Apple’s $15 billion cash hoard
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Pop quiz: Which tech company has the most cash?
(A) IBM (IBM)
(B) Hewlett-Packard (HPQ)
(C) Intel (INTC)
(D) Google (GOOG)
(E) Apple (AAPL)
If you picked E, congratulations. Apple’s $15.4 billion stash is indeed the biggest of the group, putting the iPod maker in the elite ranks of well-heeled Fortune 500 tech companies. (Only Microsoft (MSFT) and Cisco Systems (CSCO) stockpile more.) And lately the stacks have been rising fast; Apple has added $5 billion to its coffers in the past year alone, according to regulatory filings.
Unlike Microsoft or Cisco though, Apple (AAPL) doesn’t pay a dividend, doesn’t make big acquisitions, and doesn’t buy back many shares. Last month the company reported that since 1999, it has spent a relatively paltry $217 million to repurchase stock, though its board has authorized $500 million for that purpose.
So what does CEO Steve Jobs have in mind for all those greenbacks?
Traditional money managers would say he has to spend them somehow. Sure, a growing mound of cash looks impressive on financial reports; and a growing cash reserve also can be a sign of above-board profitability, since it’s easier for companies to play games with income numbers than with cash flow. But if the money just sits there, it smacks of waste.
When asked about Apple’s plans for the cash, a spokeswoman referred to chief financial officer Peter Oppenheimer’s statements earlier this year. When a Lehman Brothers analyst asked him where the money would go, Oppenheimer didn’t offer specifics beyond saying that having a few billion on hand helps to fund big projects, and “we do discuss share buyback and other forms of returning cash to the shareholders with the board from time to time.”
Indeed, investors tend to discuss those things, too — they like to see that kind of money either used to place big bets that drive future earnings, or handed back to them through buybacks and dividends. Technology companies often resist such suggestions, but not always. Under pressure from investors, Microsoft began offering a dividend five years ago.
Of course, as a quick glance at a stock chart makes obvious, Apple is not Microsoft. While the Redmond software giant has performed well — shares are up a respectable 15 percent this year on the strength of Windows Vista sales — Apple’s stock price has doubled. Considering Apple’s standout performance, and a big year ahead as the iPhone and redesigned iPod push into new overseas markets, no one’s about to start lecturing Jobs on shareholder value.
Apple’s new iPod lineup: An analysis (Photos 1/5)
But that still doesn’t answer the question of where Apple’s going to put that $15 billion, not to mention the next couple billion dollars it will probably pocket during this holiday season alone. Though Apple isn’t talking about its spending plans, history offers some clues.
If the past is any guide, Jobs & Co. could very well use some of the money to swallow smaller companies. In 2001 Apple bought education software company PowerSchool; in 2002 it went on a binge and snapped up audio production company Emagic, video effects company Nothing Real, and FireWire developer Zayante. (Apple’s acquisition record is mixed; it sold off PowerSchool last year and its FireWire technology has taken a backseat to USB 2.0, but audio and video software efforts have flourished.) It’s conceivable that Apple could use cash to buy its way into a new niche, like social networking or online collaboration.
Or Apple could make some investments. During tough times, the money Apple had put in Akamai Technologies (AKAM) and ARM Holdings (ARMHY) provided the company with valuable infusions of cash when necessary. It’s a bit more difficult to find places to stash $15 billion, however.
Might the company really launch a large-scale buyback program, or begin offering dividends? For Apple, there’s limited advantage in doing that until investors force the issue. Once a company gets onto the dividend treadmill, it has to keep doing it or risk being seen as in decline. The same goes for stock buybacks. For example, in its heyday Dell (DELL) regularly bought back $1 billion or more worth of stock at a time. Though Michael Dell surely needs every cent these days to finance a turnaround, analysts are already asking about restarting the old buybacks as a sign of renewed health.
Blackberry: Evolution of an icon (Photos 1-10)
At Apple, there are some sizable projects ahead that could demand sizable chunks of cash. One of the few Apple endeavors that doesn’t get much press is the brand new campus the company plans to build down the road from its current Cupertino, Calif., headquarters, which should bring together teams of engineers that are now mostly scattered in offices around the area. Real estate experts last year suggested that Apple’s project costs could top $500 million, once it gets through tearing down old buildings at the future site. And, of course, it’s not clear whether their estimates factor in the possibility that Steve Jobs might decide to make a big architectural statement.
Finally, there’s always the chance that Jobs will surprise us all, break with tradition, and buy something big. Consider this: Just for kicks, with the money burning a hole in Apple’s pocket, he could easily buy TiVo (TIVO), Netflix (NFLX) and Circuit City (CC), and still have plenty left in the bank.
Lots of good comments here.
Just thinking outloud now, but what would happen if Apple bought Honda (HMC). Honda’s design and quality capability rival Apple. Honda is a world-wide leader in robots. Honda has strong finances, but faces challenges due to its focus on the U.S. market. Could the marriage result in new products from Honda that would be a catalyst for fast growth in South America, Asia, and the Middle East?
Steve Jobs, I assume you are listening. There are some good ideas here, and many not so good. But you have surprised everyone in the past and will do so in future. Take a week, go to Bar Harbor and consider this. Lots of other companies are doing their own thing, and many are failing. Your kind of thinking sould turn around some rust belt industry, make a jump of faith to new technology, solidify Apple with another industry leader in need of new blood, create the truly NEXT thing or not. Those who believe you are capable expect you to figure this out. Look at innovative companies or those who have been inovators. Sony, Cypress, Texas Instruments, AMD and add one or more to Apple. Look for those who can take you to new markets or re-define old ones. You did well with the iPhone, nearly well with the iTV and iPods will become commodities. What else can do that? What will make a difference in the world? Wind and solar energy need a friend, not existing energy companies. Make a difference!
The stock market is going down big time, so they should wait for the bottom, 6 months after nasdq turns down, buy there shares back “then” , that way they can double their money in a year’s time and use that for investment.
STEVE JOB.STEVE JOBS.STEVE JOBS! while u decide on what to do with the mega bucks, invest less than 1/10 tenth of the greens in Nigeria’s Private Power Generation Project and see if d profits won’t daze u! Just remember i gave u this idea. Cheers
A durable, lightweight, portable computer that recognizes handwriting and speech, has a touchscreen, with a footprint that is bigger than a PDA, yet smaller and thinner than today’s oversized laptops, using solid state drive technology and priced just under $1000 — that’s where Apple should be spending it’s fortune.. perhaps we’ll see such a product in the very near future.
Why does everybody want Apple to do something? Whether it’s “spend the cash” or “get a new CEO” or “buy Nintendo” (all of which I have seen) they all want Apple to try something new.
I say Apple should keep its focus straight ahead the way it is going. It is doing well- why fix something that isn’t broken? Apple should not give in to the market prognosticators who want them to take a new course.
Besides- a nice store of cash comes in handy when Apple has to deal with lawsuits.
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in the past, every time I’ve said on forums that Apple could sell a PC version of the OSX I’ve always received sarcastic critics… but… the CURRENT version of the OSX already IS able to run on PCs with just a few problems, then Apple is pretty close to a PERFECT version of the OSX for PCs… so, the Apple strategy could be:
1. sell a cheap OSX for PCs
2. quickly grow in the PC OS market
3. earn much more billion$$$
4. BUY MICROSOFT !!!!!!!!!!!
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Some of the smaller software companies they could pickup that would make sense:
SwSoft {Parallels} (www.swsoft)
Ambrosia Software (www.ambrosiasw.com)
IGG Software, LLC (www.iggsoftware.com)
Omni Group (www.omnigroup.com)
Barebones Software (www.barebones.com)
ConceptDraw (www.conceptdraw.com/en)
Panic Software (www.panic.com)
Late Night Software (www.latenightsw.com)
Ettore Software (www.ettoresoftware.com)
Zoiper Software (www.zoiper.com)
Realbasic (www.realbasic.com)
Also maybe pickign up a Corel (www.corel) might also make sense from a software standpoint.
There is a huge market in the small to medium size companies for a plug and go financial solution, MRP or a scaled down SAP Business one equivalent. Building PC networks with 3rd party financial packages databases and e-commerce strikes fear into many entrepreneurs. Buy Intuit and build a one stop financial solution. A niche that would be profitable and enable a cult following as Apple did with graphic designers but this time with accountants. Just an idea
make .mac free… they would instantly dominate the mac community and it would be another selling point.. i mean who uses email you have to pay for?
Apple should simply spend some cash on R&D to push the laptop forward to the ease of use and intuitiveness of the iphone. Then, use the cash reserves to sell it at a loss for about $100. People will drop their vistas like mad.
Apple should do nothing. There is no better feeling than being rich and having nothing to do. Remember, money gives you the freedom to do whatever you want, including doing absolutely nothing.
http://www.soundclick.com/bands/default.cfm?bandID=64492&content=music
Let them be bought by Google and/or merge to conquer MS and have
Steve Jobs start another company. Creative minds are always looking for
new areas to shine. Otherwise car and
gaming might also show synergies.
You heard it here first!
I like Apple,however it has come to a peak.The products have reached maturity and dumping cash into markets they know little about will bring the company down.(wireless,gamming,etc)Thats exactly why they have a surplus because they have no future direction established.
They’re working on a flying iCar. They’ll revolutionize transportation like they did personal computing. And expect them to get into the satellite and space-tourism industries.
Apple is on a roll, they will be looking ahead to an emerging technology that has not hit critical mass yet. Possible categories include: smart homes, solar power and humanoid robots. I am going to throw out this CRAZY idea - Apple buys General motors.
I read through every comment and enjoyed most of them. However, I didn’t see anyone suggest that some of that money be given back to the employees. I’m sure they would have a nice Christmas with a piece of that $13 billion.
Let’s just say you own the perfect technology (recently patented and until now never heard of), and you know it would fit Apple’s future path perfectly? How does one go about presenting such a technology without hiring an investment bank to do it? No one ever writes articles with such answers, and it’s about time someone did.
I’d love to see Apple do an automotive OS. Next time I hear a good tune on the radio, I want to be able to buy it then and there, and sync my car with my iPhone/Pod/etc. Pull a video down for the kids to watch on a long road trip, or maybe a book “on tape”. Map and remember open WiFi as I drive around and, like a cell-phone, jump from net to net as the car interacts with the internet. And text message me when my kid crashes the car.
With its Cash Apple should
1. Buy Echostar. They would be able to put an Apple TV in every dish users home.
2. Make solar energy the mainstream hobby that computers were in the late 70’s and early 80’s. Apple is an electrical engineering company.
3. Start making personal robots. If Apple starts now, my upgraded Z5 robot would be driving me around in seven years when I am 60.
Most normal shareholders would demand a dividend from so much cash on the company’s books. But Apple is not a normal company and AAPL shareholders are certainly not normal. I don’t want a dividend. I want Jobs & Co. to invest (either internally or externally) to drive future revenue growth.
i’d rather them have a 2 or 3:1 stock split than buy another company.
They should buy Sirius radio for the spectrum, and for the services it would give their ipod. WIFI goes everywhere.
Nice
1. I think Apple should use the money to buy in content providers and expand into content distribution (like Universal, Disney etc). It will grant some exclusivity for iTunes for some key songs and movies.
2. Expand with new Ideas into world of WEB 2.0. Creating some revolutionary new and easy way’s to allow people to contribute content. How about sales trought iTunes of home made movies, songs? It will turn power of social contirbution to became profitable for content owners… ![]()
3. To acquire access to mobile networks (mobile operators). If you want to be truly profitable you shoud controll all the way to customer - content, channel, transport (carrier), sofweare and the device (computer, phone etc).
Apple isn’t going to buy any other company- it doesn’t need to- it will use the money to continue to fund its extremely successful internal new product engine, and make a huge push into casual gaming. I believe Apple is going to launch a second iteration of Apple TV based on a different architecture that’s less costly, more power efficient, and more powerful than the current Intel-based Apple TV. Then it’s going to make a huge push into GAMES. To compete with the incumbents in the casual gaming market, it’s going to need serious investment, but I think their offering will be very innovative. I also suspect they might have to license some key patents that could cost them billions.
The cash belongs to the owners of the company. If Steve Jobs can’t find a good investment, then he should return it to them.
Apple should use its money to invest in its products with an eye toward the business market. Most IP folks don’t think Apple has the ability to support a large scale introduction of Macs into the business environment. I am one of the few who uses a Mac at my work and I am constantly trying to get the IP folks to push greater Mac use. But the the IP technicians need to make sure that the introduction of Mac equipment will be compatible with their existing infrastructure. If Apple made some investments in people, software and a few of the hardware tools that business people like (such as a docking station for its MacBook), then it will have the infrastructure needed to support a business strategy. Apple could then really begin to grow its market share.
with that kind of cash, apple can buy sony,will make a lot of sense, from the brand, retailing and international expansion..
Apple hates it’s customers and investors, Jobs wants it all for himself!
http://fakesteveballmer.blogspot.com
Buying large companies and integrating operations is a tortuous and risky process. Apple has a special company culture making it even trickier to pull off.
When they bought NeXT, and got Steve Jobs back at Apple, they went through some major strain and pain trying to get everyone on the same page and working together. They really needed the NeXT OS and they really needed Steve Jobs, so that merger was worth it, but it was painful.
I don’t see similarly compelling reasons to try another merger.
Partnering with Google on the 700Mhz spectrum is a fascinating idea.
They’ve done very well with Apple retail stores. They should put the pedal to the metal and pick up the pace on new store openings, especially international stores.
Two of their biggest success resulted from rethinking and reinventing established products (MP3 players and Cell Phones). They’re on a roll with their superior ability to innovate and design compelling products. They should take a look at other product categories where similar potential might exist. For example, a big screen LCD television set that is also a computer might be interesting.
Kindle (from Amazon.com) is the latest in electronic book readers. Apple could desgn a much better device and eBooks would be a natural addition to the iTunes store.
GPS is another category that might be worth a look
I notice that most of the specific suggestions being made here propose that Apple buy problem companies that are broken, or have lost their way even if they successfully solved yesterday’s problems (Adobe, Avid, CompUSA). There’s also the boosters for pouring vast amounts of capital into things like the 700Mhz spectrum that requires enormous infrastructure. Apple doesn’t rescue pound puppies and Apple’s great skill: making beautiful products that simplify human activities and are fun and useful, can’t be applied to an invisible radio spectrum. Consumers can’t see the spectrum or the infrastructure. So these suggestions are all not likely.
Here is a great idea….use most of the $15B to buy up stocks as an investment. Hire the best on Wall Street and start an investment company. This will diversify Apple and could make Apple a lot more than $15B.
I think Steve Jobs should buy CompUSA. They are closing all their stores and it is the only store in my area that sell anything for the Mac, which happens to be main computer. Now, I have no idea where to go to purchase software and other items for my Mac.
• Increase market share by paying a BIG DIVIDEND to us investors!
• Give accumulative reward points on all Apple purchases for future purchases and VIP support. i.e., iChat conciere
Apple has to buy Adobe. It is logical and affordable. Adobe is badly in need of a shake-up. Their products have become bloated, and their customer service is atrocious. Apple would then have a real opportunity to expand its reach within the enterprise and elsewhere. It could sell whatever Adobe products didn’t suit its plans going forward (thereby mitigating any regulatory/monopoly issues that may come from the takeover).
I am just wondering what Apple is waiting for…
How about sharing (at least some of it) with the least advantaged as Bill Gates and Warren Buffet both did?
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How often do you feel unwell?
It’s too often…
- Well I do not agree with Steve jobs as the most powerful biz leader. Though he has done a lot to bringing out new product lines, I do believe the title should go to some one who has a wider influence and not just to the tech arena. Someone who can change multiple business arenas with their goals and visions.
Tivo maybe if it was really cheap just to get the engineers and IP, to roll into Apple TV product line (but Jobs himself this is still a hobby biz for them, so they’re not committed yet, so I doubt it. BTW, ATV is a great little product–it’s not just video, it also brings music into the living room –digital music–better than any platform I’ve seen at a reasonable price).
Palm? That would be a bit nuts with the success of the iPhone. What can Palm possibly offer Apple? Certainly not hardware, and their software strategy is missing.
Nintendo, maybe. They certainly could use a game plan (pun intended).
RIM would be a good way to get a foothold into the business market, and they could leverage the Blackberry technology in the iPhone product line as well. With the world going mobile, this is a smarter move than anyone has pointed out. Combine Blackberry with iPhone ease (not that BBs are that difficult to use) and you will increase visibility in the corporate buying world.
Sun: Maybe, but not for the reasons I’ve seen stated here. Java is not exactly the most efficient language, though it is open–I’ll give it that. Apple has practically abandoned Java though. Have you ever seen a java ap? Usually crap, for some reason no one can build elegant java aps. I’m not sure java has a long life ahead of it, but remains to be seen. Sun would give Apple a very high end server entry, with good hardware and Solaris, but Sun is getting eaten alive by low cost alternatives and Linux. Apple might be able to revive that and fork off an enterprise version of OS X (or OS XI) to eventually replace it. But Sun does not have a corporate presence beyond the server and IT rooms. Not really Apple’s gig.
If I were Apple (or Steve Jobs) and I was looking for ways to spend some of that $15B I would diversify even more through some modest acquisitions (Adobe seems extreme, though they are a better fit than most), PLUS I would invest in talent, both on the software side and the hardware side, and then I would do as some others have suggested and really go after the Windows sw market with iLife, iWork, and keep making them better and better and win those business customers. Then, I would develop or partner in the online sw business as well, because someday a lot of these aps may live in the cloud, and Apple could take a lead there by building their same ease of use on the network applications as they have done on the desktop applications. Then, they might have a chance in the long run to eclipse MS.
Wow, what a rant. There’s more where that came from, but I’m done now.
I think, Apple needs to hold on to this cash, badly. Microsoft has never been a great innovator, but has been extremely effective if somebody challenged their supremacy. Remember how they squashed Sun a few years ago? Microsoft can still squash Apple Inc. if ever they should decide so. Selling the Zune at 49$ would cost Microsoft about 6% of it’s free cash flow and could effectively devastate half of Apples revenues. Apple’s computer business could be, and can be shattered just as effectively, by not renewing the Office deal or investing in the development of specialized OSX Viruses. What keeps Microsoft from eliminating a company that gradually erodes it’s marked share? Obliterating Apple would cost Microsoft at least 15 billion dollars and that’s something you have to explain to your shareholders first.
As humor as it is to read, do you guys honestly believe Apple could even afford to attempt a hostile takeover of Nintendo? And don’t kid yourselves, any attempt at Nintendo would have to be a hostile purchasing of its stocks since the company itself will, like most slightly xenophobic japanese companies, would have 0 interest in being purchased by Apple.
You say that it would make a great pairing, but how so? Apple has absolutely no experience or value in the gaming market, Nintendo has no interest or value in the digital music distribution or hardware market, nor the PC market (Remember the 80s? they did learn their lesson by allowing just some of their brands to touch the PC) There would be no synergies between the two brands currently, and Apple would be very much out of its depths in the video game industry.
While Apple has cash, you forgot to mention that Microsoft invested in Apple computer when it was around $ 20 a share. They have made close to $ 5 billion in their investment without doing any work. Talk about smart investing.
From Jon Fortt: Actually, Microsoft sold off its Apple investment a few years ago.
Clearly Apple and Google are and have been in bed together. Google has brought a lot of usability to the iPhone and Eric Schmidt is on Apple’s Board of Directors.
It seems likely that a Google bid for the new wireless spectrum would likely include Apple as a partner in exploiting their investment.
After all why would Google go out and reinvent the cell phone when Apple has clearly created the best in breed cell phone for quite some time to come.
I don’t know why everyone’s assuming Apple has any interest in acquisitions. With that kind of money, the key is to re-invest in their own products using the creative innovative strategy already in play, they’ll be able to outprice and outpace every PC maker pretty much, and put out of business a lot of the phone and gadget divisions of other businesses as well. Palm, Motorola, Kyocera, won’t be able to keep up. Apple’s prime has, and I stil think is, to become the “main” computer people use. They most logical way to do this is to outdo PCs in every respect through product development.
Apple could also bundle the iLife suite with every retail PC package. With a no-brainer pricing, every PC manufacturer would take the bundle option, automatically making them a “digital content management designed PC.”
If I were Apple, I’d buy Adobe (if they can afford it, Adobe must be worth about $25B) and would create a new division to wholeheartedly serve the creative application suite of Windows.
Port the entire iLife suite to Windows with the exact Mac look and feel. Price it to make it a no-brainer. Nothing of its kind exists in the Windows world. And if Apple doesn’t do this, crummy alternatives will surely arise that might prove extremely profitable, no matter how crummy. Never forget the lessons and profitability of DOS. Strategically speaking, Apple has an opportunity to dominate the creative management suite, a consumer trend that has no demand barriers in sight, in the similar way that Microsoft dominates the office productivity suite.
Its critically important for Apple to lead the creative digital era and not limit itself to great computer/appliance design. Great application development of creative suites, for both the Mac and Windows market, will create another halo effect of Macintosh hardware sales that could dwarf the mighty halo effects initiated by the iPod and iPhone.
The whole world will never use the Macintosh. But it will be more than happy to use the iLife as their default digital creative management suit.
The rumor of Apple acquiring Nintendo has been around for more than five years. Five years ago Nintendo stock was low, now it is very expensive. Apple has a strategic need to support games, the best way to do this is with partnerships and strategic investments.
Apple’s tradition in acquisitions has been to acquire technology or strategic investments. They have an above average success rate. This only requires small amounts of cash so no significant impact on the $15B. It seems to me that the cash will just grow over the years with no major investments.
TIVO is cheap but does not make sense. Apple could reproduce this for less than the cost of an acquisition. There is already an open source DVR that can do everything TIVO can and is much cheaper. DVR is a low margin business, better to add that functionality to iTV.
A NAND acquisition makes some sense, but they tried to do a $2B deal with Samsung which did not work out. It looks like the cost of NAND to Apple on the open market is better than making an investment with a NAND manufacturer to ensure supplies.
No need to invest in retail, the current strategy is working fine. Store in store strategy for locations and countries which are not a good fit for the Apple Store.
700MHz would provide a great opportunity for Apple, but why buy and have the problem of developing infrastructure. Just partner with a company like Google who has already committed nearly $5B to acquire the spectrum, complete with an open access commitment.
Any major acquisitions would have a competitive component, but Apple is so different that the competitive issues are not so important. This leads me to think of the competitive issues more in the area of content. So an acquisition of one of the big music labels would make sense, though there maybe some anti-trust issues. The minor labels already a love Apple.
I don’t see Apple buying most of the listed companies, possibly Nintendo, but only for the Wii if so. Problem is their maybe a huge cultural hurdle to overcome, Apple has a very distinct culture and picking up such established companies would be difficult. I see they may find a little niche, but I would like to see them make the Winpad type of pc work. It has been out there, but with lots of issues and little market penetration. Apple’s primary markets are education/video & audio in the business world, i___ users in the tech and teenage world, and laptops to the young adult/teen consumer markets. I think an ipad success would be just up their alley to schools….plus they like putting the apple logo out in the open where everyone sees it — not gonna happen with a chip maker. Tivo…too commoditized, I get a dvr for $7-10 a month as does everyone else using dish/cable. Palm, outdated and too much competition. RIMM…again culture thing and not the right market, apple is not aiming for the full business corporate market yet, they like to make things people will play with….other than the limited gaming for sitting at airports, rimm blackberry is a business tool product. So apple…arm all students with ipad notebooks and lets ditch pens and paper.
Apple will announce a multi-touch Table PC next year.
I think the money could likely be used to buy Avid.
Avid is not going to NAB this year and has been sans a CEO for some time now. Final Cut Pro has eaten their lunch, but Apple can’t seem to crack fully into the broadcast world.
This would be a great acquisition…
All great ideas. TIVO might help their Apple TV direction. The 700 spectrum help the iPhone and be a good asset. Nintendo please the Mac Gamers…BUT, consider this:
How often do so many people trust and believe in a business leader, to make good products, to then make them better and cheaper; to support their products, to make them as best as possible? It’s rare. Hold an iPod in your hand and you know you’re holding Quality.
It’s obvious. Steve Jobs should run for President!
Seriously Wouldn’t it be nice to have politics as high quality as an iPod?
Apple already missed the boat on the Cell carriers. They should’ve bought Helio or Boost and THEN relesed the IPhone exclusive. I hear they are planning to enter the Video game arena perhaps by buying Sega?
They’ll use it to buy spectrum. The world is changing, folks.
Consider the fact that AT&T is massively, massively peeved at Steve Jobs for some reason. iPhones are selling like hotcakes, AT&T has a half-decade exclusive, and they still went for the jugular last week by sabotaging iPhone sales. Why?
Because there’s trouble in paradise. Steve Jobs has been saving his pennies for something big, and not “big” as in “new computer”. BIG.
Perhaps they could do something truly useful.
The United Nations says that $80 billion could provide all the poor people in the world with clean water, basic health care, basic education, and basic nutrition.
If Apple started the ball rolling with their cash maybe others would join and begin the very dream of God on earth, the beginning of the end of all suffering, world peace who knows!!!
Now wouldn’t that make them proud of themselves!!!!
When has Cisco paid a dividend??
I’ve owned the stock for over 10 years… does the author know something I don’t know?
Please check your facts.
FYI, Tivo could be bought with pocket change at this point. Same for Palm. Both are worthless to Apple and pretty much anyone else. Circuit City? Are you kidding? Maybe Apple should buy Macy’s while they are at it.
I personally don’t think Apple needs to make any big acquisitions right now. But if I had to pick one, I’d say buy RIMM.
What Apple needs to do is spend money and make a push into Asia and the rest of the world. They need to open Apple stores in Beijing, Seoul, Shanghai, Hong Kong, and Singapore. And fix sales in Japan.
I like the Nintendo idea, it will compliment Apple’s consumer business very well. They get a popular handheld gaming device in the DS which would compliment the Ipod very well and they also get entry to the living room with the Wii which will compliment Apple TV. They also get a lot of propriety characters that Jobs can use in his marketing spins. They also can port the Nintendo specific games to the Mac which provides them the needed advantage in gaming vs the PC
With an excess of $15.4 billion, Apple could stand to make more money if they developed a laptop and desktop that is about $600-$900 cheaper than their current versions. Apple could be the company that could close the digital divide for poor Americans considering so many of their products have become integral products for so many.
Yes Steve Jobs probably has better ideas than any of us. That said: Al Feldzamen’s iPhone voice recognition software idea is great. IMO Apple should have bought Dragon Naturally Speaking a long time ago — maybe they were fooled at the time by the empty promises of an OS X version. I don’t know what’s involved in getting true voice recognition software working on the iPhone, but at least voice recording technology is simple, and hopefully will be out with the next firmware update.
Bidding for the 700 MHz spectrum does make sense, but wasn’t this past Monday the deadline for officially entering the bidding?
Buying Adobe clearly would be one approach to start a central assault on Windows — force over time Adobe users who still run on PCs to switch to Macs, thus dragging many a Windows only shop kicking and screaming into OS neutrality. The problem is, it is a risky proposition — resentful users, new competition cropping up in the Windows space, Apple losing software development focus…
A strategic investment in gaming might make a little more sense — letting MS buy Mac game developer Bunge was another big mistake. An AppleTV DVR would work, but I hardly think Apple needs to buy TiVO — they could develop their own or buy Elgato for a lot less.
I have to say, buying TIVO makes great sense. iTV was a flop, but iTIVO is a fantastic idea. Great user interface ala apple, great customer loyalty ala apple, best of breed, ala apple, fantastic patents.
Why not buy Nintendo. Integrate the IPOD with gaming functionality from the Nintendo DS and integrate Apple TV with the Nintendo Wii
Why not invest in R&D to develop a “hand-held communication device” that allows you to make voice transmissions over a cellular network AND browse the web! You could include an email client and maybe even a text messaging client. IF there’s room, you could squeeze in a calendar, and maybe something to type in some notes.
Also, including the capability to store and play digital music would be very nice, but I can’t see how that would be possible in such a small, “hand-held” device.
Hey!… since it would have access to the internet, how ’bout a cool map feature that showed you how to get from here to there??
And give it a cool name, like….. “Knowledge Navigator” !!!!
THAT is what I think Apple should do with their $15 billion.
What?…. they’ve already done it??
It’s called the iPhone??
Oh.
Never mind.
Why not by one of the television networks or one of the big four music labels…..or how about the Beatles catalog……
Why not invest in smaller companies like alternative energy and emerging technologies, as Intel has done. Why not also put money in pure research, something that could also pay dividends down the line, as Microsoft has done. How about developing innovative ways to bring development to the inner cities. Not charity, but technology schools or something similar. Be a participant in the uplifting of society. There are many ways this can occur. They can be a champion here, as Google is becoming. Silicon Valley has so much money stored up that it does not yet fully know what to do with it. 5 of the 7 companies listed above are from SV and have huge cash hordes. This is really unique in business history, especially relative to the size of revenues produced.
New thinking would address this issue in a fresh, new way. There are vast possibilities. Right now, Google is the leading edge in this thinking among bigger tech companies. Smaller firms might have even better ideas; and could be the forerunners of something truly great in society. The emergence of a new social contract between business and society.
Must be nice to be Steve Jobs. Apple seems to have made handheld devices a cool trend like Louie Vitton handbags. It is obvious Jobs has mastered making technology fashionable but hasn’t put much emphasis on the business device(s). If and when Apple can manage to make a full product line of intuitive devices that work for the progressive tech hipster while bridging the gap and offering business friendly (windows compatible platforms) Apple will be on it’s way to a potential world dominance of handheld device technology.
When a corp. buys back it’s own stock, they are taking shares OFF the market reducing a supply already in high demand.
Jobs will eontinue his record of revealing decisions that nobody, NOBODY…. expected.
Apple buy Tivo, Netflicks, Palm or Circuit City. No thanks.
It is my impression that Apple buys smaller companies that will help make their products better. None of those companies will make Apple’s products better.
Use some of the cash if an opportunity presents itself like a wifi hotspot that covers the entire US making G3 look like a snail and making internet telephone calls a possibility putting the cell phone carriers out of business. That would be a move worthy of Steve Jobs and Apple.
Oh yeah, it’s time for a stock split don’t you think?
Apple should blow all of the cell phone carriers out of the water by outbidding everyone for the 700 MHz spectrum when it comes up in January.
Then video iChat could become mobile with VOIP.
Scotty, beam me up!
Jobs will surprise us. Many posts are about technology - what really sets Apple apart is *design*. Jobs has the knack of taking something with potential and maximizing the user experience.
Look for something where Apple can add to the user experience. That is where they can best use a few billion $.
GUESS WHAT FOLKS, JOBS AND CO ARE DOING JUST FINE MAKING THEIR OWN DECISIONS. LOTS OF ARM CHAIR QUARTERBACKS OUT THERE SECOND GUESSING THEIR EVERY DECISION THAT INVOLVES REVENUE. AS FOR ME, IM A HAPPY, JOYOUS AND FREE STOCKHOLDER THAT BELIEVES IN THIS INNOVATIVE JUGGERNAUT OF A COMPANY. ASK ANYBODY ON THE STREET WHAT AN I-POD OR I-PHONE IS AND THEY’LL KNOW WHAT YOUR TALKING ABOUT. ASK ABOUT A ZUNE AND YOUR GOING TO GET A BLANK LOOK. JOBS ALWAYS HAS SOMETHING UP HIS SLEEVE, THATS BEEN PROVEN. TRUST HIS LEADERSHIP BOYS, HES SMARTER THAN ALL OF US COMBINED.
the people who think apple sucks are the idots who don’t use them in the first place if the kids using pc’s would put down the gaming and use the computer to work not play they might already know why apple has 15 billion stockpiled. Their is no way the zune witch is not as friendly as the ipod will make the ipod extinct. apple inovates products and microsoft and other pc company’s sell you old waiting techonolgy that has been sitting in some tiwaneze factory for 6 months and thats sapose to take out apple haa. i guess people buy bad advice every day just glad idon’t cause i bought a mac.(i also own 3 pc at this time all are collecting dust like old junk WAITING FOR THE LAND FILL AND THAT SUCKS!)
I bought AAPL at $60. It’s at $190 right now. What to do? A millionaire once told me “no one ever went broke taking a profit” but I’m not sure AAPL won’t continue to outperform the market. They make great products and they have a great rep among tech-savy hipsters. Steve Jobs can seemingly do no wrong.
If I was younger I’d go try to get a job with those hippies. If you stand close enough to them, they’ll make you rich.
really its too bad sling media was already purchased by echostar, because that would have been an incredible addition to AppleTV, And since it would be redesigned by Apple, it would surely be easier to set up and use…
I don’t think they’d buy any of their suppliers, apple makes consumer products, and doesn’t want to get distracted with internal components (that frankly wouldn’t really benefit from Apple’s great design team).
Perhaps they should buy vonage. A struggling company with good technology in place… You could integrate into Airport and with ichat, and its a nice parallel to the iphone business
how about Apple just holding onto the money? In times of financial instability, Apple will be able to act as its own bank indefinitely. Let ‘em build up a 50 billion cash hoard!! This will drive stock prices much higher than any type of paltry dividend payout.
The big play, if one materializes, will be Sun. Apple needs to get into the office in addition to the home. Sun needs to get onto the desktop as well as the computer room. Both players have common technology - UNIX and Java. And there is absolutely no overlap - even Apple’s experience with servers is complimentary.
As a current Apple stockholder, I think that it’s time for Apple to declare another 2:1 stock-split. That way it doesn’t have to commit itself to a dividend-issuing process, and really wouldn’t incur that much of a cost from it’s cash coffers, if at all.
Additionally, it would make shares more affordable to the public, adding to Apple’s sizable cash position.
how about consider buying BOSE or Sandisk. They are within reach with $15B. Both are strategic to APPL’s product. BOSE with sound and SNDK with NAND flash
There is one app that would be a KILLER for the iPhone, and just about put every other cell phone into the dungeon. This is DICTATION software, that would permit a user to dictate not only the dialing data for an outgoing call, but an outgoing Email as well. Then the user could open the Email on a desktop, and file it or print it, etc.
So Apple should buy the iListen technology, and improve it to fit into the iPhone . . .
Why on earth would Apple be buying back its stock when the stock is soaring? Remember the whole ‘buy low, sell high’ thing? Of course, Dell is buying their stock back because its value has plummeted in the last couple of years. Apple will only do so after their stock takes a tumble and they can repurchase at a decent price. Otherwise they’ll hang onto their cash for internal development projects, strategic acquisitions, and to weather any unforeseen bursting tech bubbles. Don’t look for the company to squander their cash on high-risk M&A activities.
Re: FM
That’s some wishful, ancient, and incorrect thinking. Apple never “dominated” the computer market, they were constantly at odds with Big Blue. The Zune’s a noninnovative knockoff and the market has already made its choice on the iPod. And how’s Mike Dell’s company doing lately?
Re: Rick Tarpley
I think that’d be a great move for Apple to even go at alone, but including Google could strengthen them.
Apple has so much cash because they have very little debt. Before Fred Anderson left in 2004 he eliminated a whole bunch of it, and even back then Apple had around $4 billion stuffed in the matress. Apple’s always had the money to acquire large companies. Problem is, doing this entails acquiring debt so I wouldn’t expect Apple to go out and buy TiVo or Circuit City or ESPECIALLY Netflix any time soon.
Where do these goofy ideas for columns come from anyway? Apple should buy TiVo, an stagnate hardware maker with one product of proven limited appeal? Or Neflix, a distribution by direct mail e-tailer whose commodity (DVDs) is on the way out technically. Or Circuit City, a jumble shop of other vendors competing products when Apple stores already sell Apple products that customers line up for? I don’t think so. Apple could and should buy some soon to be wildly successful product developer whose gizmo fits the Apple model and showcase it, but such outfits are below the level of most people’s radar.
Apple probably will look to where consumers want to be with lifestyle and find or develop a product that lets the consumers reach that point. It sure worked with the iPod and iPhone. One slot that is wide open is a good ebook reader, and I don’t mean the Kindle with some of the warts rubbed off–a really good tool for reading. One whose first goal is to be as fun and easy to use as an iPod, not a trap to drag the consumer into some predatory business model. Maybe the rumored ultra-thin Mac laptop will do this. I hope.
I think it’s very possible Apple and possibly together with Google could bid on the upcoming wireless frequencies auction.
If history is any indication, Apple will loose iPods dominant market share, just as they did with computers. Zune will take over, and apple will have to close and return money back to shareholders, as Michael Dell once famously said.
Apple is very well established in the consumer industry as ipod and apple laptops are being grabbed by every household. I think now apple should also concentrate on penetrating into the corporate world. As it has a lot of cash which it should use to acquire a company like Sun Microsystems (JAVA) which will give a lot of advantage to build up a good relationship with the corporate clients and push its software and hardware.
Adobe. Apple has surely looked at Adobe as a possible acquisition — probably managed as a subsidiary.
Why? Because while Adobe does not have the style and discipline that Apple has in designing for human users (you ever use a complex Adobe product?) == Adobe has a ton of incredible SW functionality and product lines that overlay current Apple core markets and that could be used to strengthen Apple’s marketshare in existing markets (Adobe currently supports Microsoft and Apple…) as well as it’s future marketshare in other markets where Adobe’s products could be the deciding factor for Apple sales.
Odd that the suggestions for Apple failed to include Warren Buffet’s Berkshire Hathaway method - declaring a stock dividend, which would give those shareholder’s who want a CASH return the chance to get it while maintaining theier present holdings, and would not impact Apple’s cash on hand for acuisitions and other legitimate corporate uses. It makes the most sense.
you should change your chart to a 5 year time period.
Or buy the entire 700 spectrum.
Buying TiVo is something Apple should have done already, since it would be an ideal companion to the iTV project. And when will Apple by Palm, famous for their Treo smartphones?
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Dear Mr Jhobs
You don’t now me but I now you as being a man of grate integrity and honestly. My name is Nkjei Mujori and I am from Lagos, Nigeria. My father was the last king of Nigeria before he was… Hold on just one second Mr. Jhobs, someone is just now kicking down my front door….;