Technology firm Apple, a company that sells smartphones, tablet computers and laptops, is joining the Dow 30 this month. It will replace AT&T which is the original carrier of the iPhone, the product that made Apple a profitable company.
- Apple joining DJIA, AT&T leaving.
- Verizon Wireless will become the only wireless carrier inside DJIA.
- The announcement was made ahead of the scheduled launch of a new Apple Pay product, the Apple Watch.
It started as a rumor, and now, the Dow Jones Industrial Average is finally adding Apple Inc. as one of its 30.
Apple Inc., one of the largest and influential technology companies in the world, is replacing AT&T. The changes will be made after the close of the DJIA on the 18th of this month.
So, are we in a smartphone bubble? What is with Apple Inc. that Dow Jones is finally embracing it?
According to David M. Blitzer, S&P Dow Jones Chairman and Managing Director, the firm's stock split a year ago allowed the transition. He told Fox News, "because of the price (of Apple) is so high, and got so high in the last few years, it was something that would have been distorted the index."
"I'm going back to the main point, you know, it is an iconic company. It is the largest company. It is symbolically very significant."
Dow's decision to pick Apple over AT&T is also an indication that the market is changing. It is like replacing an old phone with a new one, or buying a new television, and dumping the old, clunky one. After the changes, Verizon Wireless will become the only wireless carrier inside the 30-company DJIA.
"Apple is the dominant company right now," Blitzer explains, "there is something appropriate about it being in the DJIA."
The timing of DJIA's announcement is also very interesting, and it is because of Apple Watch.
The Cupertino, California-based tech firm is scheduled to announce the official release date of the Apple Watch on Monday. This product falls under the category of internet of things or IOT, a brand new consumer electronics industry that is currently gaining momentum.
In addition to timekeeping, serving users with notifications, health-focused services, and other applications, the Apple Watch can also replace credit and debit cards with the product's Apple Pay support. It is safe to say that one of the reasons why Apple is very attractive right now, at least from a business standpoint, is the success of the Apple Pay.
Other tech companies including search engine leader Google is also operating a similar service, and will launch a brand new one for Android smartphones later this year.
On the 19th, Apple will enter the Dow Jones in fifth position, just below Boeing, IBM, 3M, and the Goldman Sachs. The latter is currently on top of the list. Ξ
Further reading: You can now compare auto insurance online with Google.
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