GUARANTEES about Apple Computer, Inc.

Posted:
in General Discussion edited January 2014
I think some of you on these boards are diluting yourself down to ultimate disappointment. Let's set the record straight on Apple:



1) Steve Jobs is the best man to be its CEO. Deep down we all know that.



2) OS X will only keep getting better.



3) Apple makes THE most stylish computers in the world.



4) Whatever we think an Apple product should cost, it'll be at least 10% higher. Guaranteed.



5) Apple will continue to keep their products secret enough that we'll NEVER, I repeat, NEVER know exactly what's coming until it's finally released.



6) No matter how stupid you think Steve Jobs and the Apple big-wigs are, it's still a profitable company.



Anybody want to add anything else? Serious replies please.
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Comments

  • Reply 1 of 30
    torifiletorifile Posts: 4,024member
    [quote]Originally posted by CosmoNut:

    <strong>I think some of you on these boards are diluting yourself down to ultimate disappointment. Let's set the record straight on Apple:



    1) Steve Jobs is the best man to be its CEO. Deep down we all know that.



    2) OS X will only keep getting better.



    3) Apple makes THE most stylish computers in the world.



    4) Whatever we think an Apple product should cost, it'll be at least 10% higher. Guaranteed.



    5) Apple will continue to keep their products secret enough that we'll NEVER, I repeat, NEVER know exactly what's coming until it's finally released.



    6) No matter how stupid you think Steve Jobs and the Apple big-wigs are, it's still a profitable company.



    Anybody want to add anything else? Serious replies please.</strong><hr></blockquote>



    I'll only reply to #6: Apple's profitable because they have so much money in the bank. Without the interest on their $4.2bil they would not have made a profit in at least 2 of the last 4 quarters. That's a fact. So, to all these people saying "Apple has so much money! They should spend on something like [insert name of small software company here]" you need to realize that the minute Apple spends some of their stash on something, they will cease to be 'profitable.'
  • Reply 2 of 30
    [quote]Originally posted by torifile:

    <strong>

    So, to all these people saying "Apple has so much money! They should spend on something like [insert name of small software company here]" you need to realize that the minute Apple spends some of their stash on something, they will cease to be 'profitable.'</strong><hr></blockquote>



    .... unless they spend it on something that earns more profit than the interest income they lost due to that spending.
  • Reply 3 of 30
    macaddictmacaddict Posts: 1,055member
    How about Apple just forgets about computer and works on investing their cash as a public company?



  • Reply 4 of 30
    emaneman Posts: 7,204member
    [quote]Originally posted by MacAddict:

    <strong>How about Apple just forgets about computer and works on investing their cash as a public company?



    </strong><hr></blockquote>



    Yeah, great idea.
  • Reply 5 of 30
    jambojambo Posts: 3,036member
    [quote]Originally posted by MacAddict:

    <strong>How about Apple just forgets about computer and works on investing their cash as a public company?



    </strong><hr></blockquote>



    This comes from the guy who has "Long live the Mac!' in his signature <img src="graemlins/hmmm.gif" border="0" alt="[Hmmm]" />



    J :cool:
  • Reply 6 of 30
    bogiebogie Posts: 407member
    That is not accurate - Apple's profits the last several quarters were not low enough that their investments "saved" them as you say, however, one could honestly say that the fact that they do use their investments to off set slow quarters is props to Anderson for good financial management and the fact that they have that money in the bank is due to being a strong producer in the first place.
  • Reply 7 of 30
    sdw2001sdw2001 Posts: 16,990member
    [quote]Originally posted by Bogie:

    <strong>That is not accurate - Apple's profits the last several quarters were not low enough that their investments "saved" them as you say, however, one could honestly say that the fact that they do use their investments to off set slow quarters is props to Anderson for good financial management and the fact that they have that money in the bank is due to being a strong producer in the first place.</strong><hr></blockquote>



    umm...it IS accurate. In Q2 I believe it was.... they had an operational loss of 8 million. They also posted losses for the year,
  • Reply 8 of 30
    Actually, having $4.2 billion in cash is probably a negative rather than a positive. It's one thing to have a rainy-day reserve, but $4.2 billion seems a bit excessive. If they don't have any projects to spend that money on, they should either have a stock buyback or pay out $3 billion in dividends.



    Doesn't anyone else find it disconcerting that a company as technically astute as Apple can't conceive of new projects to spend that money on?
  • Reply 9 of 30
    dogcowdogcow Posts: 713member
    I really dont think we can comment one way or another about Apple's cash position, as none of us are Fred Anderson (i should hope he dosnt spend his time here).



    Anyway. Regarding your "ultimate disappointment," i dont even this it need to be ultimate. Every 6 months we all work ourselves up into a tizzy over nothing. Every 6 months Steve Jobs walks on stage and shows us the latest warez. Every 6 months people are disapointed because it didnt live up to the hype that we created ourselves. Guess what, its happening right now, as we speak....
  • Reply 10 of 30
    eugeneeugene Posts: 8,254member
    IME, nothing is guaranteed except my awareness...
  • Reply 11 of 30
    [quote]Originally posted by Mr.Potatohead:

    <strong>Actually, having $4.2 billion in cash is probably a negative rather than a positive. It's one thing to have a rainy-day reserve, but $4.2 billion seems a bit excessive. If they don't have any projects to spend that money on, they should either have a stock buyback or pay out $3 billion in dividends.



    Doesn't anyone else find it disconcerting that a company as technically astute as Apple can't conceive of new projects to spend that money on?</strong><hr></blockquote>



    However, Apple has the burden of convincing people - especially investors - constantly that they are still financially sound. Hell, they still have to convince some people they haven't gone out of business. It's also what's kept them profitable for the past two quarters, which is just as important in the world of p.r. as it is on wall street. Like Fred Anderson said, "Apple's a cash machine." Their cash is making cash. Anderson knows what he's doing. And they are dipping into the fund for some things -- most notably, the new stores.
  • Reply 12 of 30
    torifiletorifile Posts: 4,024member
    I never argued that Apple's stash has saved it. Nor did I say that Fred Anderson is a bad CFO. As a matter of fact, I'm glad someone like him is in that position; it makes me feel really secure as a stock holder. Actually, to know that Apple doesn't have to make a penny for a year and they would still be able to sustain their R&D and manufacture makes me feel really secure. So, that is the only guarantee.
  • Reply 13 of 30
    I'll float another idea in regards to why the cash reserve has ballooned from $1 bil. under Amelio to $4 bil. during Steve Jobs's tenure as CEO: poor management.



    Mr. Peabody, set the Wayback Machine for 1997. SJ comes back to the company. Sure, it's going through some tribulations in 1997, but the company has $1 bil. in the bank and virtually no debt. So what does SJ do? He starts cutting programs rather than dip into cash reserves.



    What does he cut? The Newton division, which is just starting to make a profit. Shortly thereafter, he tries to acquire Palm, which is now employing most of the former Newton development team. He could have just developed a low-end version of the Newton, and today Apple would probably own the PDA market. Why did he cut it? Two reasons, I believe: one, spite for John Sculley, and two, micromanagement issues (I'll get to that in a minute).



    What else does he cut? Claris Software (renaming it to FileMaker, Inc.). Claris was not only profitable, but they were so focused on profit that they let MacWrite die off (the app that launched the Mac); no sacred cows here. Plus you have to figure that Claris was one of the premiere developers delivering great Mac-first and Mac-only titles. Claris was very well run, and Jobs killed it. Why? Wasn't Claris also a Sculley project (or was it Spindler)? FileMaker alone survives, but the company is renamed to FileMaker, Inc, as an indicator that it will never ever sell anything but FileMaker.



    Ok, I said all that to get to this last point of why Apple is building up so much in cash reserves: Jobs does not want any part of Apple to be more than an arm's length from him. Newton was spun off at that point, wasn't it? He kills it. He kills Claris to bring software development in-house, and Claris's president immediately jumps ship. I believe the reason for the cash buildup is that Jobs wants to micromanage everything and he is not willing to entrust anyone and spin off any part of the company as a separte entity.



    Now here's the real problem... Apple is making money hand over fist, but their growth is severly limited because they are stockpiling cash rather than reinvesting it in their business. Apple can never be more than 5% of the market with this kind of thinking. Worse yet is the fact that the best hedge against future woes is not excessive cash in the bank but growing your market; I'd much rather see Apple try to rebound from 10% marketshare and $1 bil. in the bank than from 5% marketshare and $4 bil.



    Steve Jobs may have saved Apple from going under, but he has also doomed it to be a niche player. As many people are pointing out these days, Microsoft isn't in a monopoly position because they always make the right decisions but because their competitors have made some very bad ones.



    [ 12-07-2001: Message edited by: Mr.Potatohead ]</p>
  • Reply 14 of 30
    sinewavesinewave Posts: 1,074member
    You gotta love Steve bashers. I would love to have seen what Amelio would have came up with. Amelio was a computer retard. Newton was costing more than it was giving. I personally think Jobs is a ass.. but I also know we might be using PCs now if it wasn't for that asshole. Who knows. It's all speculation.
  • Reply 15 of 30
    I'm not a "Steve basher" or an "Amelio supporter" per se, I'm just trying to take a sober look at the facts. If you had read on down to the final paragraph, you'd see that I gave Jobs credit for saving the company.



    The problem is that here is a company in a growth industry and the management team is sitting around fondling $4 billion dollars in capital. Something's wrong....
  • Reply 16 of 30
    [quote]Originally posted by Mr.Potatohead:

    <strong>Something's wrong....</strong><hr></blockquote>

    OR something's terribly right!

    In the grande scheme of things, who here knows? There could be some bigger, more top-secret things going on behind Apple's closed doors that will change (hopefully for the better) our fruit company radically. This huge cash reserve could all be part of the Next Big Thing coming down the lines.



    Or maybe not. <img src="graemlins/hmmm.gif" border="0" alt="[Hmmm]" />
  • Reply 17 of 30
    cosmonutcosmonut Posts: 4,872member
    [quote]Originally posted by CosmoNut:

    <strong>

    6) No matter how stupid you think Steve Jobs and the Apple big-wigs are, it's still a profitable company.

    </strong><hr></blockquote>



    I never said HOW profitable, did I?



    Great discussion. Anyone want to comment on my other points in my original post?
  • Reply 18 of 30
    Little question:



    How did Apple get the 4B in cash anyway?



    I don't think they made 3 B in profit on the last few years? Is some of it because of stock?



    Oh, Fred Anderson has said in the conference calls that Apple is saving their cash (as opposed to buying back some of their stock which they were going ot earlier) for strategic reasons or strategic acquisitions or something.



    My bet is they're going to buy somebody, and they're waiting for the right time to do it. They probably want more cash and/or higher stock price, and maybe the target company (maybe SGI) to have a lower stock price, etc.



    Here's to Apple and their continued profitability, expansion, and upward share price (hey, I do want my stock to be worth something.)



    Could someone please explain how Apple has that much cash and how their stock/stock price is involved with that. TIA.
  • Reply 19 of 30
    airslufairsluf Posts: 1,861member
    .
  • Reply 20 of 30
    If I had to guess who would be a good takeover target for Apple, Sun is probably the best one It would give Apple a foot in the door on the high-end workstation and server markets; they have a UNIX-based OS that could be merged/swapped out with OS X; and Apple would have control of Java.



    However, like I pointed out, we already know for sure of one very obvious gaffe: shutting down the Newton division, which was years ahead of Palm at the time, and then trying to buy Palm two years later. I doubt Jobs would ever admit to it, but I truly think he shut down Newton out of spite and later saw what a dumbass move that was. Newton was turning a profit for the first time when the axe fell.



    As far as how they grew the reserve to $4 bil, I'm sure it was a combination of things: popularity of the iMac, liquidating the assets and reclaiming the net working capital of the various divisions he shut down, selling off assets (like the ARM processor; I think they got big bucks for that), selling off securities, and, of course, the growth of tech stocks at the time.



    I don't know what Apple's most recent financial statements say their cash reserves are; I'm sure they've taken it in the shorts along with everybody else because of the declining stock market.
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