It's actually worse than that. They have plenty of cash to buy back shares and increase the dividend. But they borrow instead so they don't have to repatriate the cash and pay US corporate taxes. Nothing but CFO tricks.
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Apple Reports First Year-Over-Year Revenue Decline Since 2003: $10.5B Profit on $50.6B in Revenue
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With the old contract/subsidy model... you paid $199 for the phone and then you paid your phone bill every month. A portion of your monthly bill was allotted to pay off the remainder of the phone. ($450)
But after those two years... your bill still included those hidden phone payments. Your bill didn't get smaller after the phone was paid off after 24 months.
Unless I'm completely off-base here... that's how it was.
Today we have a different payment scheme. The phone payment portion of the bill is clearly separated from the service portion of the bill.
And after the phone is paid off... you don't have the pay the phone portion of the bill anymore. That's how it should be.
Why would it be a good idea for Apple shareholders for Apple to pay high taxes though?
Yes, cash is overseas. Debt is issued for buybacks and dividends.
[doublepost=1461724544][/doublepost]If Cook was taking care of business share buybacks wouldn't be necessary.
Exactly. That means he's run out of ideas. Why not start a VC fund to incubate new ideas? Maybe buy a studio like Disney to kickstart Apple TV? I'm sure there are better ideas than buying back stock and hiking the dividend. He's practically admitting that Apple's growth days are over.
Who then should replace Tim Cook? Who out there in CEO world can take Apple to a "next level," given that they are the most successful technology company in the world?
Who on this planet would be able to take a company already making ~$250 billion a year in revenues and ~$50 billion in profit...and make it better?
Don't forget 40% of Silicon Valley's profits.
The whole stock market is based on confidence and future outlook. You can make billions of billions dollar today does not mean you will do well in the future.
If a company does not show its future potential, investors are going to sell the share. If investors lost confidence with one company, its share is going to tank.
Stock market can push a company to high level and can destory a company overnight.
Remember Nokia, BlackBerry. Those company generates billions of billions of dollars before. Their finical Outlook were perfect. But then they all ranked. You cannot really guarantee Apple won't repeat that. Most investors aren't Apple fanboys, they are betting their money on Apple. When Aplle failed their expectations, they will sell their share.
Come on - you know better than that - Cook inherited a brilliant product line-up. The $$$$ you refer to were "birthed" under Steve's leadership. There is a lag (good or bad) where the new CEO lives with the previous CEO's pipeline / decisions. Only after several years do you see what the new CEO brings to the table. Cook is at 5 years and it is increasingly clear that he does not have product vision or presence or ....
Apple's R&D spending says otherwise...
But by all means, lets freak out that Apple is within the guidance they themselves set.
Sure, anything can happen. GM can go bust, The big wall street brokerage houses could go bust. There's a huge difference between nokia/blackberry/motorola and apple; apple has billions stashed away, whether it's overseas or here is irrelevant. They "only made" $50B this quarter. How many other business "only make" $50B in a quarter.
Repeating and rerepeating that amorphism enough times, is not the same thing as clicking your heels together three times and wishing you were home. The universe doesn't work that way.
Spending on R&D means nothing. It's how it is spent and what revenue stream can be created from it. Otherwise, it's just a glorified science project. What unique innovation have we seen from Apple these last five years? Just better, faster, cheaper. Not a bad way to make short term profits but it shouldn't be at the expense of long term innovation.
You must have missed the part, when apple was raking in the money when the country was devastated due to the financial conditions in 2008.
One persons innovation is another persons meh. If apple didn't innovate anything in the last 5 years, then neither did any cell phone manufacturer. Yet apple still managed stuff its' bank account. So people are buying, regardless of who believes there was no innovation. To point out the obvious.
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Think about it for a minute.
I am certain they are trying to figure out what drastic changes need to be made. But the fact remains, they lost their Thomas Edison so all they can do is diversify as much as possible. 3 more quarters like this and Cook will wisely step down.
R&D spikes mean something has made it through the pipeline and is gearing for production. The spike in R&D is the largest since even before the iPhone. They are working on something massive. Historically it's only a couple of quarters after the R&D spikes that the project is actually announced.
So please spare me with your R&D dismissal. Anyone familiar with how the Tech industry functions will tell you this is a big deal.
Apple made 50 billion this quarter, then they project they will make 40 billion next quarter... That is 10 billion dollar drop. Can you guarantee that the revenue won't drop again?
It might as well the beginning of Apple's decline. But that doesn't mean Apple won't be up again. It is depends what Apple brings on the tablet. But if Apple acting like past 2 or 3 years, their decline is just started.
A growing chorus : http://gizmodo.com/everything-apple-introduced-this-year-kinda-sucked-1749308570
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Rubbish - it means no such thing. Under Cook, it is more likely wasted dollars of a failed initiative.R&D spikes mean something has made it through the pipeline and is gearing for production. The spike in R&D is the largest since even before the iPhone. They are working on something massive. Historically it's only a couple of quarters after the R&D spikes that the project is actually announced.
So please spare me with your R&D dismissal. Anyone familiar with how the Tech industry functions will tell you this is a big deal.
Sure, go ahead and dismiss decades of Silicon Valley business cycles. This is how the world works regardless of what you call "rubbish".
There's no doubt that Apple milked every last penny they could out of the smartphone market with savvy marketing, brand loyalty, cheap internals, cool design, and some amazing software.One persons innovation is another persons meh. If apple didn't innovate anything in the last 5 years, then neither did any cell phone manufacturer. Yet apple still managed stuff its' bank account. So people are buying, regardless of who believes there was no innovation. To point out the obvious.
[doublepost=1461726010][/doublepost]
Think about it for a minute.
But every market peaks at some point. Companies that want to stay relevant across new markets innovate so they can lead the next market.
Microsoft is attempting to do that with cloud and services instead of resting on their laurels with Windows and Office. They had to get rid of Ballmer to do it.
Amazon is moving into a leader in cloud and entertainment instead of resting on their laurels with online retail.
Google is also expanding into cloud. With Apple as a customer.
Facebook is moving into VR.
Apple has talked about live TV for years with nothing to show for it while Sony Playstation VUE and Sling already have offerings that are gaining steam.
Apple is investing heavily into electric vehicles but it looks like Tesla is winning the battle and 2020 will be too late.
Where is the innovation besides thinner, faster, and prettier?
I really doubt that he will step down on his own - the board also needs to go for allowing him to continue on this iterative improvement approach vs game changers.
The chorus is growing: http://gizmodo.com/everything-apple-introduced-this-year-kinda-sucked-1749308570
The chorus is growing: http://gizmodo.com/everything-apple-introduced-this-year-kinda-sucked-1749308570