Apple CEO Tim Cook: We Have More Money Than We Need
February 24, 2012 8:13 AM
comment(s) - last by
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
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,
. 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
is due to be announced at an event next week, and the
OS X Mountain Lion
operating system is due this year as well.
This article is over a month old, voting and posting comments is disabled
2/24/2012 9:48:52 AM
They don't lack investors - so they shouldn't even bother trying to impress them. They should invest a lot of that money into hiring scientists - become a research & development company; create and patent new technologies.
Scoop up undergrads, treat them well and gain their loyalty. Perhaps they already do this.
Hire independent artists (like me) to increase their brand awareness and explore new styles for their product line. I'm super-poor but talented - Apple could hire an army of Me's for 20k a year and we'd love them for it, and it would be our job to make others love the brand, as well.
Or, create new product lines that don't cost an arm and a leg for consumers to purchase. With $100 billion dollars, you'd think they'd discover a way to make a new iPhone affordable.
For the iPhone 5, why not sell it at or below cost? A brand new iPhone, free with a two year contract. That would saturate the market, destroy Android, and Apple would still turn a profit on app sales from new purchasers alone. Maybe. Heck, just try it for a year and see if it works. They can afford it.
2/24/2012 10:03:07 AM
That's a bad idea. Giving away the iPhone 5 free on contract means selling it for $375 or so, and pushing the 4S to $300 and the 4 to $200.
Essentially they would make almost no money and their share price would fall as everyone sells AAPL.
Also, it's illegal to flood the market for a year to crush competitors.
2/24/2012 6:30:40 PM
While the idea is good, yeah there are laws against piracy pricing. Also there would be a customer backlash against them from many people who bought the 4 and 4S who didn't get their phone for free, I would think.
2/26/2012 10:51:38 AM
Essentially they would make almost no money
You seem to be forgetting Apple's cut of app store sales...
"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher
OS X 10.8 Mountain Lion Growls at the Masses
February 16, 2012, 1:48 PM
Report: Apple to Debut iPad 3 During First Week of March
February 10, 2012, 9:36 AM
Apple Has Another Blowout Quarter with $13B in Profit; Sells 37M iPhones, 15M iPads
January 24, 2012, 5:02 PM
Apple's iPhone Outsells All Android Phones Combined at Verizon
January 24, 2012, 4:18 PM
Smart Security Cameras: 5 Good Choices For Any Budget
July 25, 2016, 7:13 PM
Top 5 Smart Watches
July 21, 2016, 11:48 PM
Retiree Sues Apple For $7,500 for Wiping Honeymoon Photos From His iPhone
November 30, 2015, 10:23 AM
iPhone 7 May Pack 3-4 GB Memory, More Storage; 4-Inch Comeback is Rumored
November 20, 2015, 10:12 PM
OnePlus One, OnePlus 2 Will Receive Android Marshmallow in Q1 2016
November 16, 2015, 9:58 AM
Lenovo Whoa: Motorola Droid MAXX 2 and Turbo 2 Break Cover in Leaks
October 26, 2015, 3:12 PM
Most Popular Articles
2 NEW PlayStation 4 Models - Unveiling September 7th
August 23, 2016, 6:23 AM
iPhones May Get Curved Screens Next Year
August 24, 2016, 6:45 AM
Drones at the Airport
August 26, 2016, 5:00 AM
5 Easy Ways to Lower Blood Pressure By Monique C. Bethell, Ph.D.
August 25, 2016, 8:00 AM
Say Goodbye to Data Plans - Sprint and T-Mobile offer Unlimited Data
August 22, 2016, 6:12 AM
Latest Blog Posts
First Self-Driving Car debut on the streets of Singapore
Aug 28, 2016, 4:10 PM
Coming Soon - Drones and Airports
Aug 24, 2016, 12:40 PM
SolarCity’s Gigafactory: A Milesone in Emerging Technology by Lily Emamian - 15 August 2016
Aug 15, 2016, 6:30 AM
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information