Apple to hold call March 19th to talk about its $97.6B in cash | Hacker News Reader

Apple to hold call March 19th to talk about its $97.6B in cash

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42 pointstilt69 comments

I swear it's Apple's only choice, throw up your hands and raise your voice.. monorail!

Well, maybe not a monorail, but I feel compelled once again to point out that Apple could afford to build its own space station: http://en.wikipedia.org/wiki/International_space_station#Pro...

Indeed! And that's at inflated government prices. If they just contracted with SpaceX and Bigelow or others they could probably have a space station for a tenth of that or less.

That's more of a Shelbyville idea.

Ha! I'm almost disappointed I got voted up actually. This is more of a Reddit conversation ;-)

I wonder what a monorail could do for Silicon Valley though..

Also, Apple does not hold $97.6B in cash in the United States. Over 50% of their cash is overseas, which prevents them from using it in the United States unless they take a huge haircut. So keep that in mind when theorizing on U.S. centric uses of cash. Think global!

edit: Pretty graphs: http://seekingalpha.com/article/318794-apple-s-foreign-cash-...

For the same reason Microsoft paid far, far too much money for Skype.

It's a bit of silliness that really ought to go away. Corporate taxes are rather silly. Get rid of them and make capital gains count as regular income for tax purposes.

Say for a minute that Congress announced a moratorium on tax of repatriated foreign funds. Do you believe this would be viewed as "evil" companies gaming the system, or do you think that the huge influx of funds back into the U.S. would actually help spur economic growth?

The choices

> would be viewed as "evil" companies gaming the system

and

> huge influx of funds back into the U.S. would actually help spur economic growth

are in no way mutually exclusive.

> make capital gains count as regular income

A huge tax increase on savings and investment serves what policy goal again?!??!?

I will eat my shoe if Apple buys Twitter.

Edit: In light of this post (http://dcurt.is/100-billion-units-of-strategy) I'll add that I will also eat my shoe if Apple buys Netflix.

Dropbox is the only "big" tech company Apple should buy, and they had their shot.

I don't even understand the Twitter integration into Apple's products. It seems like it's defensive, just to protect from Google+ being well integrated into Android and thus somehow making Google+ plus Android more successful than iOS (3 jokes there!), or Facebook doing some deal with Microsoft or building their own phone of some sort and leading to the same.

iMessage/iCloud seems like it could easily grow into something just as useful for Apple as any Twitter integration.

Twitter the company (except for Jack Dorsey) would also be culturally incompatible with Apple. I could maybe see Square working out as part of Apple, though.

Actually, buying Flickr from Yahoo and turning it (plus iPhoto, Camera Roll, etc.) into a photo sharing competitor to Facebook, and growing social networking features from 1) strong photo sharing 2) real identity 3) iTunes/iCloud accounts 4) iMessage IM/group IM, would probably be the way for Apple to have a social alternative to Facebook or Google+, if that ever really were an Apple objective.

But, as you've said, Apple is horrible at online services (iCloud is barely ok, and only because most functionality is hidden infrastructure -- MobileMe was horrible) and at advertising and really at everything except making devices and operating systems/apps for those devices, so this would be a bad path for them.

Twitter wouldn't even put a significant dent into the nearly $100B in cash they have. They'd still have ~$90 billion left over after buying out Twitter.

In theory they try to buy the big blue book of faces. Not sure the merger would be approved, though. Also it would be a waste of money, just like buying Twitter.

Then buy Facebook.

That's more than they can afford, at least without substantial equity in the deal.

10% isn't a significant dent?

Apple sell products and they sell content. I couldn't imagine them running a free service.

And they suck at advertising, and they suck at web services. Why go in deeper?

The thing Twitter has that could be of value is a big library of users with accounts, but Apple already has that. iTunes accounts are (I think) roughly the same size as Twitter, plus all accounts have some payment mechanism on file.

iCloud.

You buy iCloud, just as part of the purchase price of Apple hardware/software.

> iCloud.

ICloud sells devices—it's a tech spec, in a way. It's beneficial to nearly all of their users (invisible backups, Find My iPhone/iPad/Mac, etc).

Twitter, not so much.

Now that Oink is gone...

I'd like to see them take $10b and create a huge amount of free educational content on the Internet. In the long run, this would drive enough sales to be a worthwhile commercial decision for Apple, but it would also make the world a much smarter, more peaceful, and more economically vibrant place.

Particularly, I'd like to see this content available in Spanish, Arabic, various subcontinental languages, and Chinese. There's been some progress in English, but not a whole lot in other languages.

Online (free) education is right where technologies usually are before apple swoops in and makes the Apple version -- concept proven, but somewhat painful user experience (no one could look at coursera, khan academy, mitx, etc. and call them Apple-quality UX).

It would also be a great way to deploy part of the $70b or so which is trapped outside the US. As much of the US portion of the cash as possible should be returned to shareholders as a dividend (assuming the tax code doesn't change in 2013 to change dividend taxation from 15% to 39.6+3.8%; if so, a buyback makes much more sense, or just holding cash).

Since when is Apple a charity and should do altruistic things? I don't see how this will help apple and just seems like a way to spend money.

Increased sales of Apple devices -- either via explicit lock-in (delivery via iTunes) or implicit (the iPad is the best consumption device, and maybe could use trusted platform tech to do exams without cheating, etc.) Sell $149-$199 iPad 1 refurb units (or get the iPad 2 down to $250-300), and you'll end up eventually owning the corporate workspace.

I am with you on not liking corporate philanthropy in general (profits should be distributed to individuals, who can then make their own charity decisions; I'd hate it if Apple donated to causes I dislike or find sub-optimal), except in cases where the company can achieve both commercial and charity objectives and do so better than anyone else. At the very least, it would have to provide as much cash return to Apple as the blended mix of investments they currently make.

Apple is not in the business of making content. Apple is in the business of making platforms for other people to put their content on.

$10b of anything that is locked to Apple-only devices (distributed through iBooks or some other app) would likely help Apple sell more hardware. It's harder to say than it would sell enough hardware to be a profitable decision.

even if it's not locked into apple devices, apple currently has the most desirable devices for consuming digital content. if they make something that causes people to switch from paper to digital, they're going to sell a more iPads.

Make it available for free but only via their AppStore (platform lock-in).

Since when has doing altruistic things been a bad thing to do with a giant wodge of spare cash?.

It's a great thing to do with your own cash; it's not a good thing to do with someone else's cash. Apple's cash belongs to shareholders, not to Tim Cook or the board.

Don't you think their iBooks publisher and textbook efforts will do this at much lower cost?

Yeah, making tools is clearly where Apple's strengths lie, vs. creating content. They can just continue to make great education-program-creation tools.

Don't they already have this with iTunes U?

Wow, I hadn't looked at that in a while -- they have a good number of providers now.

It's still English-focused, but seems superior to most of the rest of the free courses. It looks like they just do video, so it would be nice if they did exams, problem sets, etc. too.

I know it's not feasible but I would love for them to become a telephone service provider.

For the uninformed like myself, why is this not feasible with the amount of cash they have? Could Apple not acquire a global carrier and mount a hostile takeover of the market?

A lot of people believe that this is the route that Google will eventually go down as they've had a tougher time with carrier support than Apple. From the outside it seems logical to eliminate a market should it pose opposition and if money and logistics were no issue I would think that it'd be an issue of when, rather than if.

how many percent of customers would the other carriers lose if apple made the iphones/ipads apple-carrier-only?

How many percent of customers would Apple lose if Apple made the iPhones/iPads Apple-carrier-only?

Not gonna happen.

I would love if Apple would try to buy out one of major Hollywood studios or music labels. For instance Disney's market cap is $80B and Steve Jobs also was the largest shareholder of Disney. This could truly cause a revolution in digital content delivery.

I know making films or music has nothing to do with their core business, but if a search engine can buy Motorola. Why the hell not?

It would be great if Apple could deal themselves into the content creation game a little. If they purchased an existing studio and were able to distribute their own TV shows and Films in the manner that they wanted, then they would not longer have to go through lengthy deals with other studios before releasing new products. And having that content would put pressure on other studios to negotiate quicker (I would think).

Whilst that would be exciting and interesting - I think it will only be something boring like a dividend.

Buying a cell carrier, movie studio, or music label would only alienate other partners. Apple's other acquisitions were software, to compliment their hardware business.

Antitrust among other non-regulatory reasons.

Okay. To buy a music label, would be problematic, but Apple is not really a big deliver of movie content in terms of market share, yet, are they?

I'd love to see Apple hack the system. There are a huge number of institutional funds that are not allowed to invest in Apple due to regulation that limits them to companies which provide a dividend. It would be awesome if they announced a $0.01 dividend, simply so that they were now an investment vehicle for all such funds.

edit: I could have been a bit more clear.. I was referring to funds such as pension/mutual funds, not banks.

Are you suggesting that Apple is undervalued and therefore would be a great longterm vehicle for your parent's pension?

Their P/E is currently lower than Amazon and Google, and just about even with Oracle. Yeah, I think it's undervalued.

It seems crazy, given their stock price and recent explosion of ever-higher highs, but I don't think Apple is anywhere near the end of their sustained growth potential. Is MSFT a "safe" bet for a pension fund just because they issue a dividend? In the supposed post-PC world, if MSFT doesn't catch up quick, they have a lot to lose. I guess I just don't believe in anything remaining "safe" over decades just because there is a dividend.

Inventing the personal computer is what I'd call hacking "the system". Pandering to institutional investors...well I don't know what I'd call it exactly, but it certainly wouldn't be "thinking different".

It would seem like a corruption or mockery of the ideals of the company that effectively invented the personal computer market and was anti-authoritarian in so many ways for so long.

What about doing this is pandering? Almost all of Apple is owned by institutions and they have been reaping all of the benefit of the company's crazy growth. The total ownership of all pension funds (29 of them) and mutual funds (626 >= 1000 shares) account for < 5% of the float. I'd love to see the wealth spread around to all who want to participate. That could possibly do more for the common person than a dividend ever would. Apple is 72% institutionally owned. Paying a dividend at all is directly pandering to institutional investors!

I'm really hoping apple will try to become an ISP and revamp our infrastructure.

Given how dependent Apple's devices are on wi-fi, I'd love to see them invest in building out real, full-coverage wi-fi in the top 10 U.S. cities available for free to any Apple device.

Getting into the cellular game seems like a mistake, but investing in wi-fi "towers" to side-step cellular companies seems like a win.

Especially when you consider the investment Apple has already made into web services that side-step the cellular establishment (iMessage, FaceTime, iCloud, Push Notifications, App Store, etc). They don't need cell towers, everything works on Wi-Fi.

Or they can simply keep making money with LTE / G4 without any investments?

Trust me, I agree with that more than anything. I don't want to see them spend money on anything, really, if they don't need to. More wishful thinking.. :)

I always wondered what apple's plans were for the next 10 years.

The iPad is close to perfection, the next iterations surely will improve but only slightly and in maybe 3 or 4 years most people won't need the newest device anymore.

The same will be for smartphones in a couple of years, the limitations will be in the speed the carrier provides.

It absolutely has to be the living room. And domination of the laptop market.

http://www.alexmuir.com/2011/12/apple-must-build-a-console/

There is no shiny in that. Apple is about making the shiny.

I don't mean that as a negative comment - they are about making shiny easy to use products and an ISP is not that.

Monthly dividend. End of story.

I think a one-time dividend is much more likely. A recurring dividend sends the wrong signal to Wall Street (we're no longer a growth company). A one-time dividend says something more like, "Yeah, we have a crap load of cash...here, have some."

To anyone who has made a lot of money off of AAPL in the past X months, I'm sure the dividend would be tiny in comparison. I don't see the point. I do think they should have a $0.01 dividend (see my other post).

A recurring dividend sends a signal that they are no longer a speculative fool's investment but a solid cash-cow.

A reasonable dividend (1% per yr) leaves more options open for a big acquisition in the future if they want, eg Sony, or Comcast, or Netflix (they can afford all three if they want). I highly doubt they'll blow the whole load in one shot.

If they're going to make an acquisition of that magnitude, then they should buy a controlling interest in Amazon.

They can afford a monthly dividend for the next year, and still buy 100% of Amazon.com.

They're going to acquire every startup they possibly can and then turn into what we all feared.... Skynet

Why would we fear that? Skynet was an unparalleled pinnacle of engineering achievement.

...and almost killed off the human race

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