People act like Apple's saved up money is burning a hole in THEIR pockets or something! I don't actually hold any Apple stock, but if I did, I'd feel good about them having that much cash saved up. I certainly wouldn't be putting pressure on them to hurry up and spend it buying something pointless like "Twitter".
Sometimes you can have too much of a good thing. It is concerning to see Apple sit on so much cash without having much to show for it (in the sense of them benefiting from that much cash). They do not need excessive amounts of ash on hand, as they are pulling in $2 billion or so in profits per quarter and not actively targeting large acquisitions.
Apple could:
- buy back shares ($5-8 billion worth won't hurt them long term)
- pay dividends for a few years
- distribute some of the cash on hand to long term investors (held stock say 5+ years)
- expand/create new product lines more quickly
- cut their system prices by 10% (not excessively) to slightly reduce profit per system sold but encourage more systems to be sold
- OR push up the specs a bit more so there is more value seen in the higher prices
- acquire a large compatible company
- acquire multiple smaller companies with an Apple focus so they can push the products more and make them more robust
- pull their finger out and get blu-ray going as a native option
They should avoid:
- buying Twitter as it doesn't serve any real long term value to Apple
- be cautious about buying a large gaming company as they could experience a backlash from gamers if changes are handled poorly
- directly competing with pc companies on price (ie cut prices ok, but don't kill the idea of Apple = premium brand)
I have no doubt the shareholders love seeing the profits but at some point the massive amount of cash on hand offsets the increase in stock price as Apple doesn't pay dividends so the only return to the investor is from stock price increases only. Once the stock hits a brick wall and doesn't move much for an extended period then the shareholders will get really antsy.
Regarding expansion, Apple can only grow so much in the current setup, you can only gain so much market share in an industry based on organic growth alone, if they really want to push to be something more then growth will need to come through expansion. Apple execs seem content to grow organically but at some point the issue becomes this, the shareholders own Apple, the shareholders ultimately control Apple, if nothing happens then the shareholders will eventually vote (force) something to happen.
A different take - the investment in QC should be the manufacturers responsibility and Apple should insist on "x-level" of quality from them or they take their production volume elsewhere.
Could be interesting if they end up with no suppliers or they have to build their own factories and go through their own QC issues from the beginning. If Apple wants you to go from 90% to 95% in QC testing and doesn't want to pay more for the higher quality product then no one will be interested in them and putting the onus on the manufacturer can back fire.
