With 1 sentence, Apple reminded everyone why it's the most valuable company in the world

On Thursday, Apple announced its latest quarterly results. Compared to the rest of the tech industry, the numbers were pretty good. Apple's earnings were down 11% from the same period last year, but the company beat estimates and still managed to set a third-quarter revenue record.

Given the challenges facing the economy as a whole, these numbers are quite remarkable. The technology industry has been particularly affected in recent months due to, for example, a shortage of computer processors, inflation and weakening demand.

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

You might think it has to do with the success of its products. Apple is known for making cool products that are part of pop culture. The iPhone is a prime example. The Mac has also made a comeback with new designs for the company's most popular laptops and desktops, powered by Apple Silicon.

But cool products aren't what made Apple the most valuable company in the world. In reality, it's something much more boring.

"Our June quarter results continued to demonstrate our ability to effectively manage our business despite a challenging operating environment," said Luca Maestri, Apple's chief financial officer, on the third quarter earnings conference call. .

First of all, in CFO terms, this is such a brutal takedown of every other tech company you're ever going to hear. Basically, Maestri says "we face the same challenges as everyone else, we're just better at running our business."

To be fair, he's right, and that sentence sums it up perfectly. Apple's strongest asset - what makes it so valuable - isn't just its products. It's Apple's ability to manage its operations.

It makes sense. Apple can design the best products in the world, but if it 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 is really good at these things. Even in a quarter where many of these parts were challenging, like getting enough components to meet customer demand, Apple outperformed its competitors.

According to CEO Tim Cook, the Mac and iPad were "so limited in supply that we didn't have enough products to test demand." There were more people who wanted to buy these products than Apple could make. If you've been trying to order a new MacBook Air or iPad in the past few months, you may still be waiting.

And yet, Apple still posted its best third quarter in its history. It turns out that Apple doesn't just design some of the world's most iconic products, it's also better at running its business than almost any other company.

Not surprisingly. Tim Cook has long been considered an operations guru, not a product. That doesn't mean that Apple doesn't have a lot of really talented people designing really great products, but it does mean that the guy at the top spends his time making sure that he can actually build and deliver those products from the most cost-effective way possible.

The end result is that even as the economic outlook gets tougher, Apple continues to focus on its strength - running the business - and it's working. To put it into perspective, Apple is worth more today than Microsoft and Meta (Facebook) combined. With a market cap of over $2.6 trillion, it's also more...