“In its latest earnings report on Wednesday, Apple recorded cash and cash equivalents of $65.8 billion, adding to the prior quarter by about $6 billion. The sum easily trumps Apple’s peers. Google, which boasts the second-largest cash pile, reported $36.7 billion in cash last week, less than half of Apple’s war chest [sic],” Evelyn M. Rusli reports for The New York Times.
“And the Apple machine, supported by the fierce popularity of its iPhone and iPad products, shows no signs of slowing down. Revenue rose 83 percent, to $24.67 billion, in the last quarter. But as it grows, analysts say, at some point Apple will have to crack the piggy bank — and maybe go shopping,” Rusli reports. “‘It’s going to become truly untenable,’ said Yair Reiner, an analyst with Oppenheimer & Company. ‘Two years ago, I would say its cash pile would be untenable at $50 billion, and now we’re at $70 billion. At some point something will need to get done.'”
“As long as Apple can maintain its trajectory, analysts say, it will be difficult for shareholders to complain about excess cash. But the pressure is mounting. Apple is trading at a discount to the broader Standard & Poor’s 500-stock index, according to Mr. Reiner’s calculations. The average company in the S.&P. trades at 13 times 2012 estimated earnings. If you subtract cash from Apple’s price, it is trading at about nine times 2012 earnings, he said,” Rusli reports. “‘Now that Apple is trading at a discount to the overall market, it’s easier to argue that Apple is being penalized for holding onto its cash,’ Mr. Reiner said.”
Rusli reports, “If and when Apple decides to spend, it is unclear what the company might do with the money… One possible target is Netflix, a movie rental service that streams content to users’ personal electronic devices. The service, which is also available on Apple’s iTV [sic] device, could compliment [sic] Apple’s iTunes service, which hosts thousands of movies and videos, according to James Cordwell, an Atlantic Equities analyst… The analysts interviewed said an acquisition of Facebook remained a remote possibility.”
Read more in the full article here.
Apple will launch a satellite… maybe 2 of them. Damit, I want to see an Apple logo orbiting the earth!!
I’ll have the cash even if it makes me untenable.
I don’t mind.
I can do untenable.
So give me the cash already.
The North Carolina data center cost Apple (only) $1 billion. You want them to build 66 more of those? Uh, no. Tim Cook made it very clear that they will use their cash hoard for advance supply purchases and strategic contracts. Like the ones that are forcing competitors to spend more for things like LCD panels and flash memory.
There is a huge crash coming… When it does, perhaps Apple intend to take a leaf out of Ivana Trump’s book: “Don’t get even darlink, get everything…”
How come the Donald is still walking around with his pants on if she’s got everything?
Alex said: “2) Selectively buy content and make it exclusive to iTunes only, like important iconic collections of movies, shows, documentaries, etc. Same thing for iBook store.”
This could invite another Paramount Decree.
http://en.wikipedia.org/wiki/United_States_v._Paramount_Pictures,_Inc.
Buy Sprint.Then Apple could provide their own Internet services and wireless network to their customers.
Produce original multimedia content and stream it directly from their own data centers, across their own networks, to their own devices.
Own everything.
They underestimate the power of Steve Jobs’ bruised ego.
“hello, mr. Adobe CEO?”. “yes?”. “you’re out of a job and so are your flash and windows development teams.”
“hello, Mr. Balmer?”. “yes?”. “you’re out of a job, so is your windows team, office, team, and more. The Xbox group will be partially rolled in to our iOS efforts and the rest spun off to our apple tv group.”….chair is tossed into orbit.
Spend the money to make all Apple software and services top notch, no bugs, no bloat.
Work with automakers to integrate iOS devices in all major manufacturers top line models, stereo, Bluetooth , iPhone etc. As keys, iPad docks.
Work with Lutron or the like to integrate iDevices with home lighting systems, sound systems etc..
Make my new iPad stop dropping the wifi signal at my house.
The trend lines show that Apple leverages it’s cash on products and services that support their core values. Forget Facebook or buying some service that you would love Apple to invest in.
Apple’s excellence lies in doing a few things remarkably well rather than trying to be all things to all people. And for sure they aren’t going to get into a commodity business.
They aren’t going to buy Microsoft or Dell – their business models would be a drag on Apple.
Maybe after this white iPhone fiasco they might want to invest in a plastic fabricator so that they can further mfg techniques beyond the market.
IF i was Apple i would get rid of all that cash fast, because soon it will be worth nothing when the dollar will be a worthless piece of paper – so they should buy something with all their cash or exchange the dollars to swiss franks or gold/silver!!!
What about the one where Apple buys Adobe and discontinues all support for Creative Suite on Windows? Haven’t heard that one in a while… LOL
Lazy fecking slow-news-day journalism. Zero in on Apple’s cash hoard, and speculate what they could do with it by throwing in a whole bunch of well-known names that could be takeover targets. If this billion-parking goes on for a few more years, Apple could buy a country (and rename it MaciStan!)
Personally I think the real reason they are giving themselves a very ample financial cushion is that they don’t really know how the finance world and the fearful public will react when Steve Jobs is no longer with us. If Apple’s Stock tanks in a major way, as some predict. This cushion of money will come in handy to ride out the storm that may rage for an undetermined amount of time.