The 38-fold surge in Apple shares that drove the iPhone seller past Microsoft market value means the company may be too big to succeed, according to research from Rob Arnott. Research Affiliates LLC found that since 1953,shares of the biggest Standard & Poors 500 Index company in an industry trailed the average stock by 2.4% a year in the next decade. The chart shows the market value of Apple,whose stock rallied to $270.17 on Wednesday from $7.17 at the end of 2002,passed Redmond,Washington-based Microsofts in May following the introduction of the iPad tablet computer. Apple,based in Cupertino,California,has increased net income seven straight years,following the release of the iPod music player in 2001 and the iPhone in 2007. The iPad came out in April,and Apple is forecast to report record profit of $12.4 billion in the fiscal year ending in September,according to the average of 28 analyst estimates in a survey. For investors,top dog status is dismayingly unattractive, wrote Arnott,founder of Newport Beach,California-based Research Affiliates,which oversees about $50 billion. When youre No. 1,you have a bright target painted on your back. Competitors are gunning for you. Politicians and pundits are gunning for you. Far from a problem of too big to fail,companies can become too big to succeed. Apples shares were worth $245.8 billion as of yesterdays close,compared with $227.4 billion for Microsoft. Apple trails only Exxon Mobil,which at $296.6 billion is the biggest US company.
