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So I get the idea is that Apple is returning cash because shareholders can likely earn more than what Apple is earning on its cash. But doesn't that also read:

by hosh 13y ago

So I get the idea is that Apple is returning cash because shareholders can likely earn more than what Apple is earning on its cash. But doesn't that also read: Apple doesn't have any major new (ipod-level or iphone-level) thing in its pipeline, so it is unlikely to make use of a war chest effectively?

yapcguy 13y ago
Yes, I agree. Steve Jobs refused to pay dividends, he built a war chest for a rainy day. He was opinionated. On the other hand, Tim Cook is weak. Instead of pumping money into R&D he is courting Wall Street. Dividends. Stock buy-back. Tim Cook was hyped up as a slick operator, an operations guy who built up Apple's supply chain to be super efficient. Truth is, he is/was no better than any other operations guy using an Asian based supply chain. Look at the problems with the iPad Mini Retina screen which have yellow streaks, or the image retention burning laptop screens, or delay in iMacs, or sneaking a couple of Mac Pro units out at Christmas.
- jonknee 13y ago
  > On the other hand, Tim Cook is weak. Instead of pumping money into R&D he is courting Wall Street. Dividends. Stock buy-back. Tim Cook has both pumped money into R&D and into dividends/repurchase... According to their filings, R&D spending (in fiscal years): 2013 - $4.48B 2012 - $3.38B 2011 - $2.43B 2010 - $1.78B He has also put a ton of money into operations (paying for factories, locking in huge volumes of components, all available air freight capacity, etc etc). And a ton of money into Apple Stores. At the end of the day $40B is a lot of cash to put to work. Apple could hire 1,000 engineers at a cost of $250,000 per year and it would only be 0.625% of $40B (and it's actually more like $50B because that would be pre-tax). 10,000 engineers is still not far off from a rounding error. Apple is waiting around until Democrats will let them bring back cash without a tax hit and then they'll make a special dividend. No financing magic needed.
  - yapcguy 13y ago
    Thanks for correcting me on the R&D, I was under the impression (based on product output) that nothing had changed and had in fact worsened. I still don't rate Tim Cook though - he allowed Maps out of the gate. Scott Forstall took the fall for that one, but Tim Cook was ultimately responsible.
    - ghshephard 13y ago
      ...And Steve Jobs let MobileMe out of the gate. If you rate anyone based on a few missteps instead of the aggregate of their performance, you are missing the big picture.
      - yapcguy 13y ago
        That's a fair point, although he did hire that British guy to head up retail... only to then fire him after just a few months. Let's see how he does in 2014.
    - gress 13y ago
      Maps launched poorly, but the alternative - not launching it at all, or delaying it, may well have been considerably worse. That's why Cook let it out of the gate, but fired the engineering manager responsible.
    - lostlogin 13y ago
      Heh, was talking about this today. A big MRI manufacturer's manager has been widely quotes in my little world as comparing their crashing/non functional MRI scanner software update to the Maps drama. Not sure how the two situations are related, but a crashing and non functional MRI scanner is kind of a big deal when you are sick. Mapping software not so much.
  - kirtijthorat 13y ago
    I understand everything but "Apple Is waiting until Democrats will let them..." Really?
- drumdance 13y ago
  R&D spending is up 32% from last year. http://www.theverge.com/2013/10/30/5045894/apple-research-and-development-cost-2006-2013 http://www.theverge.com/2013/10/30/5045894/apple-research-an...
kirtijthorat 13y ago
Not exactly but your point does raises the BIG question i.e. "Apple doesn't have any major new (iPod or iPhone level) thing in its pipeline". Yes, I agree with you on this front. Apple seriously needs a new game changing product for long-term investors faith in it. For the past 2 years they haven't launched anything radical except the iterations of their product line. Also, the upcoming iWatch (according to online reports) doesn't excite me at all as too much saturation already in market. The next product gotta be something that consumers will love it and will it use on daily basis.
- glhaynes 13y ago
  It was over five years between the iPod and the iPhone's introduction, then another three between the iPhone and the iPad. Apple's R&D spending has been ramping up sharply over the last few years (see figures posted in another comment). Hang tight.
  - 2muchcoffeeman 13y ago
    No to mention the fact that just because you have money for R&D, doesn't mean that there's enough projects and ideas to use that money effectively. Throwing more money at existing projects probably won't make them go faster either.

by hosh 13y ago

yapcguy 13y ago

Yes, I agree. Steve Jobs refused to pay dividends, he built a war chest for a rainy day. He was opinionated. On the other hand, Tim Cook is weak. Instead of pumping money into R&D he is courting Wall Street. Dividends. Stock buy-back. Tim Cook was hyped up as a slick operator, an operations guy who built up Apple's supply chain to be super efficient. Truth is, he is/was no better than any other operations guy using an Asian based supply chain. Look at the problems with the iPad Mini Retina screen which have yellow streaks, or the image retention burning laptop screens, or delay in iMacs, or sneaking a couple of Mac Pro units out at Christmas.

jonknee 13y ago
> On the other hand, Tim Cook is weak. Instead of pumping money into R&D he is courting Wall Street. Dividends. Stock buy-back. Tim Cook has both pumped money into R&D and into dividends/repurchase... According to their filings, R&D spending (in fiscal years): 2013 - $4.48B 2012 - $3.38B 2011 - $2.43B 2010 - $1.78B He has also put a ton of money into operations (paying for factories, locking in huge volumes of components, all available air freight capacity, etc etc). And a ton of money into Apple Stores. At the end of the day $40B is a lot of cash to put to work. Apple could hire 1,000 engineers at a cost of $250,000 per year and it would only be 0.625% of $40B (and it's actually more like $50B because that would be pre-tax). 10,000 engineers is still not far off from a rounding error. Apple is waiting around until Democrats will let them bring back cash without a tax hit and then they'll make a special dividend. No financing magic needed.
- yapcguy 13y ago
  Thanks for correcting me on the R&D, I was under the impression (based on product output) that nothing had changed and had in fact worsened. I still don't rate Tim Cook though - he allowed Maps out of the gate. Scott Forstall took the fall for that one, but Tim Cook was ultimately responsible.
  - ghshephard 13y ago
    ...And Steve Jobs let MobileMe out of the gate. If you rate anyone based on a few missteps instead of the aggregate of their performance, you are missing the big picture.
    - yapcguy 13y ago
      That's a fair point, although he did hire that British guy to head up retail... only to then fire him after just a few months. Let's see how he does in 2014.
  - gress 13y ago
    Maps launched poorly, but the alternative - not launching it at all, or delaying it, may well have been considerably worse. That's why Cook let it out of the gate, but fired the engineering manager responsible.
  - lostlogin 13y ago
    Heh, was talking about this today. A big MRI manufacturer's manager has been widely quotes in my little world as comparing their crashing/non functional MRI scanner software update to the Maps drama. Not sure how the two situations are related, but a crashing and non functional MRI scanner is kind of a big deal when you are sick. Mapping software not so much.
- kirtijthorat 13y ago
  I understand everything but "Apple Is waiting until Democrats will let them..." Really?
drumdance 13y ago
R&D spending is up 32% from last year. http://www.theverge.com/2013/10/30/5045894/apple-research-and-development-cost-2006-2013 http://www.theverge.com/2013/10/30/5045894/apple-research-an...

kirtijthorat 13y ago

Not exactly but your point does raises the BIG question i.e. "Apple doesn't have any major new (iPod or iPhone level) thing in its pipeline". Yes, I agree with you on this front. Apple seriously needs a new game changing product for long-term investors faith in it. For the past 2 years they haven't launched anything radical except the iterations of their product line. Also, the upcoming iWatch (according to online reports) doesn't excite me at all as too much saturation already in market. The next product gotta be something that consumers will love it and will it use on daily basis.

glhaynes 13y ago
It was over five years between the iPod and the iPhone's introduction, then another three between the iPhone and the iPad. Apple's R&D spending has been ramping up sharply over the last few years (see figures posted in another comment). Hang tight.
- 2muchcoffeeman 13y ago
  No to mention the fact that just because you have money for R&D, doesn't mean that there's enough projects and ideas to use that money effectively. Throwing more money at existing projects probably won't make them go faster either.