Hattig said:
Well I haven't done any such course.
It just seems logical that for a company with billions in the bank, that can afford to research pretty much anything entirely from those billions, that it doesn't need to rely on external funding ever. It doesn't take $10b to research anything that Apple's made.
If they get into spaceship design then maybe there'd be a high R&D cost up front that would require borrowing beyond Apple's saved billions.
Sure, if it is a small company it may help them to spread the risk when developing an idea, and the don't have billions anyway, but borrowed money isn't free. Your own money is. Unless you get a loan deal where the interest rate is lower than the interest rate on the company's savings account and it's simply better to borrow than to spend your own money.
I'm not sure why your hung up on research costs. Why do you think companies borrow money only for research? Why do you think that research the main cost of doing business? This is a very minor part of Apple's operating costs. About 4%. As in the other 96% of the money Apple spends day to day goes to things like marketing, manufacturing, office salaries, rent, electricity, phone bills, paper, pens, etc.
Forget about Apple, look at a guy that wants to build a supermarket. He has enough money to build it himself. But he gets a mortgage instead, borrowing the money. Now, since he only had to use a part of his own money, instead of all of it, he decides to use his other money, along with more borrowed money, to build 3 supermarkets instead of one. Yes, he owes interest on the borrowed money. But now he can make triple what he would have if he only used his money.
Of course, if the supermarkets fail, he is in big trouble, owing a lot of money. But I explained that before.
And you really need to forget about that 10 billion in this situation. That is there for many reasons other than a piggy bank for running the company. Its there as a cushion in case the company starts losing big money. Like if people decided to stop buying iPods and macs. It is also there to provide psychological support that the company is strong. It is there in case Apple wants to buy another company or invest in another company. For example, Apple has owned or does own large percentages of companies like AOL, Akamai, ARM semiconductors, etc.
It is not there just for developing an idea.
Apple makes enough money day to day to cover the day to day running of the company. That includes research and development costs.
Borrowed money isn't free. But its often better to make money using someone else's money instead of your own. And actually, considering what interest rates have been at over the past 5 years, borrowing money was in fact essentially free.
I understand that this might be complicated or new for you. And it can get very complicated. You really might want to buy a book or take a class about this. I might understand this stuff, but I'm probably not the best person to teach it.
