one sentence, Apple reminded everyone why it is the most valuable company on earth

On Thursday, Apple announced its latest quarterly results. Compared to the rest of the tech industry, the numbers have been pretty good. Apple’s profit fell 11 percent from the same period last year, but the company beat expectations and managed to post a record third-quarter revenue.

Given the challenges facing the entire economy, these numbers are pretty impressive. The tech industry has been particularly hard hit over the past few months due to things like shortages in computer processors, inflation and weak demand.

Apple is not immune to any of these problems, but it manages to overcome them much better than its peers. The reason is actually quite simple, but it’s not what you think.

You might think it has to do with the success of their products. Apple is known for making great products that have become part of pop culture. The iPhone is a great example. The Mac is also back with all-new designs for the company’s most popular Apple Silicon-powered laptops and desktops.

But it wasn’t the great products that made Apple the most valuable company on earth. In fact, it’s much more boring than that.

“Our June quarter results continued to demonstrate our ability to run our business effectively despite the challenging operating environment,” Luca Maestri, Apple’s chief financial officer, said on the company’s third-quarter earnings call.

First of all, from a CFO’s point of view, it’s a brutal takedown of every other tech company as you’ve ever heard of it. Essentially, Maestri says “we face the same challenges as everyone else, we’re better at running our business.”

To be fair, he has a point, and this one sentence sums it up perfectly. Apple’s strongest asset – the thing that makes it so valuable – isn’t its products alone. It is Apple’s ability to manage its operations.

Logical. Apple can design the greatest products in the world, but if you can’t get the right parts, turn them into iPhones, sell them in stores, and ship them to customers, none of that really matters.

But it turns out that Apple he is Really good at those things. Even in a quarter where many of these pieces were challenging — such as getting enough components to meet customer demand, Apple performed better than its competitors.

According to CEO Tim Cook, Macs and iPads were “so limited by supply that we didn’t have enough product to test demand.” There were more people willing to buy these products than Apple could possibly make. If you’ve tried to order a new MacBook Air or iPad in the past few months, there’s a chance you might still be waiting.

However, Apple still posted its best third quarter ever. It turns out that Apple not only designs some of the most iconic products in the world, but it’s also better at running its business than almost any other company.

This is not surprising. Tim Cook has always been considered an operations expert, not a product man. It doesn’t mean that Apple doesn’t have a lot of really talented people who design really great products, but it does mean that the man at the top spends his time making sure he can actually build these products and deliver them as profitably as possible.

The bottom line is that even though the economic outlook is getting tougher, Apple continues to focus on its strength – running the business – and it works. To put it in perspective, Apple today is more valuable than Microsoft and Meta (Facebook) combined. With a market capitalization of over $2.6 trillion, it’s also more valuable than Amazon and Tesla combined.

Having great products makes the company interesting. The ability to make and deliver them is what makes Apple the most valuable company on earth.

This is not only true for the largest company in the world, by the way. This is true for every business – even small ones. It’s not just about having great ideas. Success is managing your business in a way that enables you to present those ideas.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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