5 ms·

> They have so much cash they could buy Disney outright if they wanted to. Think about that for a second... Yeah and they don't. Why don't they buy Tesla? Why

> They have so much cash they could buy Disney outright if they wanted to. Think about that for a second... Yeah and they don't. Why don't they buy Tesla? Why don't they buy Disney? Why don't they attempt to reinvent home construction which is a stagnant for the most part? Why aren't they the next Bell labs? Why not reinvent major home appliances most of which are a huge drag and a dumpster fire of usability? "This changes everything" was their tagline for a phone. Why stop at the phone? Why not redesign everything? Why stop at a nice looking HQ, why not create Castalia? Why not create a house of study and give one hundred architects and designers a rest-of-their-life pension and see what they come up with? Because it might cost too much? Why not pick a hard problem of any kind and actually tackle it? Because Q3 might look bad? Is that why? Why don't they do anything ambitious with that hoard? Really ambitious. Not hire more CS students for machine learning and deciding which iPad to kill next to make Q3 look the best. If you ponder the existence of money-to-imagination ratio, Apple is dead last. They are guilty of all the interesting things they do not do. Just an astonishing lack of real vision.

throwawayknecht 9y ago
> Why stop at a nice looking HQ, why not create Castalia? Castalia was an isolationist academy where young men spent all their time studying glass toys they falsely believed modeled all art and history, while the rest of the world slowly collapsed around it. Apple's already built that.
abritinthebay 9y ago
I’m trying to work out if you’re serious or satirizing someone who believes this nonsense. That’s not a failure of imagination - that’s business focus.
- simonsarris 9y ago
  I am serious. What good does it do for AAPL's business focus to sit on cash for years? The management paralysis is only made more obvious by the cash hoard. Even their existing products (pro desktop) they let languish. If you don't have the imagination and need a past example, consider the success of AWS. The project was born out of Bezo's edict early on in the creation of Amazon that everything the company does internally must be able to be turned into a service. Almost every analyst in 2006 was against the idea, it was not at all a business focus at the time and Bezos himself admitted it would not be a forseeable revenue stream: > Stifel Nicolaus & Co. (SF ) analyst Scott W. Devitt notes: "There's not going to be any economic return from any of these projects for the foreseeable future." Bezos himself admits as much. ... "We think it's going to be a very meaningful business for us one day," he says. "What we've historically seen is that the seeds we plant can take anywhere from three, five, seven years." From this 2006 story: https://www.bloomberg.com/news/articles/2006-11-12/jeff-bezos-risky-bet https://www.bloomberg.com/news/articles/2006-11-12/jeff-bezo... Plenty of people call AWS obvious now, and it's easy to fall into that mindset. It's worth remembering that almost everyone back then thought it was a big folly. Why burn the cash making AWS? What's the business focus? In 2011(or 2010?) AWS revenue was still listed in the "Other" column on their 10K, even though it was by then their #1 area of growth. Now? It's a sea of pure profit. The scale of the success surprised even Bezos, but he had enough imagination to take real risks anyway. What's the difference between a hobby, a folly, and the future?
  - ZenoArrow 9y ago
    In the case of Apple not branching out more quickly, I'd say they're doing it to protect their brand image. For better or for worse, that's probably their strongest asset.
  - brandonmenc 9y ago
    > What good does it do for AAPL's business focus to sit on cash for years? To be able to vertically integrate at a moment's notice.
  - shalmanese 9y ago
    Apple has run itself as a functional org as opposed to a divisional org and regards that as a key differentiating factor that provides it sustainable competitive advantage. But one of the key constraints of functional orgs is that they require incredible focus and discipline or the entire structure breaks down. Apple doesn't have iPhone marketing and iPad marketing that report to the boss of iPhone and iPad respectively, they just have Apple marketing that is in charge of making Apple better and reports to the boss of Apple. That's a huge reason why they were able to self-cannibalize their most successful product so ruthlessly. Because there was no iPod boss who's bonus depended on iPod sales and would throw grit in the wheels of any rival projects. But you can only do this when every single employee is able to hold the entire corporate business model in their head. You think Apple would do better under a more divisional structure. That's fine, the pros and cons of functional vs divisional have been debated for ages. But it's also a moot point because Apple is never going to switch to a divisional structure and without switching to one, they can't do all the things you want them to do.
loueed 9y ago
Just because we can't publicly see what Apple is developing doesn't mean they're not being innovative. Apple, Microsoft, Facebook, MagicLeap and Google are all betting big on Augmented Reality. Apple has acquired Primesence, the company behind the Kinect, HoloLens sensors and Project Tango. Everyone else bought licences to use Primesence IP. In September, iOS 11 will allow 100s of millions of iPhones and iPads to use AR apps which is important for when they eventually want to sell these customers Smartglasses. I also expect Apple to build a next-gen Siri in the near future. One that can intelligently program its way out around natural language. Similar to the Samsung acquired Viv.ai I plan on buying a Model 3 in a few years but I think Apple has bigger plans for autonomous driving. Their physical car project has been shelved, for now, turns out it's pretty hard to build a car company with in an already established computer company. Autonomous driving system in the works, which could put them in the position to partner with other car companies, implementing CarKit and Self driving branded by Apple.
rsync 9y ago
"Why don't they buy Tesla? Why don't they buy Disney? Why don't they attempt to reinvent home construction which is a stagnant for the most part?" I think it's worth considering that prices for assets just might be a little high right now. I have no idea what Apple is doing and don't have any specific insights but I have, in the past few years, found myself passing on certain growth and investment opportunities because I felt the prices were quite high relative to what I think the prices could be in the next 3-5 years. Why buy Disney now when you can buy two of them a few years from now ? On the flip side, I think there is some political risk for Apple here in sitting on too large of a cash horde ... there is a point when the amount of money becomes too big to ignore, politically. Consider that a 1% taking of some form amounts to almost $3B. At some point someone will figure out how to structure such a taking ...
- doingmyting 9y ago
  Please note that if the price of these potentially acquirable companies fall, the value of Apple and its cash hoard will fall along with them. Apple doesn't exist within a vacuum.
- fragmede 9y ago
  > I think it's worth considering that prices for assets just might be a little high right now. Have you seen what Apple charges for their products?
shalmanese 9y ago
People use cash as a shorthand but it's not literally dead cash sitting in a bank account. That $250B is sitting in index funds and T bills where it's indirectly funding all of those businesses that are investing in sustainable housing and improved appliances and a billion other things. Apple just believes those companies have a better shot at accomplishing those goals than Apple does and it's fine letting them continue.
- wavefunction 9y ago
  >>Apple just believes those companies You want us to believe Apple is a charity now? Pretty sure it's more about paying repatriation taxes.
MaysonL 9y ago
I wonder how much (if any) of their cash is invested in Tesla convertible debt? Apple has been bumping up their R&D spend (not even including their acquisitions) by 20% or more annually for quite a few years: it's now up to around 5% of revenue (hard to calculate exactly, given the seasonality of their revenue). So far they've created at least 4 absolute breakthrough products, 4 more than most Fortune 500 companies ever achieve, including the most successful product ever (1.2 billion sold).
SeoxyS 9y ago
The right thing for a company like Apple to do with extra cash (other than dividends and buybacks) is to invest it. There's only so much innovation it can do as a single entity… but as a VC firm (à-la Google Ventures) or as an LP (into Sequoia, KPCB, etc.) or as diversified fund (à-la Berkshire Hathaway) it can drive more value for its shareholder and more innovation through investing capital. Note, this is pretty much what Apple is doing.

throwawayknecht 9y ago

> Why stop at a nice looking HQ, why not create Castalia? Castalia was an isolationist academy where young men spent all their time studying glass toys they falsely believed modeled all art and history, while the rest of the world slowly collapsed around it. Apple's already built that.

abritinthebay 9y ago

I’m trying to work out if you’re serious or satirizing someone who believes this nonsense. That’s not a failure of imagination - that’s business focus.

simonsarris 9y ago
I am serious. What good does it do for AAPL's business focus to sit on cash for years? The management paralysis is only made more obvious by the cash hoard. Even their existing products (pro desktop) they let languish. If you don't have the imagination and need a past example, consider the success of AWS. The project was born out of Bezo's edict early on in the creation of Amazon that everything the company does internally must be able to be turned into a service. Almost every analyst in 2006 was against the idea, it was not at all a business focus at the time and Bezos himself admitted it would not be a forseeable revenue stream: > Stifel Nicolaus & Co. (SF ) analyst Scott W. Devitt notes: "There's not going to be any economic return from any of these projects for the foreseeable future." Bezos himself admits as much. ... "We think it's going to be a very meaningful business for us one day," he says. "What we've historically seen is that the seeds we plant can take anywhere from three, five, seven years." From this 2006 story: https://www.bloomberg.com/news/articles/2006-11-12/jeff-bezos-risky-bet https://www.bloomberg.com/news/articles/2006-11-12/jeff-bezo... Plenty of people call AWS obvious now, and it's easy to fall into that mindset. It's worth remembering that almost everyone back then thought it was a big folly. Why burn the cash making AWS? What's the business focus? In 2011(or 2010?) AWS revenue was still listed in the "Other" column on their 10K, even though it was by then their #1 area of growth. Now? It's a sea of pure profit. The scale of the success surprised even Bezos, but he had enough imagination to take real risks anyway. What's the difference between a hobby, a folly, and the future?
- ZenoArrow 9y ago
  In the case of Apple not branching out more quickly, I'd say they're doing it to protect their brand image. For better or for worse, that's probably their strongest asset.
- brandonmenc 9y ago
  > What good does it do for AAPL's business focus to sit on cash for years? To be able to vertically integrate at a moment's notice.
- shalmanese 9y ago
  Apple has run itself as a functional org as opposed to a divisional org and regards that as a key differentiating factor that provides it sustainable competitive advantage. But one of the key constraints of functional orgs is that they require incredible focus and discipline or the entire structure breaks down. Apple doesn't have iPhone marketing and iPad marketing that report to the boss of iPhone and iPad respectively, they just have Apple marketing that is in charge of making Apple better and reports to the boss of Apple. That's a huge reason why they were able to self-cannibalize their most successful product so ruthlessly. Because there was no iPod boss who's bonus depended on iPod sales and would throw grit in the wheels of any rival projects. But you can only do this when every single employee is able to hold the entire corporate business model in their head. You think Apple would do better under a more divisional structure. That's fine, the pros and cons of functional vs divisional have been debated for ages. But it's also a moot point because Apple is never going to switch to a divisional structure and without switching to one, they can't do all the things you want them to do.

loueed 9y ago

Just because we can't publicly see what Apple is developing doesn't mean they're not being innovative. Apple, Microsoft, Facebook, MagicLeap and Google are all betting big on Augmented Reality. Apple has acquired Primesence, the company behind the Kinect, HoloLens sensors and Project Tango. Everyone else bought licences to use Primesence IP. In September, iOS 11 will allow 100s of millions of iPhones and iPads to use AR apps which is important for when they eventually want to sell these customers Smartglasses. I also expect Apple to build a next-gen Siri in the near future. One that can intelligently program its way out around natural language. Similar to the Samsung acquired Viv.ai I plan on buying a Model 3 in a few years but I think Apple has bigger plans for autonomous driving. Their physical car project has been shelved, for now, turns out it's pretty hard to build a car company with in an already established computer company. Autonomous driving system in the works, which could put them in the position to partner with other car companies, implementing CarKit and Self driving branded by Apple.

rsync 9y ago

"Why don't they buy Tesla? Why don't they buy Disney? Why don't they attempt to reinvent home construction which is a stagnant for the most part?" I think it's worth considering that prices for assets just might be a little high right now. I have no idea what Apple is doing and don't have any specific insights but I have, in the past few years, found myself passing on certain growth and investment opportunities because I felt the prices were quite high relative to what I think the prices could be in the next 3-5 years. Why buy Disney now when you can buy two of them a few years from now ? On the flip side, I think there is some political risk for Apple here in sitting on too large of a cash horde ... there is a point when the amount of money becomes too big to ignore, politically. Consider that a 1% taking of some form amounts to almost $3B. At some point someone will figure out how to structure such a taking ...

doingmyting 9y ago
Please note that if the price of these potentially acquirable companies fall, the value of Apple and its cash hoard will fall along with them. Apple doesn't exist within a vacuum.
fragmede 9y ago
> I think it's worth considering that prices for assets just might be a little high right now. Have you seen what Apple charges for their products?

shalmanese 9y ago

People use cash as a shorthand but it's not literally dead cash sitting in a bank account. That $250B is sitting in index funds and T bills where it's indirectly funding all of those businesses that are investing in sustainable housing and improved appliances and a billion other things. Apple just believes those companies have a better shot at accomplishing those goals than Apple does and it's fine letting them continue.

wavefunction 9y ago
>>Apple just believes those companies You want us to believe Apple is a charity now? Pretty sure it's more about paying repatriation taxes.

MaysonL 9y ago

I wonder how much (if any) of their cash is invested in Tesla convertible debt? Apple has been bumping up their R&D spend (not even including their acquisitions) by 20% or more annually for quite a few years: it's now up to around 5% of revenue (hard to calculate exactly, given the seasonality of their revenue). So far they've created at least 4 absolute breakthrough products, 4 more than most Fortune 500 companies ever achieve, including the most successful product ever (1.2 billion sold).

SeoxyS 9y ago

The right thing for a company like Apple to do with extra cash (other than dividends and buybacks) is to invest it. There's only so much innovation it can do as a single entity… but as a VC firm (à-la Google Ventures) or as an LP (into Sequoia, KPCB, etc.) or as diversified fund (à-la Berkshire Hathaway) it can drive more value for its shareholder and more innovation through investing capital. Note, this is pretty much what Apple is doing.