Wednesday 11 February 2015

The law of large numbers won't limit Apple’s growth

Some analysts have recently suggested that the law of large numbers limits the size of an organisation — in particular Apple.

While there are good reasons to believe that large organisations become restricted by various effects related to size, this is totally unrelated to the law of large numbers. “In probability theory, the law of large numbers is a theorem that describes the result of performing the same experiment a large number of times.”* An example is tossing a coin. 10 coin tosses is unlikely to give exactly 5 heads & 5 tails, but after a million, the ratio will be very close to half a million of each.

Yes, there is a mathematical law of large numbers, but it has nothing to do with growth of Apple, or any other large organisation.

http://www.bloomberg.com/news/articles/2015-02-11/tim-cook-doesn-t-believe-this-made-up-math-law-will-limit-apple-s-growth
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* Wikipedia: "Law of large numbers" https://en.wikipedia.org/wiki/Law_of_large_numbers / mathematical theory analysts concerns over Apple's growth potential interview Tim Cook debate mathematics Gary Cohn president Goldman Sachs Group numbers Cook's Apple chief executive officer Apple law of large numbers law of large numbers company has surpassed a market value of $700 billion math theory investors future prospects Apple giant companies financial growth begins slow mass of revenue because increasingly difficult new businesses growth move the needle Goldman Sachs Technology and Internet Conference in San Francisco old dogma Steve Jobs putting limits on your thinking is never good not focused on the numbers focus probability perform same experiment a large number of times predictable outcome flipping a coin heads tails half the time Yuri Lima postdoctoral fellow mathematics University of Maryland wouldn't apply corporate earnings results were truly random iPhone sales controllable factors manufacture decisions people buy buying stock-market observers Zach Shrier co-founder Los Angeles financial advisory firm Shrier Wealth Management Wall Street statistics Apple's earnings growth phone market smartphone sold last quarter larger-screen iPhone 6 /