Apple’s billions are building an empire for the future

“Given that Apple now sits on well over $144.7 billion in liquid resources, there’s lots of discussion about how the company could or should be spending it. What Apple is already doing with its cash is actually more interesting,” Daniel Eran Dilger writes for AppleInsider.

“Apple now sits on a staggering amount of resources [well over $144.7 billion in liquid resources], much of which has been earned (and remains) outside the United States. The company is now generating so much new cash that it has jumped to the front of the line both in paying its shareholders the most dividends and in paying the U.S. the most taxes (in part because it doesn’t evade taxes by routing domestic sales through other countries as many of its competitors do),” Dilger writes. “Even so, it’s amassing new cash faster than its spending it.”

Dilger writes, “If there were someone better equipped than Cook and Apple’s Executive Team to be spending Apple’s money, those persons would have accumulated vast capital of their own to spend, and would already have the global power and influence that Apple has earned for itself. That makes it all the more interesting to see what the company that Jobs built will be doing next. The company’s upcoming Worldwide Developer Conference should reveal quite a lot along those lines.”

Much more in the full article here.

15 Comments

    1. I hear you. Even though the wife and I bought an Apple II years ago, after that it was PC until the original iPhone.
      Now: New top line 27″ iMac, 21.5″ iMac, 15″ MBP, 4 iPads, 4 iPhones, 2 ATV, AirPort Extreme ….

      Yikes!

  1. AI is full of a lot of hot air lately.

    Apple’s cash insulates them from having to worship the whims of the market, and gives them first mover privileges on revolutionary tech when/as it comes about. That is all.

    1. http://www.cbpp.org/files/10-16-03tax.pdf [decade-old data shown to de-politicize the issue. the trend hasn’t changed since].

      The idea that American corporations are overtaxed is ludicrous. Practically all the largest multinational corporations on the planet aren’t all headquartered in the USA for no reason. If American costs were too high, they would relocate headquarters, would they not?

      Furthermore, with actual tax rates at historical lows in two generations AND the US budget running in the red because it doles out more services than it charges for, I don’t think you have a valid point.

      Since both political parties are lapdogs for the corporations that fund their incessant campaigning, US tax law actually offers corporations exactly what they want: superficial complexity so they can whine about it, but ample loopholes to satisfy their every want, plus almost complete elimination of tariffs no matter what communist nation happens to be importing whatever toxic near-slave-labor-assembled products into the USA. …all while passing the bill to the individual taxpayer. But of course the individual taxpayer isn’t covering the balance of the federal budget either — debt has accrued recklessly under both corrupt parties without serious attention to controlling it since Eisenhower stepped out of office.

      If corporations paid fair but meaningful tariffs, fees, and fines that supported the infrastructure that they use and punish bad behavior — and yes, obviously they would pass those costs onto consumers — then the USA could be looking at a balanced budget. Consumers would be free to pick the most efficient company with which to do business. But as it is now, nobody is picking up the tab for all the services that they consume.

      … and yes, I am fully aware that you are in the prime of your life and don’t consume any government services. Someday you will. If you want to talk about making our government more efficient, we’re all in agreement. But that is another issue for another forum.

      1. Nice post, Mike! It is comforting to see reason and practicality posted on this forum rather than extremist rhetoric.

        This is not an issue of the Government stealing/confiscating wealth. This is an issue of the U.S. paying for the services that it consumes and the manner in which that revenue ia collected. We need open and frank dialog on tax policies and spending policies, and everything needs to be on the table for debate. Times have changed, and we need to evolve our policies accordingly.

        1. Melvin, your devolving mentality are as if one took “The Descent Of Man” started on the last page and began reading backwards. The above exercise in bureaucratic sycophancy puts you on about Page Eight. I sure hope my comment defines what you intend as “open and frank dialog.”

            1. Stealing/confiscating. You would think that we weren’t allowed to vote. As if some self-appointed king were sending out tax collectors.

              In California we voted for a small tax increase. Combine that with a recovering economy and we find that the budget is balanced with an expected surplus next year.

              Government provides services that we need. Those services cost money and that money currently comes from taxes. We vote for our representatives who then set tax rates. If we don’t agree with their actions we have the option to vote them out of office.

  2. I would think that it would be in the governments best interest to lower the Tax on repatriation to say 5%. Then if Apple were to bring back say 80 billion that’s still an instant 4 billion for the Gov. And then any money Apple makes on the 76 Billion would also be taxable, also any money they spend or return to shareholders would also be taxable.

  3. Apple might best use some of that reserve cash to bribe a few key politicians so they see things Apple’s way. I’m sure Google would use that method.

  4. Apple is going to do some things as “insurance.” Cook already announced some US production will start up. Brazil will see some Apple products produced there now.

    China, in spite of its growth, is an inherently unstable country with a thousand year history of political overthrows. The country’s prior leader admitted to one US executive his worst fear, “That we will fail to create 25 million new jobs next year.” That is the number of people entering the job market and mostly heading to the major city/industrial areas.

    Apple’s near sole dependence on China assembly must be lowered to eliminate risk and Cook more than anyone understands the details.

    1. This is a very good point. Instead of playing short-term stock games, Apple should be investing far more in vertical integration with diversified manufacturing locations. Any company of Apple’s size should have technical offices and manufacturing facilities near its customers on each continent.

      Another upside of having deep worldwide presence is that ideas from all corners of the world can flow back to Cupertino _though_ the enterprise, leveraging best practices and innovation wherever it can be found.

      Today, it is simply not likely that Apple can possibly achieve manufacturing efficiency gains, since outsourced production facilities have every incentive to cut corners and practically zero incentive to share with Apple any new ideas on how to build a higher quality/more easily assembled/less toxic/more cost efficient product. …and of course Foxconn can’t possibly stop cross-pollination, leaking Apple’s product innovation with the other brands Foxconn serves. Apple has much IP to protect, and very little to gain by putting all its production in the hands of low-cost Asian contractors.

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