Perhaps in a pure, capitalist sense, that is true. But what I think Apple realizes is that their one and only responsibility is to make "insanely great" products. If you make products that are insanely great, and delight and wonder people, chances are the rest (money for shareholders) will follow.
Once a company becomes public, it does not matter what they do to earn money so long as they do. The 'insanely great' part is just a marketing concept, which helps them earn money. Why do you think they always try to drive the price of the components to absolute rock bottom and make compromises to do that? To earn more money. Plain and simple.
That last part is what many seem to be missing in the reports I'm reading. Many are claiming this shows Apple think they have stopped growing and they will deplete their reserves. I think you are dead right, the war chest will still grow with a slight lowering of the incline in the graph, that's all.
Apple is going to spend $15 billion per year but how much are they going to profit each year for the next 3 years? There profit for CY2011 is as follows: $5.99 billion, $7.31 billion $6.62 billion $13.06 billion, for a total of $32.98 billion. That's net profit!
Even if we were to foolishly assume Apple's profit will be flat for that next 3 years their "war chest" would see a growth of $98.94 billion - $45 billion for a net increase of $53.94 for a total around $165 billion.
But let's be realistic, Apple is growing and will continue to grow rapidly even if you use a conservative measure.
Pretty much the same thing. Shareholder wealth is proportionate to company value. If you were to do as Mr. Dell once proposed, sell it and give the money back to the shareholders that is what you would hope to get. Your share of the actual value of the company. That is what happens in mergers and acquisitions, theoretically.
Perhaps in a pure, capitalist sense, that is true. But what I think Apple realizes is that their one and only responsibility is to make "insanely great" products. If you make products that are insanely great, and delight and wonder people, chances are the rest (money for shareholders) will follow.
Tech companies that are too focused on making money for shareholders squander their assets and consumer goodwill by relentlessly focusing on the bottom line. They make ill-advised purchases of other companies and let their corporate board drive the company, all the while only looking at the next earnings statement. Perhaps the greatest example of this is HP, which is a total trainwreck of a company I have lost all respect for. Everything they make that I have touched recently, you can feel that drive to make money for the shareholders.
I think Steve Jobs would agree 100%. If he wanted to have done a dividend, he would have done it by now.
He always said the main purpose of Apple was to make insanely great products. (Sorry for the redundancy). The profit was always secondary. It was never about money to him.
I work for a company in a shrinking marketplace, and cut-throat competition, with shrinking profit margins. What is our strategy? We're chancing high profit margins. Which means we will eventually become extinct.
I guess my point is, we need to ask ourselves, what would Steve do? Even though he said for us to NEVER to do that......
I think Steve Jobs would agree 100%. If he wanted to have done a dividend, he would have done it by now.
He always said the main purpose of Apple was to make insanely great products. (Sorry for the redundancy). The profit was always secondary. It was never about money to him.
Really? Please point me to the link for reference on that SJ quote that he always said.
One thing that was part of Steve's genius is that he personally had a passion for the work he was doing, but at the same time he understood that his primary fiduciary responsibility as CEO was to do what was best to ensure the company's success financially as well.
It was not his personal purpose to earn money for himself by working at Apple but it is actually against the law for him not to act in accordance with reasonable expectations in a responsible manner since he was serving at the pleasure of the BOD and the primary reason they asked him to serve is to make Apple successful financially not just to win a popularity contest.
Really? Please point me to the link for reference on that SJ quote that he always said.
One thing that was part of Steve's genius is that he personally had a passion for the work he was doing, but at the same time he understood that his primary fiduciary responsibility as CEO was to do what was best to ensure the company's success financially as well.
It was not his personal purpose to earn money for himself by working at Apple but it is actually against the law for him not to act in accordance with reasonable expectations in a responsible manner since he was serving at the pleasure of the BOD and the primary reason they asked him to serve is to make Apple successful financially not just to win a popularity contest.
I looked around for a few minutes but all I could find that was even close was:
1998 in the midst of IBM's sweeping success with the PC and overtaking Apple, Steve said to his engineers "The Mac has to be insanely great", but I don't think it was being stated with the philosophic idealism you inferred. It was basic survival at that point in time and it didn't really work out all that well for them.
Also
At Pixar he said to his animators. "Make it Great!"
It hasn't even been a year since Steve Jobs passed away, and already they are going against his will.
Steve Jobs is why they have that close to $100 billion in the first place. They should be doing everything he would have done.
On the other hand, he wasn't a banker and either am I, so...
What kind of bizarre logic is that? Was he elected God-emperor?
He was a very effective CEO, but his greatest legacy will be the team that he built - a team that could think for itself. In fact, IIRC, he encouraged Cook to think for himself rather than simply ask 'what would Steve do?'
My understanding is limited in these areas so I would be interested to learn from your perspective.
Just what I said before that benefiting the shareholders is a result of making the company more profitable.
Quote:
Originally Posted by mstone
I looked around for a few minutes but all I could find that was even close was:
1998 in the midst of IBM's sweeping success with the PC and overtaking Apple, Steve said to his engineers "The Mac has to be insanely great", but I don't think it was being stated with the philosophic idealism you inferred. It was basic survival at that point in time and it didn't really work out all that well for them.
Also
At Pixar he said to his animators. "Make it Great!"
WWDC 1997: "I'm a product guy. I believe if you build great products, people will respond to that. And I can tell you, we are working on some great products."
But he's said it time and time again that they want to make the best products possible and products that they want to use.
With Apple, whether there is a real or just imagined difference in why they do what they do, they are different than many of the other tech companies their products compete against. And for many investors, especially those on the Street, Apple's unwillingness to play by the rules that their competition did (as far as dividends go), has kept Apple from their investment graces.
I'm sure it wasn't just Steve making the decision to build their war chest - and it was a critical thing to do, to enable them to make advanced purchases and investment in technology that pushed them ahead with both the iPhone and iPad.
But at some point (that point being today), sitting on all that cash stops making financial sense. Paying dividends and stock buy back will give the Street what they want and at this point, baring some disaster with the iPad, iPhone, Apple Television, MacBook's, iTunes, etc, chances are pretty great that we'll be having the conversation again that they've got too much cash on hand and either they will need to pay greater dividends, make some strategic acquisitions or perhaps buy into manufacturing.
Holding out this long may have the effect of even faster growth and higher share value, given they will clearly be on more investor's buy list.
What kind of bizarre logic is that? Was he elected God-emperor?
He was a very effective CEO, but his greatest legacy will be the team that he built - a team that could think for itself. In fact, IIRC, he encouraged Cook to think for himself rather than simply ask 'what would Steve do?'
UMMM, I'd say his greatest legacy would be turning Apple completely around. His team might be great, but if they AREN'T asking "what would Steve do?" then they are going to get off track, and away from what made Apple all that money in the first place.
It's not bizarre logic, and for you to find it as such is actually bizarre in itself.
As technology changes, you can't possibly give an example of what he would have done.
He himself said that he doesn't speculate beyond 'about five years out' because even he couldn't predict some of the things that had happened.
… Oh, that just… that's not gonna make the forums a…
The bad news: the haters get to say "THAT'S NOT WHAT STEVE WOULD HAVE DONE!" for the next five years.
The good news: the haters ONLY get to say "THAT'S NOT WHAT STEVE WOULD HAVE DONE!" for the next five years.
What are you talking about "the haters"?
Here's the bad news: You're a deluded _____ who wants to argue for the sake of arguing. Notice how you conveniently left out my last sentence that would blow a COMPLETE hole in the argument you're trying to present here?
Let me get it for you so you don't forget: "On the other hand, he wasn't a banker and either am I, so... "
So I'm not sitting here bashing Apple, or bashing Cook. All I'm saying is this is going against something Steve Jobs would have done, and I'd hate to see Apple make that a habit. I'm also admitting Jobs could have been wrong on this one as a result of not being a total expert on the details.
Jesus Christ man, just ____ off. You're such a god ____ troll it's unbelievable. Get a life
It hasn't even been a year since Steve Jobs passed away, and already they are going against his will.
Steve Jobs is why they have that close to $100 billion in the first place. They should be doing everything he would have done.
On the other hand, he wasn't a banker and either am I, so...
Where is your proof that this isn't what Steve would have done? Perhaps Steve was waiting to see how the iPad sales were shaping up after the 3rd generation (I think it could be Apple's most profitable arm in a couple years) and/or for Apple to reach a point that they could feasibly do a buyback and dividend without risking the cash cushion they have built up.
The point of the "war chest" is to have cash when you need it and this comparatively paltry payout will continue to grow that "war chest" and increase the stock value.
I think it's more likely that Jobs is the one that initiated the effort to determine when it would most valuable to the company to do a buyback, dividend and stock split.
What kind of bizarre logic is that? Was he elected God-emperor?
He was a very effective CEO, but his greatest legacy will be the team that he built - a team that could think for itself. In fact, IIRC, he encouraged Cook to think for himself rather than simply ask 'what would Steve do?'
You are correct jragosta, Jobs built a deep bench.
But I'm assuming you are not happy with their decision to issue a dividend?
You have been pretty outspoken with you negative thoughts on a dividend. You have compared AAPL to MSFT on more then one occasion, are you going to sell your AAPL shares now?
Comments
Perhaps in a pure, capitalist sense, that is true. But what I think Apple realizes is that their one and only responsibility is to make "insanely great" products. If you make products that are insanely great, and delight and wonder people, chances are the rest (money for shareholders) will follow.
Once a company becomes public, it does not matter what they do to earn money so long as they do. The 'insanely great' part is just a marketing concept, which helps them earn money. Why do you think they always try to drive the price of the components to absolute rock bottom and make compromises to do that? To earn more money. Plain and simple.
That last part is what many seem to be missing in the reports I'm reading. Many are claiming this shows Apple think they have stopped growing and they will deplete their reserves. I think you are dead right, the war chest will still grow with a slight lowering of the incline in the graph, that's all.
Apple is going to spend $15 billion per year but how much are they going to profit each year for the next 3 years? There profit for CY2011 is as follows: $5.99 billion, $7.31 billion $6.62 billion $13.06 billion, for a total of $32.98 billion. That's net profit!
Even if we were to foolishly assume Apple's profit will be flat for that next 3 years their "war chest" would see a growth of $98.94 billion - $45 billion for a net increase of $53.94 for a total around $165 billion.
But let's be realistic, Apple is growing and will continue to grow rapidly even if you use a conservative measure.
Pretty much the same thing. Shareholder wealth is proportionate to company value. If you were to do as Mr. Dell once proposed, sell it and give the money back to the shareholders that is what you would hope to get. Your share of the actual value of the company. That is what happens in mergers and acquisitions, theoretically.
I think they are very distinct.
Perhaps in a pure, capitalist sense, that is true. But what I think Apple realizes is that their one and only responsibility is to make "insanely great" products. If you make products that are insanely great, and delight and wonder people, chances are the rest (money for shareholders) will follow.
Tech companies that are too focused on making money for shareholders squander their assets and consumer goodwill by relentlessly focusing on the bottom line. They make ill-advised purchases of other companies and let their corporate board drive the company, all the while only looking at the next earnings statement. Perhaps the greatest example of this is HP, which is a total trainwreck of a company I have lost all respect for. Everything they make that I have touched recently, you can feel that drive to make money for the shareholders.
I think Steve Jobs would agree 100%. If he wanted to have done a dividend, he would have done it by now.
He always said the main purpose of Apple was to make insanely great products. (Sorry for the redundancy). The profit was always secondary. It was never about money to him.
I work for a company in a shrinking marketplace, and cut-throat competition, with shrinking profit margins. What is our strategy? We're chancing high profit margins. Which means we will eventually become extinct.
I guess my point is, we need to ask ourselves, what would Steve do? Even though he said for us to NEVER to do that......
Typing this on my rocking iPad 3 BTW. Love it.
I think Steve Jobs would agree 100%. If he wanted to have done a dividend, he would have done it by now.
He always said the main purpose of Apple was to make insanely great products. (Sorry for the redundancy). The profit was always secondary. It was never about money to him.
Really? Please point me to the link for reference on that SJ quote that he always said.
One thing that was part of Steve's genius is that he personally had a passion for the work he was doing, but at the same time he understood that his primary fiduciary responsibility as CEO was to do what was best to ensure the company's success financially as well.
It was not his personal purpose to earn money for himself by working at Apple but it is actually against the law for him not to act in accordance with reasonable expectations in a responsible manner since he was serving at the pleasure of the BOD and the primary reason they asked him to serve is to make Apple successful financially not just to win a popularity contest.
I think they are very distinct.
My understanding is limited in these areas so I would be interested to learn from your perspective.
Let me officially register my dissatisfaction ith this decision.
The AI rumor forum has duly noted your dissatisfaction and it is officially registered.
Really? Please point me to the link for reference on that SJ quote that he always said.
One thing that was part of Steve's genius is that he personally had a passion for the work he was doing, but at the same time he understood that his primary fiduciary responsibility as CEO was to do what was best to ensure the company's success financially as well.
It was not his personal purpose to earn money for himself by working at Apple but it is actually against the law for him not to act in accordance with reasonable expectations in a responsible manner since he was serving at the pleasure of the BOD and the primary reason they asked him to serve is to make Apple successful financially not just to win a popularity contest.
It would take a while to find it.
Perhaps it's in the isaacson biography.
It would take a while to find it.
Perhaps it's in the isaacson biography.
I looked around for a few minutes but all I could find that was even close was:
1998 in the midst of IBM's sweeping success with the PC and overtaking Apple, Steve said to his engineers "The Mac has to be insanely great", but I don't think it was being stated with the philosophic idealism you inferred. It was basic survival at that point in time and it didn't really work out all that well for them.
Also
At Pixar he said to his animators. "Make it Great!"
Steve Jobs is why they have that close to $100 billion in the first place. They should be doing everything he would have done.
On the other hand, he wasn't a banker and either am I, so...
It hasn't even been a year since Steve Jobs passed away, and already they are going against his will.
Steve Jobs is why they have that close to $100 billion in the first place. They should be doing everything he would have done.
On the other hand, he wasn't a banker and either am I, so...
What kind of bizarre logic is that? Was he elected God-emperor?
He was a very effective CEO, but his greatest legacy will be the team that he built - a team that could think for itself. In fact, IIRC, he encouraged Cook to think for himself rather than simply ask 'what would Steve do?'
My understanding is limited in these areas so I would be interested to learn from your perspective.
Just what I said before that benefiting the shareholders is a result of making the company more profitable.
I looked around for a few minutes but all I could find that was even close was:
1998 in the midst of IBM's sweeping success with the PC and overtaking Apple, Steve said to his engineers "The Mac has to be insanely great", but I don't think it was being stated with the philosophic idealism you inferred. It was basic survival at that point in time and it didn't really work out all that well for them.
Also
At Pixar he said to his animators. "Make it Great!"
WWDC 1997: "I'm a product guy. I believe if you build great products, people will respond to that. And I can tell you, we are working on some great products."
But he's said it time and time again that they want to make the best products possible and products that they want to use.
I'm sure it wasn't just Steve making the decision to build their war chest - and it was a critical thing to do, to enable them to make advanced purchases and investment in technology that pushed them ahead with both the iPhone and iPad.
But at some point (that point being today), sitting on all that cash stops making financial sense. Paying dividends and stock buy back will give the Street what they want and at this point, baring some disaster with the iPad, iPhone, Apple Television, MacBook's, iTunes, etc, chances are pretty great that we'll be having the conversation again that they've got too much cash on hand and either they will need to pay greater dividends, make some strategic acquisitions or perhaps buy into manufacturing.
Holding out this long may have the effect of even faster growth and higher share value, given they will clearly be on more investor's buy list.
It hasn't even been a year since Steve Jobs passed away, and already they are going against his will.
Yep, because it's certainly law.
Steve Jobs is why they have that close to $100 billion in the first place. They should be doing everything he would have done.
As technology changes, you can't possibly give an example of what he would have done.
He himself said that he doesn't speculate beyond 'about five years out' because even he couldn't predict some of the things that had happened.
? Oh, that just? that's not gonna make the forums a?
The bad news: the haters get to say "THAT'S NOT WHAT STEVE WOULD HAVE DONE!" for the next five years.
The good news: the haters ONLY get to say "THAT'S NOT WHAT STEVE WOULD HAVE DONE!" for the next five years.
What kind of bizarre logic is that? Was he elected God-emperor?
He was a very effective CEO, but his greatest legacy will be the team that he built - a team that could think for itself. In fact, IIRC, he encouraged Cook to think for himself rather than simply ask 'what would Steve do?'
UMMM, I'd say his greatest legacy would be turning Apple completely around. His team might be great, but if they AREN'T asking "what would Steve do?" then they are going to get off track, and away from what made Apple all that money in the first place.
It's not bizarre logic, and for you to find it as such is actually bizarre in itself.
Yep, because it's certainly law.
As technology changes, you can't possibly give an example of what he would have done.
He himself said that he doesn't speculate beyond 'about five years out' because even he couldn't predict some of the things that had happened.
… Oh, that just… that's not gonna make the forums a…
The bad news: the haters get to say "THAT'S NOT WHAT STEVE WOULD HAVE DONE!" for the next five years.
The good news: the haters ONLY get to say "THAT'S NOT WHAT STEVE WOULD HAVE DONE!" for the next five years.
What are you talking about "the haters"?
Here's the bad news: You're a deluded _____ who wants to argue for the sake of arguing. Notice how you conveniently left out my last sentence that would blow a COMPLETE hole in the argument you're trying to present here?
Let me get it for you so you don't forget: "On the other hand, he wasn't a banker and either am I, so... "
So I'm not sitting here bashing Apple, or bashing Cook. All I'm saying is this is going against something Steve Jobs would have done, and I'd hate to see Apple make that a habit. I'm also admitting Jobs could have been wrong on this one as a result of not being a total expert on the details.
Jesus Christ man, just ____ off. You're such a god ____ troll it's unbelievable. Get a life
It hasn't even been a year since Steve Jobs passed away, and already they are going against his will.
Steve Jobs is why they have that close to $100 billion in the first place. They should be doing everything he would have done.
On the other hand, he wasn't a banker and either am I, so...
Where is your proof that this isn't what Steve would have done? Perhaps Steve was waiting to see how the iPad sales were shaping up after the 3rd generation (I think it could be Apple's most profitable arm in a couple years) and/or for Apple to reach a point that they could feasibly do a buyback and dividend without risking the cash cushion they have built up.
The point of the "war chest" is to have cash when you need it and this comparatively paltry payout will continue to grow that "war chest" and increase the stock value.
I think it's more likely that Jobs is the one that initiated the effort to determine when it would most valuable to the company to do a buyback, dividend and stock split.
What kind of bizarre logic is that? Was he elected God-emperor?
He was a very effective CEO, but his greatest legacy will be the team that he built - a team that could think for itself. In fact, IIRC, he encouraged Cook to think for himself rather than simply ask 'what would Steve do?'
You are correct jragosta, Jobs built a deep bench.
But I'm assuming you are not happy with their decision to issue a dividend?
You have been pretty outspoken with you negative thoughts on a dividend. You have compared AAPL to MSFT on more then one occasion, are you going to sell your AAPL shares now?
I don't think some underscores prevent that from being a personal attack.