17 ms·

Reinvest in what exactly and in a way that would return money back? Apple has suffered through the tough times in the 90s where they almost went out of busines

Reinvest in what exactly and in a way that would return money back? Apple has suffered through the tough times in the 90s where they almost went out of business. Having that much money means Apple can take greater risks and still suffer through multiple failures. The biggest problem is most of that cash came from iPhone revenue and if you remove that, Apple doesn't have much breathing room to take the same amount of risks. Apple is currently placing a bid for Tosibia's memory business that could cost up to $30 billion dollars.

macspoofing 10y ago
A cash horde isn't very helpful if your business is tanking. It prolongs the pain but doesn't fix anything. Ask Yahoo.
- mikhailt 10y ago
  Nor does investing pointlessly or burning the money. Nothing is a sure fix for tanking businesses. Yahoo didn't do anything to help themselves, there's nothing innovative or useful about them. Google, Facebook, Twitter, Instagram is what is draining the life away from Yahoo.
- thanksgiving 10y ago
  > A cash horde isn't very helpful if your business is tanking. It prolongs the pain but doesn't fix anything. Ask Yahoo. I was (in hindsight, correctly) skeptical of MM and her gang's effort to pull more eyeballs into Y! with things like Tumblr and in smaller extent bringing in people like Katie Couric and David Pogue. Personally, I don't know what Yahoo! is and that makes me hard to tell whether they're doing the right thing at all. As much as we love to hate MM, I don't know if any of us could do any better. Apple, I sort of get what they are. They are a hardware company that (at least presently) sells phones for $800 that has a bill of materials of about $250. They can use the rest of the margin to make the phone as appealing to consumers as possible. Everything else is a side show. (sorry mac fans) Now where does Apple go from here? I think about the narrative in the iPhone ten year anniversary podcast (listened to it because it was on the front page of HN so thanks to whoever submitted it) that Apple had to cannibalize its iPod business and started thinking about at least two years before the iPhone was released. Unpopular opinion but I think it is unlikely that Apple will get the next big thing right. I don't think self-driving cars will not be a high margin business. Yes, I want electric cars and self-driving cars to become mainstream because I want one for myself. There's no way I will buy a $60k+ car in the next five years. But I digress. Like what I read from what GP said, I think Apple will likely fail not once but multiple times. It is easy to forget the bad old days: > Since then there has been a lot of noise and shouting, but little has changed. The smaller dealership continues to sell sleek Euro-styled sedans and to spend a lot of money on advertising campaigns. They have had GOING OUT OF BUSINESS! signs taped up in their windows for so long that they have gotten all yellow and curly. The big one keeps making bigger and bigger station wagons and ORVs. from in the beginning was the command line by neal stephenson http://cristal.inria.fr/~weis/info/commandline.html http://cristal.inria.fr/~weis/info/commandline.html
- petra 10y ago
  Yahoo did invest it's cash horde in Ali-Baba, and it's worth quite a bit.
revelation 10y ago
I'm sure it is someones $246B job to figure that out, because right now they are not doing much anything beyond managing the iPhone. If you have that much money, it means you didn't "take greater risks and suffer through multiple failures" in the years preceding. Buying Toshibas memory business.. that again seems like some bean counters incremental improvement on their iPhone margins. They are going to incrementally improve themselves to death if they can't figure out something new.
- mikhailt 10y ago
  That's been Apple since the beginning. They always incrementally improve their stuff. They've never the first to invent and they're always late. > If you have that much money, it means you didn't "take greater risks and suffer through multiple failures" in the years preceding. So Apple Watch? Is that a success or failure? The $3 billion+ purchase of Beats? That everyone said was going to be a waste of money? AirPods? Mac Pro redesign was a failure. The car business that could easily burn through several tens of billions? There's nothing truly innovative about Apple that no one can replicate but Apple is lucky lately with more people buying more of their stuff like 20m Apple Music subs, popular AirPods, Apple Watch, etc.
  - valuearb 10y ago
    Apple Watch was a huge success, $6B in sales first year alone, best selling watch in world by revenues. Beats? Can't tell from outside, but I'm still skeptical. AirPods? Reviews have actually been great, much better than first impressions. Sales? Who knows. Mac Pros actually probably made good money for Apple, but strategically was an awful decision. They milked the form factor for sales, likely sell around $500M a year of it without any upgrades/investment for now 4 years. But given it was a poor solution for most Pro users, it's sales are just a symptom of a ton of pent up demand that Apple isn't meeting. Plus the loss of users abandoning the platform because the top end was capped so low. The car business is a puzzle and unlikely to ever turn out well. Apple is truly innovative in the best ways possible, which is why it's so successful. Xerox invented GUI computing, Apple figured out how to make it work much better and fit it into a $2,000 box the masses could use. MP3 players were around for years, Apple made them far more usable. Tablet computers were in development ever since Go in the 90s, no one every cracked it for mass markets until the iPhone and iPad. Apple's attention to detail with the proximity sensor and multitouch and a dozen other innovations is what made a touchscreen phone finally usable (and why Google ripped all the keyboards off their Android prototypes the day after they saw the iPhone).
akuma73 10y ago
As a shareholder, they should raise the dividend. If you can't find opportunity to invest the money, it should be returned to the shareholders. I'm all for keeping cash around for a rainy day or for future opportunities but not 33% of your market cap. That is an absurd misallocation of capital.
- valuearb 10y ago
  I expect if a bill passes significantly lowering the tax rate on repatriated profits that Apple will pay a large one time dividend to shareholders. But until then those profits are trapped overseas. Apple can borrow against them to pay dividends, but that only goes so far.
  - dharma1 10y ago
    Or share buybacks, which I imagine management will push for
- srtjstjsj 10y ago
  If investors agreed with you, the stock price would drop and it would increase to even more than 33% of market cap

macspoofing 10y ago

A cash horde isn't very helpful if your business is tanking. It prolongs the pain but doesn't fix anything. Ask Yahoo.

mikhailt 10y ago
Nor does investing pointlessly or burning the money. Nothing is a sure fix for tanking businesses. Yahoo didn't do anything to help themselves, there's nothing innovative or useful about them. Google, Facebook, Twitter, Instagram is what is draining the life away from Yahoo.
thanksgiving 10y ago
> A cash horde isn't very helpful if your business is tanking. It prolongs the pain but doesn't fix anything. Ask Yahoo. I was (in hindsight, correctly) skeptical of MM and her gang's effort to pull more eyeballs into Y! with things like Tumblr and in smaller extent bringing in people like Katie Couric and David Pogue. Personally, I don't know what Yahoo! is and that makes me hard to tell whether they're doing the right thing at all. As much as we love to hate MM, I don't know if any of us could do any better. Apple, I sort of get what they are. They are a hardware company that (at least presently) sells phones for $800 that has a bill of materials of about $250. They can use the rest of the margin to make the phone as appealing to consumers as possible. Everything else is a side show. (sorry mac fans) Now where does Apple go from here? I think about the narrative in the iPhone ten year anniversary podcast (listened to it because it was on the front page of HN so thanks to whoever submitted it) that Apple had to cannibalize its iPod business and started thinking about at least two years before the iPhone was released. Unpopular opinion but I think it is unlikely that Apple will get the next big thing right. I don't think self-driving cars will not be a high margin business. Yes, I want electric cars and self-driving cars to become mainstream because I want one for myself. There's no way I will buy a $60k+ car in the next five years. But I digress. Like what I read from what GP said, I think Apple will likely fail not once but multiple times. It is easy to forget the bad old days: > Since then there has been a lot of noise and shouting, but little has changed. The smaller dealership continues to sell sleek Euro-styled sedans and to spend a lot of money on advertising campaigns. They have had GOING OUT OF BUSINESS! signs taped up in their windows for so long that they have gotten all yellow and curly. The big one keeps making bigger and bigger station wagons and ORVs. from in the beginning was the command line by neal stephenson http://cristal.inria.fr/~weis/info/commandline.html http://cristal.inria.fr/~weis/info/commandline.html
petra 10y ago
Yahoo did invest it's cash horde in Ali-Baba, and it's worth quite a bit.

revelation 10y ago

I'm sure it is someones $246B job to figure that out, because right now they are not doing much anything beyond managing the iPhone. If you have that much money, it means you didn't "take greater risks and suffer through multiple failures" in the years preceding. Buying Toshibas memory business.. that again seems like some bean counters incremental improvement on their iPhone margins. They are going to incrementally improve themselves to death if they can't figure out something new.

mikhailt 10y ago
That's been Apple since the beginning. They always incrementally improve their stuff. They've never the first to invent and they're always late. > If you have that much money, it means you didn't "take greater risks and suffer through multiple failures" in the years preceding. So Apple Watch? Is that a success or failure? The $3 billion+ purchase of Beats? That everyone said was going to be a waste of money? AirPods? Mac Pro redesign was a failure. The car business that could easily burn through several tens of billions? There's nothing truly innovative about Apple that no one can replicate but Apple is lucky lately with more people buying more of their stuff like 20m Apple Music subs, popular AirPods, Apple Watch, etc.
- valuearb 10y ago
  Apple Watch was a huge success, $6B in sales first year alone, best selling watch in world by revenues. Beats? Can't tell from outside, but I'm still skeptical. AirPods? Reviews have actually been great, much better than first impressions. Sales? Who knows. Mac Pros actually probably made good money for Apple, but strategically was an awful decision. They milked the form factor for sales, likely sell around $500M a year of it without any upgrades/investment for now 4 years. But given it was a poor solution for most Pro users, it's sales are just a symptom of a ton of pent up demand that Apple isn't meeting. Plus the loss of users abandoning the platform because the top end was capped so low. The car business is a puzzle and unlikely to ever turn out well. Apple is truly innovative in the best ways possible, which is why it's so successful. Xerox invented GUI computing, Apple figured out how to make it work much better and fit it into a $2,000 box the masses could use. MP3 players were around for years, Apple made them far more usable. Tablet computers were in development ever since Go in the 90s, no one every cracked it for mass markets until the iPhone and iPad. Apple's attention to detail with the proximity sensor and multitouch and a dozen other innovations is what made a touchscreen phone finally usable (and why Google ripped all the keyboards off their Android prototypes the day after they saw the iPhone).

akuma73 10y ago

As a shareholder, they should raise the dividend. If you can't find opportunity to invest the money, it should be returned to the shareholders. I'm all for keeping cash around for a rainy day or for future opportunities but not 33% of your market cap. That is an absurd misallocation of capital.

valuearb 10y ago
I expect if a bill passes significantly lowering the tax rate on repatriated profits that Apple will pay a large one time dividend to shareholders. But until then those profits are trapped overseas. Apple can borrow against them to pay dividends, but that only goes so far.
- dharma1 10y ago
  Or share buybacks, which I imagine management will push for
srtjstjsj 10y ago
If investors agreed with you, the stock price would drop and it would increase to even more than 33% of market cap