“Jobs recently shot down the idea that Apple would return to shareholders any part of the massive cash hoard it’s amassed from the booming sales of its shiny gadgets. The high priest of the Church of Apple justified his stance by arguing that the company’s cash and investments, which now total more than $40 billion (larger than Guatemala’s GDP, for those wondering), gives his company ‘security and flexibility’ when it comes to making future moves,” Jhonsa writes. “However, even a quick look at Apple’s acquisition history makes it clear that this isn’t a company with a habit of doing high-profile deals that take a huge bite out of its balance sheet.”
Jhonsa writes, “The one area where I could see Apple truly opening up its purse strings a bit is in deals with media companies. Given its squabbles with Hollywood studios regarding the availability and pricing of iTunes content, the company might decide to use some of its billions to make “strategic investments” in the likes of Disney and Viacom, or maybe gaming giant Electronic Arts, with the goal of guaranteeing the long-term success of iTunes (and indirectly, Apple’s consumer electronics hardware). But if the history of such moves is any guide… the total cost of the deals are unlikely to come anywhere near $40 billion — never mind the $60 billion or $70 billion that Apple might soon have on its hands, given its tremendous cash-generating ability.”
Full article here.
MacDailyNews Take: If nothing else, Apple’s cash pile does two things just by sitting there: It assures product buyers that the company is here for the very long term and it frightens the you-know-what out of competitors. Twin missions accomplished, all the while generating interest.
[Thanks to MacDailyNews Reader "Marty S." for the heads up.]
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