Apple’s cash pile may soon exceed Microsoft’s

“Apple Inc. shareholders haven’t had much to carp about, with the stock up 1,474% since 2003. But if there is one complaint, it’s the company’s refusal to do anything with the $20.8 billion in cash and short-term investments it has socked away. The cash just sits there, earning little more than the average savings account. ‘Our preference is to maintain a strong balance sheet in order to preserve our flexibility,’ Chief Financial Officer Peter Oppenheimer told investors earlier this year,” Peter Burrows reports for BusinessWeek.

“Apple’s about to get a lot more flexible. While it has been adding about $1 billion in cash each quarter, analysts predict the company’s hoard could surge to nearly $30 billion over the next year because of strong sales of computers, iPods, and iPhones. Apple may well pass Microsoft, which has $23.7 billion in cash. ‘[Apple] could have $40 billion in the bank [in two years],’ says analyst Gene Munster of Piper Jaffray,” Burrows reports.

MacDailyNews Take: If Microsoft keeps burning cash on stupidity such as this, this, and this, Apple won’t have to wait very long at all to pass Microsoft — a couple of weeks at most. (Disclaimer/Toast: May Steve Ballmer run Microsoft for as long as it takes!)

Burrows continues, “If Apple’s stock keeps rising, pressure from investors to do more with its cash will remain muted. Still, some experts think it makes sense for the company to make changes, given its hefty bank account. They say Apple could seek more acquisitions, probably small ones, to hasten its expansion into new businesses… Some analysts think the company should explore acquisitions in the music business, taking advantage of the major labels’ dire straits.”

More ideas about what Apple should do with their cash hoard here.

54 Comments

  1. It probably suits Apple to have Adobe as a competitor anyway, in such much as they have a rival to base, say, Aperture off. In other words, if you own all the companies liable to create photo apps, where do you get the competition or even impetus to actually bother?

    Apple (and I believe Steve said this once) benefits from competition as it gives them a guide to creating new things or doing better than their rivals.

    No company wants to be a monopoly, really, as the logical conclusion of it manifests into consumer hostility, lazy management, decline, stagnation and death.

    The fall may be slow, but it will happen.

  2. Andy,

    “Apple (and I believe Steve said this once) benefits from competition as it gives them a guide to creating new things or doing better than their rivals.”

    That’s the difference between a leader with vision (Steve Jobs), and a leader without (Steve Ballmer).

  3. I’ll preface this by saying I’m the furthest thing from an expert in the world of corporate acquisitions, but couldn’t it be that Apple wants all that money on hand to make it very difficult or impossible for Microsoft to ever try a hostile takeover?

    I’m assuming the shareholders would have final say in that situation, but I wonder how many people who invest in Apple do it because they love the company and its products or just love to make money.

    If you thought the dark ages of computing were prior to 2006, imagine if Microsoft somehow got its grubby hands on OS X.

    Just a thought.

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