STEVE JOBS may be dead but his corporate creation goes from strength to strength. Apple's shares have risen by nearly 50% this year, making the company the most highly valued on the American stockmarket, at more than $550 billion. This week investors waited agog to find out how much of its near $100 billion cash pile it would return to shareholders (see article). As a titan of the equity market, Apple is unusual. For much of the past 20 years, three companies have alternated in the role of the largest, by value, on the American stockmarket: Exxon Mobil, General Electric and Microsoft. The first two are very big companies by Apple standards. Exxon Mobil has annual revenues of $486 billion and GE employs 301,000 people; Apple had annual revenues of $108 billion in its last fiscal year and its workforce numbered just 60,000. But Apple offers the kind of growth prospects that the shareholders of Exxon Mobil and GE can only dream of. Its sales in the latest quarter were almost double those of the previous year, and forecasts for 2013 revenues are nearly treble those recorded in 2010. It is the epitome of the modern company: short on physical capital but long on brainpower. Exxon Mobil's spell at the top of the rankings illustrated the importance of energy resources at a time when rising demand from Asia caused the oil price to rise more than fivefold over the past decade. GE's reign illustrated the close links between modern industry and finance: GE Capital contributes almost half of the conglomerate's profits. Microsoft ruled the age of desktop computing.

So what does Apple's dominance reveal about the economy and the stockmarket? First, it is a powerful reminder, at a time when the Chinese model of state capitalism is gaining adherents, that the free market can still be remarkably innovative. In the past 11 years Apple has launched three products—the iPod, iPhone and iPad—that have created brand new markets, fulfilling desires that consumers did not even know they had. It is impossible to imagine any of those designs being dreamed up by a Beijing bureaucrat.

Second, it shows that the internet has come of age. The dotcom bubble of the late 1990s featured companies that were heavy on ideas but light on revenues or profits. When the bubble burst a decade ago, it was feared that the internet would savage margins by “commoditising” devices like phones and personal computers. Apple has so far proved that it is possible to earn high margins with brilliant design and by offering consumers ways to access the internet effortlessly wherever they go. It has made the mobile era its own.

Third, Apple's rise shows that, even in a period of austerity, consumers are willing to pay for the must-have gadget. The company is a huge beneficiary of globalisation: able not only to source its products at low cost in Asia but to sell the finished goods there as well (there was a near-riot in Beijing when customers could not buy the latest iPhone). A global elite is now willing to pay for the most desirable products, from luxury luggage to premium Scotch. And America's soft power is still so strong that it can create aspirational brands for that elite.

Bubblehood and Apple high

But does Apple's surge to pre-eminence, along with the imminent flotation of Facebook, a social-networking giant, indicate that the stockmarket is back to the insane days of the late 1990s? There are certainly warning signs. Brokers are competing to come up with the highest potential price target for Apple's shares, and the announcement of a share buy-back should remind investors that companies have a tendency to purchase their own equity at market peaks. But when Cisco, a technology giant, was briefly worth more than $500 billion in 2000, its price-earnings ratio was above 100; Apple trades on only 22 times its 2011 profits. Its new dividend yield will be almost as generous as that of the overall market. Even if its shares turn out to be overvalued, this would be more like a pimple than a bubble.