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  (Source: thetechjournal.com)
Cook is wondering what to do with the company's $97.6 billion

There's no doubt that Apple is a cash cow. Just last year, many reports started circulating that the tech giant had a larger bank account than the U.S. government, where Apple ended June 2011 with $76.2 billion and the government had $73.8 billion. Now, Apple CEO Tim Cook is saying that the company has more money than it needs.

At the annual shareholders' meeting on Thursday, which is the first since former Apple CEO Steve Jobs' death, Cook tried to determine whether Apple should stop hoarding cash the way Jobs has been for years, or if it's time to stick a hand in the $97.6 billion cookie jar and pay shareholders a dividend this year.

Apple used to pay shareholders a quarterly dividend, but stopped doing so in 1995 because of Apple's financial hardships. Apple even had to turn to Microsoft for a $150 million infusion around the time that Jobs came back as CEO in 1997.

After those dark times, Jobs held on to every cent that the company made. When the new millennium rolled around, Apple started seeing great success with Macs, Macbooks, iPods/iPod touch's, iPhones and iPads. Despite the large amount of cash coming in, Jobs continued pinching pennies.

Now, Jobs has been deceased since October 5, 2011, and Cook is looking to use some of the money that it has because he said "it's more than we need to run the company." The problem is figuring out what to do with the money.

Paying a dividend to shareholders would offer a long-term increase to Apple's stock price because it would lure new investors who only buy shares in companies with a dividend.

However, Apple shareholder Asif Khan of Sugar Land, Texas suggested that Cook not provide a quarterly dividend every three months because it might be misinterpreted by some investors that Apple is losing faith in its ability to continue pushing its stock price higher as the company keeps introducing popular products. Rather, Khan would prefer Apple to pay a one-time divided later this year before the federal tax rate limits dividends to 15 percent.

Apple's stock has soared 50 percent over the past year, producing about $160 billion in shareholder wealth and now has a market value of $480 billion. Shares of Apple rose less than 1 percent to $516.39 at closing yesterday.

Another suggestion of what to do with the cash was to buy Greece, which is currently experiencing a debt crisis, but Cook said Apple is not interested.

The cash cow is only likely to get larger with Apple planning several product and software launches this year. For instance, the iPad 3 is due to be announced at an event next week, and the OS X Mountain Lion operating system is due this year as well.

Source: Bloomberg



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Easy
By IGx89 on 2/24/2012 8:52:51 AM , Rating: -1
Easy: charity. That's what I do with mine. They could start by matching dollar-for-dollar (or 4-to-1...) what their employees give to charities -- mine, Thomson Reuters, does that...




RE: Easy
By Shadowself on 2/24/2012 9:07:07 AM , Rating: 3
Apple already does that for certain charities, e.g., donations to education institutions among others.


RE: Easy
By nafhan on 2/24/2012 9:15:22 AM , Rating: 2
Not at a level where they will make a notable dent in that much money.


RE: Easy
By mcnabney on 2/24/2012 9:21:55 AM , Rating: 2
My employer - Verizon - has done it for any 501(3)(c) charity. Dollar for dollar. I think the annual limit is 15% of your salary.

One of the many differences between businesses that are part of their community and a business that hoardes cash like a cult.


RE: Easy
By michael2k on 2/24/2012 9:59:48 AM , Rating: 2
Are you really blaming Apple for customers throwing cash at them?

Or are you just criticizing them for their dollar matching policy? Because according to what I've read, it's similar to Verizon:
http://www.macrumors.com/2011/11/10/apple-and-empl...

$10k and any 501(3)(c) charity. The big difference is likely that Apple has only 60k employees to Verizon's 193k employees. In any case, last year was Apple's first to do the dollar match, so you can blame Jobs if you want but Cook doesn't appear to be nearly as stingy.


RE: Easy
By MrBlastman on 2/24/2012 10:47:12 AM , Rating: 2
I can't think of a better charity or community to invest in that their own--the American community. They should take all their cash, build factories here and use those empty floors to employ Americans to build their products.


RE: Easy
By Iaiken on 2/24/2012 11:44:00 AM , Rating: 3
You mean like they used to back when the higher cost of an Apple product was because of it's US origin?


RE: Easy
By MrBlastman on 2/24/2012 1:25:04 PM , Rating: 2
As opposed to what? No reason at all? :P Yes. I've stated in other articles the cost would only increase by 25-30% on the baseline, internal side of things causing the consumer to absorb maybe half... i.e. a 10-15% price increase at most.

I don't support or condone Apple, but if they were to make a move like this, it certainly would make me look at them more favorably. The products would finally have a reason to command a premium.


RE: Easy
By Pirks on 2/24/2012 1:36:07 PM , Rating: 2
quote:
They should take all their cash, build factories here and use those empty floors to employ Americans to build their products
Reclaimer where are thou? Blastman here needs your enlightenment about this topic. Please :)


RE: Easy
By Reclaimer77 on 2/24/2012 4:01:31 PM , Rating: 1
quote:
Reclaimer where are thou? Blastman here needs your enlightenment about this topic. Please :)


Meah nobody listens to me anyway about that lol. Me and Blast have already discussed it, he knows the deal.

America just isn't able to produce on this scale anymore. We lost the ability to compete. It's not Apple's job to fix unemployment or all of our manufacturing woes.


RE: Easy
By seamonkey79 on 2/24/2012 5:55:14 PM , Rating: 3
...and everyone knows that the best way to fix something is to not try to fix it at all, that way it'll just be fixed one day.


RE: Easy
By tng on 2/24/2012 6:19:14 PM , Rating: 2
quote:
It's not Apple's job to fix unemployment or all of our manufacturing woes.
No, but you got to start somewhere. I think that Apple has put themselves out there with the image they have created and are paying the price with the whole Foxcon thing. Imagine the image boost if they announced that they were moving at least some of the assembly back to the US.


RE: Easy
By sigmatau on 2/24/2012 8:56:04 PM , Rating: 3
Samsung must be a smarter than Apple. They figured out how to supply CPUs for Apple's iphone by manufacturing them in the United States.

Who would have thought that one of the most expensive, if not the most expensive, component of the iphone is made in the US by a foreign company.


RE: Easy
By messele on 2/25/2012 11:14:26 AM , Rating: 2
Indeed. All those tiny Americans shrunken down wiring all of those billions of transistors on microchips. That truly is America's saviour.

Or it could be that the process of manufacturing a microchip is 1,000's of times less labour intensive than final assembly of an electronics product and therefore those jobs that are required are much more technically demanding and therefore much better paid.

Some job's are necessarily better performed in the West, some are provably better performed in the counties with a vast excess of labour.


RE: Easy
By sigmatau on 2/25/2012 3:55:30 PM , Rating: 2
Sorry nutso. I don't know what "1,000's of times less labour" means. I actually took math classes in school.


RE: Easy
By messele on 2/25/2012 4:25:39 PM , Rating: 2
Go sit on the play mat and I'll explain in simple words just for you.

Take the amount of manual labour (hours and minutes) that go into building a mobile phone. Call this variable 'A' if you wish.

Now take the amount of labour that goes into building a microchip at a fab plant. This is going to be variable 'B'

Mathematically (A/B) >= 1,000

Does that make sense now or do I need to call Bert and Ernie to explain the finer points of why labour intensive jobs are not suited to high wage economies?


RE: Easy
By simsony on 2/25/2012 11:39:38 AM , Rating: 2
Higher cost countries need to do higher skilled manufacturing. CPU manufacturing needs skilled labour, more of that in the US than China, for now.

If it was just about spending the money, they could move assembly to the US, spend all the money, and when they run out, move back to China.

You have to invest the money not just spend it. The ROI of such a move would and will be negative. No one spends $50 for something they can get for $2. Of course, the low price should be ethical, and Apple can do some work there no doubt.


RE: Easy
By protomech on 2/24/2012 1:57:20 PM , Rating: 2
Apple already matches charitable gifts (relatively new program).

http://philanthropy.com/blogs/philanthropytoday/ne...

They could move production back to the US, drop prices, extend standard warranties, etc.


RE: Easy
By Flunk on 2/24/2012 9:58:50 AM , Rating: 2
That's not protecting shareholder's intrests, do you know anything about business?

I say they invest in Oil companies. Let that money work.


RE: Easy
By messele on 2/24/2012 10:30:21 AM , Rating: 2
Actually Apple do that already at 1:1. There's a cap on the amount per individual employee but such a scheme is in place.

Next highly researched criticism?


"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs














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