What should Apple do with its $100 billion?

By on March 17, 2012
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Some suggestions for what Apple will do with its piles of cash.

At the end of 2011, according to Apple’s latest financial statement, it had $97.6 billion in cash. By now that is most assuredly more than $100 billion.

Of course, it’s not like Apple is actually sitting on a pile of actual cash worth that much. Instead, the money is in cash, “cash equivalents and marketable securities.” In any case, it’s funds that Apple could use for purchasing other companies, buy back stock, and similar things.

So what do you think Apple should do with all it’s money, besides giving some of it to you?

Judging by the frequent headlines, Apple could buy Greece, at least if it got a good discount. That comparison, which is often made, is, of course, totally false, and what would Apple do with a country anyway?

Apple would be better suited to spend more money on building iCloud. It’s a service, which seems to be just an embryo of what it could, or perhaps will be. Perhaps Apple is already doing this, but I think iCloud could become the de facto cloud service for end users, if Apple plays its cards right.

Personally, I think one of the best things Apple can do is to keep doing what it has been doing: invest in development of hardware components as well as the supply thereof.

Apple has for many years been buying up stock of components, like memory and processors, to assure that it has access to what it needs for its products. Flash memory is the best example of this, but the practice probably goes way beyond that. This practice assures Apple has access to the components, at a certain price and at a certain volume. It also assures that competitors will not.

This is one reason why it will be difficult for anyone else to match Apple on the price and specs of the new iPad:  the new high resolution display will be in very short supply for anyone else but Apple.

Very likely is that Apple will continue to buy other companies. Don’t expect Apple to buy any company you’ve ever heard of though. Apple tends to buy small, independent companies, with important technologies and people, rather than spending money on other brands. For example, in 2011, it acquired the small startup C3 Technologies in Sweden. C3 made photo realistic 3D mapping software, which is now, presumably, somehow used in Apple’s iOS.

Besides, it could of course be that Apple is just sitting on so much cash to be able to weather any financial storm that may be coming. Having cash on hand makes you more flexible as a company, at least to a point.

In any case, if you own some Apple stock, don’t expect dividends any time soon. Apple is on a roll, and with CEO Tim Cook’s tight grip on the leash, it will spend the cash wisely, which does not involve paying anything out to shareholders.


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I write and talk too much about tech. You can find my personal blog at Nystedt.org, my radio shows at dxbtech.com, and me on Twitter as mnystedt.

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