'Apple's now as big as ALL of America's GDP!' Oh do shut UP, you fools

So how much is a Waltzing Matilda worth?

From Australia we've yet another comparison: Could Apple soon be bigger than Australia? The tech giant's latest financial results show its market capitalisation – the value of all of its stocks – is worth roughly $980bn. By comparison, Australia's economy is worth $1.58tn, by gross domestic product.

Could Apple soon be bigger than Australia?

Superficially yes, but the figures can be misleading

Err, no. The share price is the net present value of all future income. GDP is the value of the current year's value added. Maybe it's the standing on their heads all day that causes this.

We really just don't compare flows to stocks in this manner. That's like comparing this month's wage packet with total lifetime income. There's a connection but not a terribly enlightening one.

Instead we could use something from Willem Buiter, who a few years back said that the contribution of The City (by which he meant the wholesale financial markets, not the domestic banks nor the legal, accounting etc. support network) was about £60bn, or four per cent of the UK's GDP. Not the same but close enough to our $60bn-$70bn stylee Apple measure of GDP.

We've also had El Reg's valiant attempt to predict when the iPhone Event Horizon will arrive. Which is ever so slightly marred by failing to account for imports.

An import, in the GDP figures, is a reduction in GDP. So, the contribution to US GDP made by Apple is not turnover, it's turnover minus imports. Or, as it happens, the same as Apple's profits plus wage bill, as it doesn't manufacture (well, nearly not) anything in the US.

Just as a boring technical note, all of Apple's profits, globally, are part of US GNP as correctly recorded. As the US incorrectly does it, they're also part of US GDP.

Wages belong to whichever country they're paid in but let's not try going to that level of detail. This brings us right back to that $60bn/$70bn sort of range as Apple's contribution to US GDP.

In the context of US GDP of some $17tn, it's... erm, well, it contributes 0.35 per cent or so. That's it.

The event horizon – where there's nothing left but Jobsian competition for blingphones and wristjobs – is still some way off. ®