Steve Jobs says Apple must 'think big' with $40 billion in cash

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  • Reply 281 of 323
    jeffdmjeffdm Posts: 12,951member
    Quote:
    Originally Posted by jfanning View Post


    Getting back to the original discussion, melgross claimed Apple developed all their products by themselves,



    While I don't think he was correct in what he said, he didn't say that exactly. I agree with your contention on this issue, several of the products in question were functional shipping products, SoundJam and Final Cut come to mind. Color was a very non-Apple app when Apple released it in the previous version, it used a lot of odd monospaced fonts and used a bizarre file open/save dialog box that doesn't belong in a Mac program, it looked more like something from the X11 Motif toolkit. Going by some of the images on the Apple site, Color still uses monospaced fonts.



    Quote:

    Also, I am lost at what you are trying to say, as I mentioned in a list of some technologies Apple purchased, NeXT was one of them, FineTines claimed I didn't mention that Steve Jobs founded it (I am still at a lost as to why this is relevant, infact I don't see why the message he posted is relevant at all), posted to state it was a tecnology they purchase, Steve didn't give it away freely (it wasn't his to give), he was paid in shares for it, so to finish this novel up, Apple purchased NeXT, they purchased the technology NeXT developed, it is once again another example of Apple purchasing technologies and not developing them.



    The part that I thought was odd was that you yelled at FineTines because you thought that FineTines said that NeXT wasn't purchased, when he said it was. Was that really that hard to understand?
  • Reply 282 of 323
    vineavinea Posts: 5,585member
    Quote:
    Originally Posted by solipsism View Post


    I see WiMAX as nothing but a money pit. There is a reason why UMB was dropped and most everyone is moving to LTE. Sprint invested heavily in WiMAX too soon and now it looks like they hve to push it forward but I think they should just cut their loses now and go to LTE if they want to have a chance of surviving in the future, though I don't see anything that could save them at this point.



    WiMAX might actually turn out to be the backhaul for LTE towers. It was designed to be for backhaul and it's pretty good at it. Amusingly, there has been discussion about blending WiMAX and LTE with 802.16m being a Time Division Multiplex version of LTE advanced. That strikes me as highly unlikely.



    Even as a consumer 4G technology WiMAX works pretty well. I was getting 4 Mbps in an area outside the coverage maps.



    The point is that with 40B in the bank, Apple could do what Google is doing to terrestrial ISPs to the wireless ones. Not compete as a cell provider as much as saying "with VOIP on fast wireless networks you better start getting your heads out of your asses and not screw around with making data over LTE annoying for us...we can buy Sprint and Clear if we want to and use WiMAX as a game changer in ways Sprint would never do and I bet we could get Intel and Google to help"



    Lenovo showed WiMAX enabled ThinkPad Edge notebooks at CES. There were also dual mode GSM/WiMAX devices. So I don't think WiMAX is dead yet.



    I'm thinking Sprint Overdrive...there's no data cap on 4G at the moment.



    http://nextelonline.nextel.com/en/st...ge_popup.shtml



    I think my wife might get annoyed with me if I take the internet away with me on trips though.
  • Reply 283 of 323
    vineavinea Posts: 5,585member
    Quote:
    Originally Posted by solipsism View Post


    1) That would kill their business since the prices would skyrocket.



    2) Consumers would go to other companies with considerably cheaper prices for the basic tool.



    3) The lack of work would mean unemployment therefore a loss of income therefore hungry families.



    Well...not if he created automated factories.



    Frankly though...I think that's too limiting for Apple. Easier to retool a human factory than a robotic one I think. Perhaps I'm wrong but humans are more flexible than machines.
  • Reply 284 of 323
    Quote:
    Originally Posted by solipsism View Post


    1) That would kill their business since the prices would skyrocket.



    2) Consumers would go to other companies with considerably cheaper prices for the basic tool.



    3) The lack of work would mean unemployment therefore a loss of income therefore hungry families.



    Higher prices than the rest of the industry haven't hurt Apple yet. In fact, Apple's costs aren't much higher than any other company, but its profit margins are huge. Hence, the $40 billion in cash we're here talking about. Cut into that profit margin a bit- that's where the forty bill comes in- and the prices won't have to move one inch.



    Steve wants to "think big" and spend that money in a way that will make a difference? Then why not make a huge statement about human rights, stop supporting an evil dictatorship, and fight an economic downturn by employing people closer to home, all in one action?



    Say it with me:



    "Designed and made by Apple in California"



    Hell. Apple's sales will go up.
  • Reply 285 of 323
    finetunesfinetunes Posts: 2,065member
    Quote:
    Originally Posted by jfanning View Post


    I don't know why I bother replying to you, but from that post we have the proof that you are suffering from a serious medical condition, and I feel it is important that we continue to let you integrate into society.



    You really don't have to make these types of comments--If you don't agree with someone or if you don't like this forum you can leave or you can put those with whom you don't get along on your ignore list.
  • Reply 286 of 323
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by FuturePastNow View Post


    Higher prices than the rest of the industry haven't hurt Apple yet. In fact, Apple's costs aren't much higher than any other company, but its profit margins are huge. Hence, the $40 billion in cash we're here talking about. Cut into that profit margin a bit- that's where the forty bill comes in- and the prices won't have to move one inch.



    Steve wants to "think big" and spend that money in a way that will make a difference? Then why not make a huge statement about human rights, stop supporting an evil dictatorship, and fight an economic downturn by employing people closer to home, all in one action?



    Say it with me:



    "Designed and made by Apple in California"



    Hell. Apple's sales will go up.



    We're not talking about a few percentage on the profit margin, we're talking about excessively high costs.



    Just because Apple's cheapest notebook is $1000 doesn't mean you compare it to the cheapest machine from Dell at $400. Apple's prices aren't excessive when you compare to the same essential system from another vendor.



    if you can figure out a way to make it work you'll be a billionaire, but the reason companies use countries like China is because of excessive cost savings.
  • Reply 287 of 323
    finetunesfinetunes Posts: 2,065member
    Quote:
    Originally Posted by jfanning View Post


    I forgot that Steve gave NeXT to Apple for no money at all, oh that's right, he didn't, they purchased it. Remember Steve != Apple



    I see that several other members have made corrected you on what I said, so I won't say anything more about your mis-statement.
  • Reply 288 of 323
    finetunesfinetunes Posts: 2,065member
    Quote:
    Originally Posted by jfanning View Post


    I didn't neglect anything though, Apple wanted Steve, they wanted NeXT, they purchased them. Apple didn't develop the NeXT technologies, NeXT did, the fact that Steve was one fo the founders is not relevant



    You are splitting hairs here. Does it really matter whether Apple brought Jobs back and bought NeXT?
  • Reply 289 of 323
    jfanningjfanning Posts: 3,398member
    Quote:
    Originally Posted by FineTunes View Post


    You are splitting hairs here. Does it really matter whether Apple brought Jobs back and bought NeXT?



    Yes it does, but as I originally said I didn't care that they purchased NeXT, the fact is they did purchase NeXT and based products on their technologies
  • Reply 290 of 323
    jfanningjfanning Posts: 3,398member
    Quote:
    Originally Posted by JeffDM View Post


    The part that I thought was odd was that you yelled at FineTines because you thought that FineTines said that NeXT wasn't purchased, when he said it was. Was that really that hard to understand?



    This part you have misunderstood (or I didn't say it clearly enough), that is not what I intended, sorry if you got that impression. The point I was trying to get across was that Apple purchased them, which aids my original arguement that Apples routinely purchases technologies.
  • Reply 291 of 323
    jfanningjfanning Posts: 3,398member
    replied twice.
  • Reply 292 of 323
    carmissimocarmissimo Posts: 837member
    Quote:
    Originally Posted by Dr Millmoss View Post


    I agree with your $.02 and raise you $.05. All of this hemming and hawing we get from Steve about what Apple plans to do with the money does not inspire confidence. Apple needs a massive security blanket? Why, Steve, why? Apple's management has done such a brilliant job over the past 7-8 years. I wish they'd remove this blot on their reputation by coming clean with the stockholders.



    To me this is about not having faith in outside sources. Banks have proven far less reliable than many had anticipated. And chip suppliers like Intel an IBM are not much better.



    If you have your own supply of cash, it's simply moronic to give that up and rely instead on the amoral folks running our financial institutions. And if Intel is more into crushing competitors like nVidia than it is helping partners like Apple achieve their design goals, why not do your own thing, as Apple has decided to do with the iPad.



    Look, if your Jobs, you can't publicly declare that you're keeping the cash to save yourself from the idiocy of partners like major banking institutions and Intel. You have to make a vague comment that conveys the fact that you're not going to provide dividends or stock buybacks yet do intend to put the cash reserve to good use. That good use includes making your own processors and ensuring that no matter what happens to the banking sector, your business is recession-proof.



    As a long-time Apple shareholder I have to say that Apple's cash reserve gives me reason to feel better about continuing to hold Apple shares, not worse. The fact is that I believe sadly that there are a lot of idiot savants running the show in corporate America. They know how to make themselves absurdly wealthy and are clueless otherwise. Jobs isn't brilliant so much as one of a very small group of competent individuals who seem brilliant in comparison to the vast army of fools that are running the competition. If you were one of those competent folk, you'd be looking for ways to avoid depending on the others just as Jobs is doing. It's called survival.
  • Reply 293 of 323
    finetunesfinetunes Posts: 2,065member
    Quote:
    Originally Posted by jfanning View Post


    Yes it does, but as I originally said I didn't care that they purchased NeXT, the fact is they did purchase NeXT and based products on their technologies



    Maybe we can think of it this way--Apple gave back a part of the company Jobs co-founded for another company that Jobs founded. Kind of like Macintoshes for Granny Smiths. It is like Jobs was on sabbatical returning to Apple to implement what he and his crew developed when on leave at NeXT.
  • Reply 294 of 323
    finetunesfinetunes Posts: 2,065member
    Quote:
    Originally Posted by jfanning View Post


    This part you have misunderstood (or I didn't say it clearly enough), that is not what I intended, sorry if you got that impression. The point I was trying to get across was that Apple purchased them, which aids my original arguement that Apples routinely purchases technologies.



    One thing that you didn't mention where you would have been correct is that Apple didn't invent the mouse and windows environment--Xerox did. Jobs happened to stumble upon it when he visited Xerox to look at Xerox's printing technology that lead to laser printers.



    All that aside, who knows what Jobs and the Mac group would have done if they stayed at Apple and were allowed to work developing the Mac OS unfettered by the people brought in to run Apple.
  • Reply 295 of 323
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by Carmissimo View Post


    To me this is about not having faith in outside sources. Banks have proven far less reliable than many had anticipated. And chip suppliers like Intel an IBM are not much better.



    If you have your own supply of cash, it's simply moronic to give that up and rely instead on the amoral folks running our financial institutions. And if Intel is more into crushing competitors like nVidia than it is helping partners like Apple achieve their design goals, why not do your own thing, as Apple has decided to do with the iPad.



    Look, if your Jobs, you can't publicly declare that you're keeping the cash to save yourself from the idiocy of partners like major banking institutions and Intel. You have to make a vague comment that conveys the fact that you're not going to provide dividends or stock buybacks yet do intend to put the cash reserve to good use. That good use includes making your own processors and ensuring that no matter what happens to the banking sector, your business is recession-proof.



    As a long-time Apple shareholder I have to say that Apple's cash reserve gives me reason to feel better about continuing to hold Apple shares, not worse. The fact is that I believe sadly that there are a lot of idiot savants running the show in corporate America. They know how to make themselves absurdly wealthy and are clueless otherwise. Jobs isn't brilliant so much as one of a very small group of competent individuals who seem brilliant in comparison to the vast army of fools that are running the competition. If you were one of those competent folk, you'd be looking for ways to avoid depending on the others just as Jobs is doing. It's called survival.



    I don't follow your reasoning. I haven't seen anyone argue that Apple should "give up" the cash and go into debt. If you've seen someone argue that, then could you please point out who? If you are unable to identify someone advancing such an argument, then I would suggest that you have created a straw man.



    You as a stockholder should not be comforted by the huge cash reserves Apple seems to think they need, if for no other reason than they seem to think they need it. Would you like to see your AAPL shares lose half their value in one day? If Apple was unable to fund its ongoing operations without dipping into cash reserves (translation: stated losing money) then the impact on your stockholdings would be the same if they borrowed the money to cover the shortage as if they used their own reserves. The reason is, it's profits that matter to investors. It's the only thing that does matter. If capital isn't being used to grow profits, or isn't being returned to the stockholders in the form of a dividend, the it's of no earthy value to you as an investor. None.



    No, Steve's hogwash simply won't do.



    http://www.fool.com/investing/divide...nging-you.aspx
  • Reply 296 of 323
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by Dr Millmoss View Post


    This is not correct. Debt is can be a good thing. Ask anyone who owns a home. Companies borrowing to expand, provided the money is put to good use, can also be a good thing. Too much debt or debt taken on to fund operating expenses is a bad thing. But debt itself? Inherently? No, that's a major overstatement.



    Finance 101: The stockholders own a public company. It might be picturesque to suggest that treating the stockholders as if they own the company (which they do) is "slavishly pandering" to them, but of course it's simply not accurate.



    The are basically two times when debt is good, providing of course, that the debtor will have no problem paying it off in the future.



    The first is if something is needed that can't be bought with current funds.



    Two is when the interest on the debt is lower than the inflation during the period of payment.



    Otherwise, there is no real advantage to it. Companies that can self finance through cash will always be more secure than those that can't.



    Intrest payments, even after the tax advantages are figured in can make the purchase too onerous. If Apple had, let's say, $10 billion in debt, not too much for a company of its size, then even today, with the much lower interest rates due to the banking problems and recession, could easily be carrying a yearly interest load of $200 million. Possibly a good deal more. Why should they do that?



    The $48 billion deal for that Texas power company is carrying a load of $2.7 billion a year in interest. That may kill the company if gas rates remain low.



    There is no way a company can count on anything. If Apple should stumble, suddenly, that debt load becomes important. It will weigh down the stock, and increase speculation into how well the company can afford to finance R&D, marketing, etc.



    I know it's an extreme, but if we look back at Apple during the dundrums of the mid late '90's, we can see that it was good that Apple had minimal debt load. What we're seeing now at Apple's highest levels is a reflection of that.



    Quote:

    I don't think it's similar either, but that was not the point of the comparison. The point is, they are not infallible, because they are human. Apple has the means to make some very large investment decisions of potentially historical proportions, which because the company is run by mortal human beings, won't necessarily be wise ones.



    Or bad ones. Is the cup half empty, or half full?
  • Reply 297 of 323
    dr millmossdr millmoss Posts: 5,403member
    Well again, if someone is suggesting that Apple take on debt, then by all means, identify who. Not me, certainly. And as I pointed out above, if Apple had to dip into cash reserves to fund operating expenses, then man the lifeboats. That's an unmitigated disaster for investors no matter where the money comes from to staunch the losses.



    The question is not whether Apple should finance expansion with debt or their own cash. If they indeed are making large capital expenditures, then certainly doing it with their own money is preferable. The question to consider is whether they could spend anywhere close to $40 billion today (or $50 billion in a few months from now) responsibly on growth. I think they can't, and I have yet to see a scenario from anyone which illustrates how they could. Most people seem to be taken with the security blanket theory. That concept frankly scares me, possibly because I see its implications.



    FWIW, Apple actually did take on quite a lot of debt during the mid-90s.
  • Reply 298 of 323
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by jfanning View Post


    So you are still happy to claim that Apple has developed all their technologies by themselves even though there is solid proof that they haven't?



    My oh my, you just don't get it, do you?



    Quote:

    I sense you are taking things the wrong way, I haven't said that this is a bad thing, there is nothing wrong with what they have done, a lot of companies have done the same thing, and if you can use it to an advantage that is good. All I am saying is, Apple hasn't developed all of their technologies by themselves.



    We're not talking about "technologies". You've changed the argument to that because you lost the original one, which was "products".



    Very few companies develop all their own "technologies", because there are companies who specialize in those technologies. What matters is the final product produced from those technologies. And there, Apple is one of the most original. Sometimes it's far more important to see which technologies should go into a product than the technologies themselves.



    Apple didn't come up with the original idea for the scrollwheel used in the first iPod. But even though the company had the product before Apple used it, obviously, no other company saw it as an advantage, and used it. By the time Apple did, it was too late for anyone else. Many companies built Lcd's the size of the one in that first iPod, and any other company could have seen them (and no doubt did) and thought that they would be much better for a readout, but they didn't. Again, Apple did. All those other companies had software engineers who could have done what Apple did with the iPod menus and such, but none of them thought of it, though Apple did.



    There are numerous other little things that Apple did with that product that every other company making music players could have done before Apple did it, but none did.



    This is just like Apple's other products. Obviously, they aren't a manufacturer of most of the parts that went into their products, though they used to design more of the low level components than they do now. But that doesn't matter, because it's HOW those parts are selected and used that matter. And THAT'S what makes a product.



    If you look at other computers, you quickly realize that under the plastic, they're very much the same. Apple's are designed from scratch, even though many of the components are the same. After all, we really don't expect a computer manufacturer to design their own DVD recorders, or memory chips, etc.



    It's very interesting that with both the iPod and the iPhone, other manufacturers are trying to do what Apple has done, often, even to copying as close as possible, the way Apple's products look, without ever capturing the feel and usage of Apple's products. The Pre and Pixie are failures. The Nexus One so far, is a failure. The Droid, after selling a good number in the first month, is now available on Amazon for $49 with a two year contract.



    Why is that?



    It's because Apple develops its own products, and others try to copy parts of them, but don't seem to get the whole thing right.



    So Apple buys screens from one, processors from another, etc. But they do it very well, and their products are uniquely their own, because the design of the product that emerges, is better than what the competition is doing. That's because Apple is seeing further than the competition, which is frantically trying to catch up.



    So you can try to point to a few nascent products that Apple has bought before they were sold, or that were abandoned, like Macromedia's editing program that became FCP, now FCS. Even a couple that were out before Apple bought and totally changed them. Those became far better offerings after Apple go to them. Apple didn't resell what they bought. They never do. But that doesn't have anything to do with what's going on in Apple. They take these half developed chunks of code, and turn them into very evolved products which support their real game, which is to sell their home developed hardware.



    And they're doing very well at it.
  • Reply 299 of 323
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by JeffDM View Post


    While I don't think he was correct in what he said, he didn't say that exactly. I agree with your contention on this issue, several of the products in question were functional shipping products, SoundJam and Final Cut come to mind. Color was a very non-Apple app when Apple released it in the previous version, it used a lot of odd monospaced fonts and used a bizarre file open/save dialog box that doesn't belong in a Mac program, it looked more like something from the X11 Motif toolkit. Going by some of the images on the Apple site, Color still uses monospaced fonts.



    What I'm talking about, and I've been very clear in that, is that Apple never buys a product, only to ship it out the way they got it. All of their products, even the ones they did buy, and we all know the software products they bought, are extensively modified s soon as is possible. They add significant features, they redo the GUI, they lower prices. Ad they often combine them with other software for a much more sophisticated product. Normally, after a couple of revisions, the original product is hardly recognizable.



    Macromedia had abandoned their product when Apple bought it and totally redid it, naming it FCP.
  • Reply 300 of 323
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by FuturePastNow View Post


    Higher prices than the rest of the industry haven't hurt Apple yet. In fact, Apple's costs aren't much higher than any other company, but its profit margins are huge. Hence, the $40 billion in cash we're here talking about. Cut into that profit margin a bit- that's where the forty bill comes in- and the prices won't have to move one inch.



    Steve wants to "think big" and spend that money in a way that will make a difference? Then why not make a huge statement about human rights, stop supporting an evil dictatorship, and fight an economic downturn by employing people closer to home, all in one action?



    Say it with me:



    "Designed and made by Apple in California"



    Hell. Apple's sales will go up.



    It's very simple. If prices go up, then sales will go down.



    Sadly enough, unlike people from other countries, Americans have no loyalty to other people working here. Just the price matters.



    It's the fault of the consumer that so many companies now manufacture overseas.
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