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Apple execs are 'actively discussing' what to do with nearly $100B cash hoard

post #1 of 119
Thread Starter 
Apple's stockpile of cash and reserves grew another $16 billion in the holiday quarter, reaching $97.6 billion, as executives hinted they are considering big plans with their money, even though they aren't in a hurry to spend it.

The tenth of a trillion dollars in cash held by Apple was up from the $81.6 billion the company had amassed at the end of its September quarter. On Tuesday's quarterly earnings conference call, Apple Chief Financial Officer Peter Oppenheimer addressed the issue before analysts could even ask about it during the open question-and-answer session.

"We're actively discussing uses of our cash balance, and have no specifics to share," Oppenheimer said. "In the meantime, we continue to be disciplined with cash, and are not letting it burn a hole in our pockets."

The massive sum accrued over the holidays means Apple added a total of $38 billion to its short-term and long-term marketable securities in the last calendar year, Of the nearly $100 billion Apple has in cash, about $64 billion of it was being held offshore at the end of the quarter, Oppenheimer said.

"We have always discussed, internally with the management team and with our board, our cash," he said. "We recognize that the cash is growing for all of the right reasons. And I would characterize our discussions today as actiive as what makes the most sense to do."


The growth trajectory of Apple's cash hoard, via Asymco.


Oppenheimer was then asked by Bernstein Research analyst Toni Sacconaghi whether there is a timeframe for using the cash or when Apple might reveal details to investors.

"When we have something to announce, Tony, we will announce it," Oppenheimer said. "But I want to say again, we are actively discussing the best uses of our cash balance."

One relatively small use of Apple's cash came last quarter, when the company bought flash memory maker Anobit for a rumored price of $400 million. Apple Chief Executive Tim Cook confirmed and spoke about that strategic acquisition on Tuesday, stating: "Anobit has fantastic technical talent. We're really fortunate to have them join us."
post #2 of 119
hire 10 people so we can finally get resolution independence for os x.
post #3 of 119
Buy Dell. Shut it down. Give the money back to the shareholders.

Buy Samsung. Shut it down. Keep the money.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply
post #4 of 119
how about bringing it home and paying their taxes
post #5 of 119
Buy Greece?
post #6 of 119
I hope Apple doesn't feel the need to spend their cash or give it to shareholders. Apple could be struggling financially 10-20 years from now. Or maybe not. You never know what the future holds.

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post #7 of 119
Quote:
Originally Posted by kresh View Post

how about bringing it home and paying their taxes

Not to be TOO snarky here . . .but Apple already pays a crap load more taxes that GE does (which it doesn't).
post #8 of 119
Buy a pony!
post #9 of 119
Quote:
Originally Posted by VinitaBoy View Post

Not to be TOO snarky here . . .but Apple already pays a crap load more taxes that GE does (which it doesn't).

both should do the right thing, two wrongs never make a right [sorry for the punctuation, my wireless keyboard stopped working and i am having to use the on-screen keyboard]
post #10 of 119
I don't know why this is considered news. I am quite certain that this topic is ALWAYS being "actively discussed." And Apple has said so before, many times, if memory serves.

As a shareholder, and despite the hobby horses of buybacks and dividends on the part of a couple of analysts, I really hope Apple will keep their eye(s) on the ball and only do these things if they are the only way to "maximize shareholder value."

I think strategic acquisitions and part supply deals are much better uses for these funds than "instant gratification" of buybacks or dividends.
post #11 of 119
1. Save up all the money.
2. Buy Earth.
3. Start Federation of Planets.
post #12 of 119
Quote:
Originally Posted by Tallest Skil View Post

Buy Dell. Shut it down. Give the money back to the shareholders.

Buy Samsung. Shut it down. Keep the money.


Yes, we all know you hate Samsung. Just remember their revenue alone is over 250 billion with assets close to a half trillion. Even the electronics division alone makes 20% more than Apple even has in cash annually.

All for putting Dell out of its misery though.
I'm not a pessimist. I'm an optimist, with experience.
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I'm not a pessimist. I'm an optimist, with experience.
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post #13 of 119
Quote:
Originally Posted by kimgh View Post

I don't know why this is considered news. I am quite certain that this topic is ALWAYS being "actively discussed." And Apple has said so before, many times, if memory serves.

As a shareholder, and despite the hobby horses of buybacks and dividends on the part of a couple of analysts, I really hope Apple will keep their eye(s) on the ball and only do these things if they are the only way to "maximize shareholder value."

I think strategic acquisitions and part supply deals are much better uses for these funds than "instant gratification" of buybacks or dividends.

Agreed.

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post #14 of 119
Quote:
Originally Posted by kresh View Post

how about bringing it home and paying their taxes

It is my understanding that all revenue Apple makes overseas is taxed at the rate based on the country the revenue was made in. So they already paid their taxes. Because Apple does not want to pay more taxes on top of what was already paid by the country of origin, they are keeping that money overseas. I'd do the same thing.

So what problem do you have? Oh right... they should pay even more taxes simply to deposit it into a US bank and spend that money in the US right?

Because the amount they are paying in taxes already is not enough right?
post #15 of 119
Buy a time machine (a real one) and bring Steve back.
post #16 of 119
Quote:
Originally Posted by AppleGreen View Post

Buy a time machine (a real one) and bring Steve back.


I concur!
Quote:
My job is NOT to be easy on people. My job is to take these great people we have and to push them and make them even BETTER.

--Steve Jobs on being a CEO
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Quote:
My job is NOT to be easy on people. My job is to take these great people we have and to push them and make them even BETTER.

--Steve Jobs on being a CEO
Reply
post #17 of 119
On the tax issue, it rather dents the argument that allowing a tax holiday to allow them to repatriate money held offshore so they could spend it in the US, when Apple have ~$34bn in the US that they aren't doing anything with.

I say they should give a large chunk of it to their employees. Money going into the hand of people who will spend it (as opposed to giving amounts to execs that can't possibly spend it all) would help the economy.
post #18 of 119
I still remember when Apple had only $4 billion when Jobs returned to Apple and all the Microsoft fanboys were just waiting for Apple to run out of cash and sell itself to Sun. I'm sure Apple still remembers those days too.
post #19 of 119
Quote:
Originally Posted by kimgh View Post

I don't know why this is considered news. I am quite certain that this topic is ALWAYS being "actively discussed." And Apple has said so before, many times, if memory serves.

As a shareholder, and despite the hobby horses of buybacks and dividends on the part of a couple of analysts, I really hope Apple will keep their eye(s) on the ball and only do these things if they are the only way to "maximize shareholder value."

I think strategic acquisitions and part supply deals are much better uses for these funds than "instant gratification" of buybacks or dividends.

I agree with your points in general. There is an argument for declaring a dividend, however, in that there are several large mutual funds which are prohibited from owning AAPL, since they are chartered to only buy dividend-paying stocks. Since many non-dividend restricted funds already hold the maximum percentage of AAPL that they are allowed by their own diversification rules, the number of large buyers is limited. (If the $30/share bump in the after market holds, some funds may be required to sell some AAPL tomorrow.)

I am starting to be persuaded that the best source of potential increased buying pressure for AAPL, and thus increased share price, is among dividend stock funds.
post #20 of 119
I used to think that Apple should buy (or build) their own hardware manufacturing facilities. Just to lower their component costs even further. For example, they're the largest consumer of flash memory in the world, and thus get the best deals. But buying or building memory manufacturing facilities would help them lower their costs even more.

Then I realized that buying components on the open market puts price pressure on all smaller buyers. Apple buys the most flash memory, they get the best deals, and everyone else has to out-bid each other for the rest of the world's flash memory production. Apple can and will apply the same pressure with other components (touch screens, SoCs, batteries, etc.)

So by paying just a little more for their components, and not manufacturing those components themselves, Apple benefits more than they would by trimming their costs by making their own components. According to game theory, if you can pay a small cost that forces your opponent(s) to pay a larger cost, you benefit and they lose.

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post #21 of 119
Quote:
Originally Posted by kimgh View Post


I think strategic acquisitions and part supply deals are much better uses for these funds than "instant gratification" of buybacks or dividends.

Sure. Sounds good. Except, Apple is already doing that. And they still added $35 billion to their pile...

I don't think some reasonable stock buy back (if share prices ever fall again) or dividend disbursement precludes them from also following your advice...

Besides, whether you think it is fair or not, Apple's cash pile will become a political football if it grows like this for another year or two...
Progress is a comfortable disease
--e.e.c.
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Progress is a comfortable disease
--e.e.c.
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post #22 of 119
Lower the price of iPads enough to really get the Android tablet maker’s goat. Now that would be mean. Fun, but mean.

Regarding Apple cash overseas; anyone know how Apple pays for overseas parts? Would paying for them from overseas coffers be the way to whittle down those accounts without generating taxes back home?

Back to the iPad, what about bringing out a modified iPad for the education market and sell it next to cost as Amazon does with its fire sale. Like fighting fire with fire. Excuse used? Same as Amazon’s: “profits to come from book sales". The hardest part would be for Tim to advance this possibility with a straight face. (Well, maybe not so difficult for Tim.)

When I find time to rewrite the laws of Physics, there'll Finally be some changes made round here!

I am not crazy! Three out of five court appointed psychiatrists said so.

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When I find time to rewrite the laws of Physics, there'll Finally be some changes made round here!

I am not crazy! Three out of five court appointed psychiatrists said so.

Reply
post #23 of 119
Ummm... move jobs back to the US and build the iPhone here?

The fact that they employ Sinclair Jungle-esque slave labor camps in China sickens me.
post #24 of 119
Quote:
Originally Posted by cdub View Post

Ummm... move jobs back to the US and build the iPhone here?

The fact that they employ Sinclair Jungle-esque slave labor camps in China sickens me.

One post.

Bringing up this nonsense (that will never ever happen) again.

Uh huh.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply
post #25 of 119
Quote:
Originally Posted by Tallest Skil View Post

One post.

Bringing up this nonsense (that will never ever happen) again.

Uh huh.

Nonsense? I think not.

http://www.telegraph.co.uk/finance/c...e-factory.html

http://www.dailykos.com/story/2012/0...his-On?via=tag
post #26 of 119
Rocket Packs. Build Rocket Packs. Or flying cars. Yeah that's it, flying cars.
post #27 of 119
Quote:
Originally Posted by kimgh View Post

I don't know why this is considered news. I am quite certain that this topic is ALWAYS being "actively discussed." And Apple has said so before, many times, if memory serves.

As a shareholder, and despite the hobby horses of buybacks and dividends on the part of a couple of analysts, I really hope Apple will keep their eye(s) on the ball and only do these things if they are the only way to "maximize shareholder value."

I think strategic acquisitions and part supply deals are much better uses for these funds than "instant gratification" of buybacks or dividends.

Agree. They seem to have succeeded rather astoundingly at both giving shareholders healthy return and taking over markets, all while amassing a horde of cash. And that strategy is a mistake because . . . ?
A.k.a. AppleHead on other forums.
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A.k.a. AppleHead on other forums.
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post #28 of 119
Quote:
Originally Posted by Tallest Skil View Post

One post.

Bringing up this nonsense (that will never ever happen) again.

Uh huh.

Because the more you post, the more valid your posts?
post #29 of 119
Quote:
Originally Posted by myapplelove View Post

hire 10 people so we can finally get resolution independence for os x.


I thought that had been ditched.

I think what we will see is what happened with iOS, Retina displays.
post #30 of 119
Quote:
Originally Posted by cdub View Post

Ummm... move jobs back to the US and build the iPhone here?

The fact that they employ Sinclair Jungle-esque slave labor camps in China sickens me.

Don't worry, China will get its comeuppance. They have a history of workers rising up. One way or another.
A.k.a. AppleHead on other forums.
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A.k.a. AppleHead on other forums.
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post #31 of 119
Soon... Google will be within Apple's sites.

Since Google doesn't officially compete with Apple it would have no problem passing regulations.

na na na na na...
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na na na na na...
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post #32 of 119
Quote:
Originally Posted by sflocal View Post

It is my understanding that all revenue Apple makes overseas is taxed at the rate based on the country the revenue was made in. So they already paid their taxes. Because Apple does not want to pay more taxes on top of what was already paid by the country of origin, they are keeping that money overseas. I'd do the same thing.

So what problem do you have? Oh right... they should pay even more taxes simply to deposit it into a US bank and spend that money in the US right?

Because the amount they are paying in taxes already is not enough right?

No...I don't think that's correct. I think you get to deduct the taxes that you paid overseas when you bring the money home. Any tax experts here?
post #33 of 119
since it doeans't make much sense to bring it into the USA and buying HTC or Samsung - thats stupid stupid and would not be allowed, the next best thing might be to spend some of it buying spectrum. Getting the iPad out from under carriers around the world and creating an Apple network for their devices. I'd start with the UK. Also buy up content for the Apple TV and Apple HDTV. Trouble is a lot of this content is owned by US companies. Sony has a lot of it though.

Also going after rights to soccer, sport and so on would really add to the allure of iOS and put pressure on Netflix, Hulu etc as well

Imagine Apple having the exclusive rights to most of NBA, Golf, The Masters, World Tennis Grand slam, English soccer, Formula One. The list is endless and thats mainly the English market, what about South America and Asia. Most of these wouldn't cost more than couple of billion each for multi year deals and they could make money back by selling through iTunes.

Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

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Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

Reply
post #34 of 119
Quote:
Originally Posted by VinitaBoy View Post

Not to be TOO snarky here . . .but Apple already pays a crap load more taxes that GE does (which it doesn't).

Obama would say Apple is making way, way too much and not paying enough and that GE needs to pay their fair share... that is, in a perfect world. Gotta spread the wealth you know. And who better than "The One"!

Regarding what Apple should do with the 100B cash hoard. Hold onto it very tightly. Obama might win a second term and with no worries of having to get reelected... Look out!
/
/
/

Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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post #35 of 119
Quote:
Originally Posted by cpr1 View Post

Because the more you post, the more valid your posts?

No, because potential throwaway accounts designed to intentionally derail threads when we have perfectly good arguments going on about this stuff in other threads aren't welcomed here.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply
post #36 of 119
Quote:
Originally Posted by Rot'nApple View Post

Obama would say Apple is making way, way too much and not paying enough and that GE needs to pay their fair share... that is, in a perfect world. Gotta spread the wealth you know. And who better than "The One"!

Regarding what Apple should do with the 100B cash hoard. Hold onto it very tightly. Obama might win a second term and with no worries of having to get reelected... Look out!
/
/
/

Is there an equivalent to Godwins Law if someone blatantly brings politics into a thread?
na na na na na...
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na na na na na...
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post #37 of 119
Quote:
Originally Posted by kimgh View Post

I don't know why this is considered news. I am quite certain that this topic is ALWAYS being "actively discussed." And Apple has said so before, many times, if memory serves.

I agree and disagree. I've listened to the last few of these and today there seemed to be a lot more energy and emphasis on the use of Apple's cash "being actively discussed." Listen to the tone of voice - I heard excitement in Tim's voice when talking about (I think specifically) aquisitions. Do others agree?

Macintosh 512Ke.......

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Macintosh 512Ke.......

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post #38 of 119
Quote:
Originally Posted by AppleGreen View Post

Buy a time machine (a real one) and bring Steve back.

Buy one?
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #39 of 119
Quote:
Originally Posted by island hermit View Post

Is there an equivalent to Godwins Law if someone blatantly brings politics into a thread?

Kennedys' Law, perhaps?

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply
post #40 of 119
Seriously, Apple should buy RIM so that it can enter Enterprise market. RIM is valuable because of its private eMail exchange network and the security it provides.

Apple should launch an Enterprise Sales Division - selling business management solution using the same hardware - iPad, iPhone, and Mac.

RIM is very cheap now.
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