well i would like to see them split the stock and then buy some shares back to protect them selfs from a hostile take over i think Nintendo owns more than 50% of it's own stock so i guess that means no one could take them over unless they sold the shares they hold.
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Apple's $15 Billion Cash Reserve
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I was gonna say why bother with Circuit City, until I read the rest of your post!
I'm sure acquiring left and right isn't the best way for AAPL. Look at MS, all they do is aquire. They have over $40billion but alot of the acquisitions turn out bad or taking well over 5 years to beak profit.
Apple needs to stick with innovating on it's own, which it has done pretty well. I think the next big investment for Apple is to target the business segment of the market in which MS owns outright for software and HP/IBM/Dell own on the hardware side. Alot of people think buying your distributor or vendors seems like a great idea but it's usually not. Does Nokia, LG, Samsung, RIM own any wireless spectrum? NO
I'm sure Apple has something up there sleeves right now. I'm sure their biggest expense will be to continue to innovate so their products like the iPod doesn't become what the Walkman, and their iPhone doesn't become the Beeper (obsolete).
Apple needs to stick with innovating on it's own, which it has done pretty well. I think the next big investment for Apple is to target the business segment of the market in which MS owns outright for software and HP/IBM/Dell own on the hardware side. Alot of people think buying your distributor or vendors seems like a great idea but it's usually not. Does Nokia, LG, Samsung, RIM own any wireless spectrum? NO
I'm sure Apple has something up there sleeves right now. I'm sure their biggest expense will be to continue to innovate so their products like the iPod doesn't become what the Walkman, and their iPhone doesn't become the Beeper (obsolete).
My Proposal to Apple's Board
Uses of $15B I don't understand:
Buy Adobe: Why? It's a very different corporate culture. They make great software for the Mac already. This seems like it would be very expensive for little gain.
Buy Dell: I think this was suggested out of spite for Mr. Dell's comments about liquidating Apple. This is a very bad idea.
Restart Dividend: Dividends are so last century. Keep focus on increased share price and market cap.
Cash distribution: I owned Ford stock in 2001 when they were sitting on about $20B and gave a cash payout to stock holders (who voted on the plan) to get rid of the money. I was hugely opposed to this idea and thought Ford should keep the cash or at the very least have $10B in cash reserves. Turns out I was right, the SUV market crashed and and now Ford has had to bet the farm and take out a loan for $18B. If they had listened to me they would have been able to weather the market shift and still have $2B in the bank. So, why this long story about a car company on an Apple website? Cash is King. And Apple exists in a VERY volatile industry. What seems like a great future can quickly turn. A significant amount of cash on hand is good.
TIVO: TIVO is hardware, Apple doesn't need more hardware to deal with selling and supporting. The issue going forward is content. iPods and Apple TVs are expensive paperweights without content. Now I know that TIVO has gotten into the market for IP delivery of content, but it doesn't impress me as as well developed as the Netflix's Watch Instantly (I know I'm ignoring the fact that WI is not supported on a Mac, this is to not confuse the issue with things that are easily fixed). Netflix WI provides, or can easily provide, everything that Tivo's internet based content does without all of the hardware. Do you think Apple wants to make an investment where they have to support old hardware? NO, Apple would want to acquire a company that sells Apple hardware and increases the value of iPods and Apple TVs.
Here is my proposal:
Buy Netfix. Cost $1.55B, that's their current market cap at least. They are a studio for indies (All those people who got their start on YouTube need somewhere to take their fame). They have a lot of older titles and new TV shows (Heroes for one) already available for IP distribution. As the studios soften up to the idea of content over the internet Apple/Netflix would be there to capitalize.
Keep $5B in cash. This is the rainy day fund. Add to it with all the profit from Apple TV sales and new Netflix supscriptions. I just read an article about Apple's corporate succession plans, lets face it S Jobs is still human and will not be around forever. His death (Heaven forbid!) or retirement could be a huge hit to Apple's identity due to how much he is linked to Apple's identity.
Buy $8B in iMacs and give them to public schools. To keep the math simple let's say Apple's cost for an iMac is $1000. That makes for 8 million iMacs in our public school system. Not only does Apple get tons of publicity and good will it also gets to reassert itself into education (not to mention the tax write off!). Remember the '80s. Kids that grow up using Macs in school buy one when they go to college. This 8B in cost would pay returns for decades. There are about 100,000 schools in the US. So 8M iMacs means 80 computers for every school in the US!
Just my $0.02 on Apple's $15,000,000,000.00.
Uses of $15B I don't understand:
Buy Adobe: Why? It's a very different corporate culture. They make great software for the Mac already. This seems like it would be very expensive for little gain.
Buy Dell: I think this was suggested out of spite for Mr. Dell's comments about liquidating Apple. This is a very bad idea.
Restart Dividend: Dividends are so last century. Keep focus on increased share price and market cap.
Cash distribution: I owned Ford stock in 2001 when they were sitting on about $20B and gave a cash payout to stock holders (who voted on the plan) to get rid of the money. I was hugely opposed to this idea and thought Ford should keep the cash or at the very least have $10B in cash reserves. Turns out I was right, the SUV market crashed and and now Ford has had to bet the farm and take out a loan for $18B. If they had listened to me they would have been able to weather the market shift and still have $2B in the bank. So, why this long story about a car company on an Apple website? Cash is King. And Apple exists in a VERY volatile industry. What seems like a great future can quickly turn. A significant amount of cash on hand is good.
TIVO: TIVO is hardware, Apple doesn't need more hardware to deal with selling and supporting. The issue going forward is content. iPods and Apple TVs are expensive paperweights without content. Now I know that TIVO has gotten into the market for IP delivery of content, but it doesn't impress me as as well developed as the Netflix's Watch Instantly (I know I'm ignoring the fact that WI is not supported on a Mac, this is to not confuse the issue with things that are easily fixed). Netflix WI provides, or can easily provide, everything that Tivo's internet based content does without all of the hardware. Do you think Apple wants to make an investment where they have to support old hardware? NO, Apple would want to acquire a company that sells Apple hardware and increases the value of iPods and Apple TVs.
Here is my proposal:
Buy Netfix. Cost $1.55B, that's their current market cap at least. They are a studio for indies (All those people who got their start on YouTube need somewhere to take their fame). They have a lot of older titles and new TV shows (Heroes for one) already available for IP distribution. As the studios soften up to the idea of content over the internet Apple/Netflix would be there to capitalize.
Keep $5B in cash. This is the rainy day fund. Add to it with all the profit from Apple TV sales and new Netflix supscriptions. I just read an article about Apple's corporate succession plans, lets face it S Jobs is still human and will not be around forever. His death (Heaven forbid!) or retirement could be a huge hit to Apple's identity due to how much he is linked to Apple's identity.
Buy $8B in iMacs and give them to public schools. To keep the math simple let's say Apple's cost for an iMac is $1000. That makes for 8 million iMacs in our public school system. Not only does Apple get tons of publicity and good will it also gets to reassert itself into education (not to mention the tax write off!). Remember the '80s. Kids that grow up using Macs in school buy one when they go to college. This 8B in cost would pay returns for decades. There are about 100,000 schools in the US. So 8M iMacs means 80 computers for every school in the US!
Just my $0.02 on Apple's $15,000,000,000.00.
$ is freedom
Love all this vicarious spending.
Apple can self-fund whatever it wants to develop without any outside financial involvement. Or input on design or direction (it's a dirty old world out there...).
It's really terrible that Apple is in the black and insulated from market wobbles when the convention is to be in the red (yes I'm being sarcastic; companies, like individual people, love to kid themselves that debt is good).
If they MUST buy something to keep most of you lot happy they should buy Binuscan and put out a true photoshop killer.
Cheers!
Love all this vicarious spending.
Apple can self-fund whatever it wants to develop without any outside financial involvement. Or input on design or direction (it's a dirty old world out there...).
It's really terrible that Apple is in the black and insulated from market wobbles when the convention is to be in the red (yes I'm being sarcastic; companies, like individual people, love to kid themselves that debt is good).
If they MUST buy something to keep most of you lot happy they should buy Binuscan and put out a true photoshop killer.
Cheers!
Not really. When Congress lowered the tax rates on dividends, they came very much back into vogue. I personally invest in several high-dividend stocks, one of them set to automatically reinvest dividends. These have been good investments. Dividends can dampen volatility by rewarding investor patience. They don't impede share price at all. In fact, AAPL would probably take a very nice bump up after a dividend was announced. Investors like dividends.
The Ford analogy is not a good one. Ford is not growing; in fact, they are shrinking. Increasing dividends when a company is in desperate need of capital reinvestment is not a good idea. The leaders at Ford may not have known how desperately they needed to reinvest in their own products, but then, Ford is a poorly-run company.
I respectfully disagree. Ford in 2001 was making a lot of money and growing. They had $20B in cash from all the profits they had made during the '90s. The market changed under Ford and they were unable to react because the cash distribution got rid of all their cash. This was not an increase in dividend and was a shareholder instituted one-time cash distribution. This all occurred at a time when Ford seemed to be in good condition (just as Apple is today). The fact that Ford is in such dire straits today compared to 2001 is my point as to why Apple should maintain significant cash reserves. Markets change and cash give companies a cushion to weather the changes. Ford didn't have the cash cushion and the negative effects of market change were compounded as a result.
Ford was relying too heavily on one product line, which is a dangerous strategy to follow in a very capitally intense and very low-margin industry. All of the US auto makers were doing the same thing, though perhaps to a lesser degree, and got caught with their collective pants down. Ford got slammed hard because they had no Plan B -- which is a pure management issue. Perhaps you believe Apple is in the same precarious position. I happen not to think so, but that's just a matter of opinion.
Incidentally, I'm not arguing that Apple should give up their cash cushion entirely by any means. If the board declared even a relatively generous $2.00 per share dividend, this would amount to only about 10% of their current cash on hand, and it would make the stockholders very happy campers, without any measurable risk to the company. I have little doubt such a move would boost the share price even further.
Oversized quote seemed mostly on-topic and agreeable.
If Apple were to buy a company it could do so with mostly stock and need not use much cash.
Dividends are indeed so last century, but more to the point, not applicable in their industry where stock appreciation is valued more than dividends, unlike, say, a utility stock.
Apple could make deals with foundations and endowments to sell iMacs at half their cost, thus not eating into cash nearly as much as your proposal, but still getting very widespread adoption plus the added value of a tax deduction to offset their hard or cash costs. at the government's expense.
I for one would suggest they set a goal of ever increasing net cash (medium term investment) assets. Some day Microsoft will be so cheap in relative terms, Apple will HAVE to buy it if only for historical reasons.
Rocketman
I'm sorry, but saying this over and over again does not make it true. Stock appreciation and dividends are both applauded by investors, and it makes no sense to say which one is "more" valued, especially given that declaring dividends tends to boost a company's stock price -- if only because it is seen as a sign of confidence in the company's future. Further, a modest dividend does not make a company's stock comparable to a utility by any means.
Stingy!
No dividends, nothing!
Jobs is selfish, sell overpriced products running yesteryear's OS!
sheesh!
No dividends, nothing!
Jobs is selfish, sell overpriced products running yesteryear's OS!
sheesh!
I hear you.
I understand you.
I simply disagree with you.
I even like you.
Rocketman
Also, put some majo explosives there to make it looks like the company logo.
And it will pulse delightfully during the night.
What's the point of coming on these forums if you have nothing better to do than insult apple, OS X and Steve Jobs ?
I really agree with you on the Netflix idea, keep netflix for the postal rental service on netflix, but add in all the movies/tv shows that netflix holds for online downloading and merge it with iTunes and that seems like a pretty good move.
Could be a good way to save the iTunes movie and TV section as it seems to be going a bit belly up now...
To put things into another perspective, Phillips Electronics has a market value of almost 44 billion and a cash reserve of 17.3 billion (holy moly!) Two large hedge funds are aiming their arrows right now. Although 44 billion (let alone the well over 100 billion that Apple is worth) is a too big of a chunk to buy outright, they have started to accumulate shares. If the number of shares is big enough they will attend an annual shareholders meeting to voice their discontent over that stockpile of cash. And demand a healthy dividend or revenue generating investments. The latter is my assumption. Could this happen to Apple? I dont know their legal structure.
It's a dirty job, but somebody has to do it.
I presume a certain percentage of the outstanding shares have to petition for a vote of the shareholders on any issue, but I don't think this is necessary, strictly speaking, for the board to consider them. I don't think it happened in the case of Microsoft. As much as anything, they were responding to employees who hadn't seem much benefit from their stock options for years. This obviously isn't an issue for Apple.
Heck, " I'm cheap"
They could throw a couple bil my way.
I got some time off and maybe one or two ideas that I think could give them a fair return on their investment. To start with I would fire their entire marketing department and hire people who weren't lier's cheats and thieves.
These idiots are bringing the whole company down by projecting their whims and to hell with reality.
Vote for me!
They could throw a couple bil my way.
I got some time off and maybe one or two ideas that I think could give them a fair return on their investment. To start with I would fire their entire marketing department and hire people who weren't lier's cheats and thieves.
These idiots are bringing the whole company down by projecting their whims and to hell with reality.
Vote for me!
I'm treading carefully into these waters, to minimize how foolish I make myself look.
With all the talk of acquiring Netflix to boost the iTunes Store's content woes - doesn't that still leave the studio executives having to bend to the will of Steve Jobs? As long as that man draws a breath, it seems things will be his way or the highway. And hey, in this case I totally applaud that. NBC was trying to force crappy extra content down our throats to jack up prices, and Steve simply said "No dice, suckers."
So how would snapping up Netflix help that? I understand the mail side of the biz, but not the IP side. Doesn't Netflix have to deal with the studios? If that was suddenly Apple's, how would it be any different than what it is now?
As to the $15B, the blatantly obvious choice is to first give me $50 million as a token of appreciation for all the people I've switched. Next, let's get some engineers in there! OS X late because there weren't enough engineers? Baloney.
But then I ask myself - is there just a finite amount of properly skilled workers out there to hire, at any price?
I guess, after the 50 million to me, throw a couple bil at some nice R&D. I'd love an iJetpack to get from place to place.
With all the talk of acquiring Netflix to boost the iTunes Store's content woes - doesn't that still leave the studio executives having to bend to the will of Steve Jobs? As long as that man draws a breath, it seems things will be his way or the highway. And hey, in this case I totally applaud that. NBC was trying to force crappy extra content down our throats to jack up prices, and Steve simply said "No dice, suckers."
So how would snapping up Netflix help that? I understand the mail side of the biz, but not the IP side. Doesn't Netflix have to deal with the studios? If that was suddenly Apple's, how would it be any different than what it is now?
As to the $15B, the blatantly obvious choice is to first give me $50 million as a token of appreciation for all the people I've switched. Next, let's get some engineers in there! OS X late because there weren't enough engineers? Baloney.
But then I ask myself - is there just a finite amount of properly skilled workers out there to hire, at any price?
I guess, after the 50 million to me, throw a couple bil at some nice R&D. I'd love an iJetpack to get from place to place.
A Fortune blog explores what Apple could be doing with their $15 billion cash reserve that they have accumulated in the past few years.
When asked about Apple's plans, chief financial officer Peter Oppenheimer simply stated that having a few billion on hand helps to fund big projects, though there reportedly had been discussion about buying back shares or issuing dividends to Apple stock holders.
Apple could use the money to make strategic acquisitions. In the recent past, Apple has acquired a number of companies, including PowerSchool, Emagic, Nothing Real, Zayante, and Fingerworks. Apple also has plans to expand into a new campus which could take up to $500 million to fund.
Article Link
Hmm, I don't know... Maybe making the ultra slim macbook and Mac OS X 10.6?
Of course, the more money Apple has the more brilliance they can push out the door 
Apple could use the cash to give away 25 million Mac minis.
They could be used for marketing as contest giveaways. Or given to schools in low income areas.
Or how about a PC exchange program? Send in your old but functional PC with a Pentium III or better and get a free Mac mini. Limit one per household. Then Apple could load Darwin, X11, and a few open source applications on them and give away the 25 million PCs to charity in areas of the world that have very few computers.
I believe that any one or combination of these efforts would just about double the OS X user base. The exchange program would also create a huge Darwin user base without cannibalizing any OS X sales.
Of course, once users get hooked on OS X they are highly likely to purchase a more powerful Mac in the future.
Basically this would likely be the largest and most expensive marketing effort in history.
They could be used for marketing as contest giveaways. Or given to schools in low income areas.
Or how about a PC exchange program? Send in your old but functional PC with a Pentium III or better and get a free Mac mini. Limit one per household. Then Apple could load Darwin, X11, and a few open source applications on them and give away the 25 million PCs to charity in areas of the world that have very few computers.
I believe that any one or combination of these efforts would just about double the OS X user base. The exchange program would also create a huge Darwin user base without cannibalizing any OS X sales.
Of course, once users get hooked on OS X they are highly likely to purchase a more powerful Mac in the future.
Basically this would likely be the largest and most expensive marketing effort in history.