“Apple has $100 billion of cash and a lot of ways to spend it. Add more retail stores? Check. Set up more server farms to support its iCloud service? Check. Build a second campus in Cupertino, Calif. to house its burgeoning staff? Check. Acquire companies and expand R&D? Check. Pay dividends and do stock repurchases? Check, check,” Connie Guglielmo reports for Forbes.
“How about buying up its own supply chain?” Guglielmo asks. “A lot of high-tech manufacturers on The Global 2000 dream about controlling what they pay for components and gaining the assurance that crucial parts will flow as needed. Apple is one of very few firms with the financial wherewithal to make that come true, specifically by buying production equipment to outfit new and existing factories in Asia that other people will run.”
Guglielmo reports, “Apple is already deploying its cash toward this very goal, say people who follow the company closely. It’s a strategy that will likely continue the disruption in the consumer electronics field that Apple has led to date. The iPhone maker has $64 billion or so of its cash sitting overseas, taxed at an attractively low 5% rate but also earning little to no interest. Any cash Apple chooses to bring back to the States would get hit at the 35% U.S. tax rate, not a pleasant prospect. Spending that money on expanding offshore production is far more compelling.”
Much more in the full article here.
[Thanks to MacDailyNews Readers “David E.” and “Arline M.” for the heads up.]