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I don't recall whether this was ever stated explicitly, but I always had the impression that this is one of the elements of Apple's strategy that is still drive

I don't recall whether this was ever stated explicitly, but I always had the impression that this is one of the elements of Apple's strategy that is still driven by the tribal memory of the late 1990s turmoil. Both Steve Jobs and Tim Cook were there at the time, and especially the former (who also had witnessed a 1980s bust) was determined to never be in this position again. So as a consequence: * Apple is hoarding cash to an extent that business analysts dislike (although Tim has reduced this to some extent) * Teams are being run leaner than they'd like to be (not nearly as much so as in the pre-iOS times, admittedly) * Conversely, since the company builds good reserves and not too much bloat in good times, it can and will avoid overreacting to bad times.

ethanbond 4y ago
So essentially the basics of building any resilient system. Sad that our market economy punishes this approach in the general case.
- danieljacksonno 4y ago
  Punishes? Apple is the most highly valued company of all.
  - acdha 4y ago
    They’re also an outlier and a lot of what they do would be judged more harshly by analysts and activist shareholders if they weren’t so profitable. The question should be how we get more companies like Apple.
    - andsoitis 4y ago
      I wouldn’t want to invest my money, my retirement funds in companies that don’t strive to be highly profitable. Do you?
      - acdha 4y ago
        The answer to that depends on the timeframe and your risk tolerance: a lot of cryptocurrency people said FTX was profitable, too, right up until it wasn't. When you're talking about retirement funds, the timeframe is long enough that you have to think about how stable something is and whether the profits you're seeing will continue. There isn't a recipe for “highly profitable” and you need to consider both the quality of the leadership and whether they share the same goals you have: there are many companies which were bought by a private equity firm who “improved efficiency” by slashing costs and milking the existing customers for as much revenue as possible. If you're the PE guy who cashes out early in that process, this is highly profitable. If you're the retail investor with some shares in your retirement account, you likely had the opposite experience.
        andsoitis 4y ago
        Of course you need to take other things into account as well besides current profitability, such as your trust in management’s ability to steer, for long term product/service foothold, etc. I was juts making the point that all else being equal, you wouldn’t invest in a company that doesn’t try to make handsome profit, which was the suggestion. And Apple makes handsome profit, and then some.
  - ethanbond 4y ago
    Right, and they are absolutely an exception. The general expectation for any company is to milk the daylights out of every quarter they can. Either put your money back into growth or hand it back to investors - cash reserves bad even though they obviously allow you to weather things (like we’re discussing here).
valleyer 4y ago
This is all true, but > not nearly as much so as in the pre-iOS times, admittedly deserves better than a parenthetical. Zoom out, and Apple's been on a serious hiring binge for the last decade, from 72,800 employees in 2012 to 164,000 in 2022. (Both numbers include retail; in 2012, 58% were retail, and they don't seem to break it down anymore in 2022.)
- DoughnutHole 4y ago
  So their staffing has increased by a factor of about 2.25 while their revenue has increased by a factor of 2.5 - doesn’t sound so much like a binge as the company steadily scaling up.
- blululu 4y ago
  The market cap has grown by ~10x in that time and the number of products that the company makes/maintains has also increased a lot in that time (both number of products and total unit volume). Doubling the staff does not seem unreasonable given the obvious increase business.
- alxhill 4y ago
  On the other hand, Facebook went from about 4,000 employees to over 70,000 in the same time period, so given how much Apple's business has grown in the last decade (when they released the iPhone 5) it seems pretty impressive that they grew only ~2x.
- wil421 4y ago
  How many are retail employees? I’ve seen 3 Apple stores open in my large city alone and we already had 3.
asdff 4y ago
Why does apple hoard cash instead of buy back their stock? 5 years ago they had 90 billion cash in hand. If they put that into their stock then, It would be up at least 260% by now even with the losses last year, then if they need cash they could just take a loan against the stock.
- deleted 4y ago
  [deleted]
- arockwell 4y ago
  They actually have done massive stock buybacks. The company is just an incredible money printer.
  - matwood 4y ago
    As is often said, 'Toyota volume with Ferrari margins'.
- dpkirchner 4y ago
  Looks like they spent a lot more than that on buybacks in the past decade: > Since 2012, Apple has been buying back its own shares at an extraordinary rate -- Apple is known for spending more on share repurchases than similar tech giants like Meta or Alphabet. Apple's total share repurchases have totaled $274.5 billion, with just $20.4 billion in the December quarter. > Apple spent $85.5 billion to repurchase shares in 2021, and issued $14.5 billion in dividends. https://appleinsider.com/articles/22/04/28/apple-extends-share-buybacks-by-90b-raises-dividends-by-10/amp/ https://appleinsider.com/articles/22/04/28/apple-extends-sha...
- BbzzbB 4y ago
  Apple's buyback program probably has no equal, it's a sight to behold which demonstrates the power of sustained share repurchases. Sure, there are the Teledyne stories, but to do it at this scale is something else. https://www.macrotrends.net/stocks/charts/AAPL/apple/shares-outstanding https://www.macrotrends.net/stocks/charts/AAPL/apple/shares-...
MuffinFlavored 4y ago
are they earning 4% on their cash?
DrBazza 4y ago
The pile of cash just reminds me of Carl Icahn and others. It's "fortunate" that Apple is so highly valued that a corporate raider can't purchase a controlling interest and pay out to investors. [1] https://en.wikipedia.org/wiki/Asset_stripping https://en.wikipedia.org/wiki/Asset_stripping
- estsauver 4y ago
  Carl Icahn has actually been a quite prominent investor in apple at times and has been quite vocal about what apple does below the line.
deltarholamda 4y ago
Apple is a real company. Amazon, Twitter, even Microsoft to some extent are not. Apple makes things. The software side works with it, but it's a hardware company. They aren't entirely dependent on conjuring up value out of thin air, they have supply chains and manufacturing and whatnot. Even Amazon, which deals with physical objects, doesn't really make anything.
- JKCalhoun 4y ago
  I had a moment of enstartlement (note to auto-correct: I made up the word, okay?) the other day. I get a lot of vintage/retro computing videos in my YouTube feed — I realized how odd it was that Apple was one of the few (only?) 8-bit computer companies still around. And around in an impossible-to-ignore kind of way. But only just barely missed going under back in the late 1990's. What a strange timeline.
- herculity275 4y ago
  > Even Amazon, which deals with physical objects, doesn't really make anything. Echo, Kindle, Blink and Fire TV product lines would beg to disagree.
  - OJFord 4y ago
    And there's presumably some amount of liasing/branding/QA/etc. that goes on with suppliers of AmazonBasics, Amazon Commercial, and other house lines. And anyway surely warehousing & distribution is just as much a 'real' (=traditional? physical?) company activity as running a factory?
- bthater 4y ago
  Maybe I am missing a point, but both Amazon and Microsoft have devices that they manufacture and distribute. While they may not be profitable at the price they are sold they provide value to customers that isn't conjured from air. Additionally they also sell access to data services, while the data may not by physical, the data centers are physical objects that are designed and built by both AWS and Microsoft.
- 4y ago

ethanbond 4y ago

So essentially the basics of building any resilient system. Sad that our market economy punishes this approach in the general case.

danieljacksonno 4y ago
Punishes? Apple is the most highly valued company of all.
- acdha 4y ago
  They’re also an outlier and a lot of what they do would be judged more harshly by analysts and activist shareholders if they weren’t so profitable. The question should be how we get more companies like Apple.
  - andsoitis 4y ago
    I wouldn’t want to invest my money, my retirement funds in companies that don’t strive to be highly profitable. Do you?
    - acdha 4y ago
      The answer to that depends on the timeframe and your risk tolerance: a lot of cryptocurrency people said FTX was profitable, too, right up until it wasn't. When you're talking about retirement funds, the timeframe is long enough that you have to think about how stable something is and whether the profits you're seeing will continue. There isn't a recipe for “highly profitable” and you need to consider both the quality of the leadership and whether they share the same goals you have: there are many companies which were bought by a private equity firm who “improved efficiency” by slashing costs and milking the existing customers for as much revenue as possible. If you're the PE guy who cashes out early in that process, this is highly profitable. If you're the retail investor with some shares in your retirement account, you likely had the opposite experience.
      - andsoitis 4y ago
        Of course you need to take other things into account as well besides current profitability, such as your trust in management’s ability to steer, for long term product/service foothold, etc. I was juts making the point that all else being equal, you wouldn’t invest in a company that doesn’t try to make handsome profit, which was the suggestion. And Apple makes handsome profit, and then some.
- ethanbond 4y ago
  Right, and they are absolutely an exception. The general expectation for any company is to milk the daylights out of every quarter they can. Either put your money back into growth or hand it back to investors - cash reserves bad even though they obviously allow you to weather things (like we’re discussing here).

valleyer 4y ago

This is all true, but > not nearly as much so as in the pre-iOS times, admittedly deserves better than a parenthetical. Zoom out, and Apple's been on a serious hiring binge for the last decade, from 72,800 employees in 2012 to 164,000 in 2022. (Both numbers include retail; in 2012, 58% were retail, and they don't seem to break it down anymore in 2022.)

DoughnutHole 4y ago
So their staffing has increased by a factor of about 2.25 while their revenue has increased by a factor of 2.5 - doesn’t sound so much like a binge as the company steadily scaling up.
blululu 4y ago
The market cap has grown by ~10x in that time and the number of products that the company makes/maintains has also increased a lot in that time (both number of products and total unit volume). Doubling the staff does not seem unreasonable given the obvious increase business.
alxhill 4y ago
On the other hand, Facebook went from about 4,000 employees to over 70,000 in the same time period, so given how much Apple's business has grown in the last decade (when they released the iPhone 5) it seems pretty impressive that they grew only ~2x.
wil421 4y ago
How many are retail employees? I’ve seen 3 Apple stores open in my large city alone and we already had 3.

asdff 4y ago

Why does apple hoard cash instead of buy back their stock? 5 years ago they had 90 billion cash in hand. If they put that into their stock then, It would be up at least 260% by now even with the losses last year, then if they need cash they could just take a loan against the stock.

deleted 4y ago
[deleted]
arockwell 4y ago
They actually have done massive stock buybacks. The company is just an incredible money printer.
- matwood 4y ago
  As is often said, 'Toyota volume with Ferrari margins'.
dpkirchner 4y ago
Looks like they spent a lot more than that on buybacks in the past decade: > Since 2012, Apple has been buying back its own shares at an extraordinary rate -- Apple is known for spending more on share repurchases than similar tech giants like Meta or Alphabet. Apple's total share repurchases have totaled $274.5 billion, with just $20.4 billion in the December quarter. > Apple spent $85.5 billion to repurchase shares in 2021, and issued $14.5 billion in dividends. https://appleinsider.com/articles/22/04/28/apple-extends-share-buybacks-by-90b-raises-dividends-by-10/amp/ https://appleinsider.com/articles/22/04/28/apple-extends-sha...
BbzzbB 4y ago
Apple's buyback program probably has no equal, it's a sight to behold which demonstrates the power of sustained share repurchases. Sure, there are the Teledyne stories, but to do it at this scale is something else. https://www.macrotrends.net/stocks/charts/AAPL/apple/shares-outstanding https://www.macrotrends.net/stocks/charts/AAPL/apple/shares-...

MuffinFlavored 4y ago

are they earning 4% on their cash?

DrBazza 4y ago

The pile of cash just reminds me of Carl Icahn and others. It's "fortunate" that Apple is so highly valued that a corporate raider can't purchase a controlling interest and pay out to investors. [1] https://en.wikipedia.org/wiki/Asset_stripping https://en.wikipedia.org/wiki/Asset_stripping

estsauver 4y ago
Carl Icahn has actually been a quite prominent investor in apple at times and has been quite vocal about what apple does below the line.

deltarholamda 4y ago

Apple is a real company. Amazon, Twitter, even Microsoft to some extent are not. Apple makes things. The software side works with it, but it's a hardware company. They aren't entirely dependent on conjuring up value out of thin air, they have supply chains and manufacturing and whatnot. Even Amazon, which deals with physical objects, doesn't really make anything.

JKCalhoun 4y ago
I had a moment of enstartlement (note to auto-correct: I made up the word, okay?) the other day. I get a lot of vintage/retro computing videos in my YouTube feed — I realized how odd it was that Apple was one of the few (only?) 8-bit computer companies still around. And around in an impossible-to-ignore kind of way. But only just barely missed going under back in the late 1990's. What a strange timeline.
herculity275 4y ago
> Even Amazon, which deals with physical objects, doesn't really make anything. Echo, Kindle, Blink and Fire TV product lines would beg to disagree.
- OJFord 4y ago
  And there's presumably some amount of liasing/branding/QA/etc. that goes on with suppliers of AmazonBasics, Amazon Commercial, and other house lines. And anyway surely warehousing & distribution is just as much a 'real' (=traditional? physical?) company activity as running a factory?
bthater 4y ago
Maybe I am missing a point, but both Amazon and Microsoft have devices that they manufacture and distribute. While they may not be profitable at the price they are sold they provide value to customers that isn't conjured from air. Additionally they also sell access to data services, while the data may not by physical, the data centers are physical objects that are designed and built by both AWS and Microsoft.
4y ago