Apple’s $51 billion mountain of cash: What company is Steve Jobs saving up for?

“Pulling in billions of dollars quarter after quarter, Apple has provided Silicon Valley with a seemingly endless guessing game about possible mergers and acquisitions — but one that has largely gone on up to now without the participation of Steven P. Jobs, Apple’s chief executive,” Thomas Kaplan blogs for The New York Times. “But during Apple’s conference call on Monday — after Apple reported a strong surge in profit and revenue in its fourth quarter — Mr. Jobs said point-blank that Apple was saving its cash to use some day for one or more ‘strategic opportunities’ that the company would be in a unique position to pursue. ‘We’d like to continue to keep our powder dry because we do feel that there are one or more strategic opportunities in the future,’ Mr. Jobs said. Mr. Jobs was responding to an analyst’s question about why Apple was not considering buying back its shares or offering a dividend, considering that the company now has an eye-popping $51 billion in cash and short-term and long-term securities.”

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“Most of Apple’s recent acquisitions, like the chip maker Intrinsity in April or PA Semi two years before that, have been aimed at providing components or human capital that will bolster Apple’s product development,” Kaplan reports. “A bigger target that fits within that space would be the chip maker ARM Holdings, which Apple has been rumored in the past as having an interest in buying… More intriguing, perhaps, would be if Apple instead switched gears from components and began to pursue companies that deal in the world of content — either companies that deliver content or make it [Netflix, Electronic Arts] …The most headline-grabbing acquisition Apple could make would likely be in the realm of social networking. ‘Facebook may make sense, as crazy as it sounds,’ Shaw Wu, an analyst at Kaufman Brothers, said. ‘It’d be a game-changer.'”

Full article here.

MacDailyNews Take: Some people don’t seem to have noticed that Steve Jobs has quite the flair for the dramatic: Microsoft. wink

176 Comments

  1. Well, the good news is that, if S. Jobs pulls off a strategic acquisition, you can bet your mortgage it will have an realistic plan to and will ultimately realize it’s synergistic value.

    I’m hoping for the content side, and not more vertical integration.

  2. Well, the good news is that, if S. Jobs pulls off a strategic acquisition, you can bet your mortgage it will have an realistic plan to and will ultimately realize it’s synergistic value.

    I’m hoping for the content side, and not more vertical integration.

  3. @ Prophet

    Even though I would love for AAPL to buy ATT and put the current billing and costumer service structure over their out of it’s misery I could see such an acquisition as hurting AAPL’s relations in the US with a company like Verizon. However if Verizon doesn’t play ball with AAPL I could see ATT as a very real acquisition target. And then I could see AAPL stream-lining, simplifying and generally removing that pain that many a ATT customer feels every month when they look at their bill.

  4. @ Prophet

    Even though I would love for AAPL to buy ATT and put the current billing and costumer service structure over their out of it’s misery I could see such an acquisition as hurting AAPL’s relations in the US with a company like Verizon. However if Verizon doesn’t play ball with AAPL I could see ATT as a very real acquisition target. And then I could see AAPL stream-lining, simplifying and generally removing that pain that many a ATT customer feels every month when they look at their bill.

  5. @ Prophet

    It might be enough for AAPL to look like it’s thinking about buying ATT to make sure Verizon plays ball. Again if they don’t then I could see AAPL going to the mattresses with a ATT acquisition and boy would that be fun to watch.

  6. @ Prophet

    It might be enough for AAPL to look like it’s thinking about buying ATT to make sure Verizon plays ball. Again if they don’t then I could see AAPL going to the mattresses with a ATT acquisition and boy would that be fun to watch.

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