Design Con 2015

Apple Fumbles the Cash Question

NO RATINGS
View comments: threaded view | newest first | oldest first
TaimoorZ
User Rank
Supply Network Guru
Possible options
TaimoorZ   1/25/2012 9:57:33 AM
NO RATINGS

Bolaji, what do you think are some of the ways Apple can utitlize the surplus pile of cash effectively? Would you suggest an option which involves pumping the cash back into business, or would it be better to acquire a company and look to diversify?

rohscompliant
User Rank
Production Synthesizer
Re: Possible options
rohscompliant   1/25/2012 10:48:05 AM
NO RATINGS

Yes they should diversify ..........and buy my company...........shameless plug ...sorry!

Bolaji Ojo
User Rank
Blogger
Re: Possible options
Bolaji Ojo   1/25/2012 11:11:52 AM
NO RATINGS

rohscompliant, They are looking already at your company. :)

Bolaji Ojo
User Rank
Blogger
Re: Possible options
Bolaji Ojo   1/25/2012 11:11:12 AM
NO RATINGS

TaimoorZ, My next blog is going to be on possible uses for Apple's huge cash.

Hospice_Houngbo
User Rank
Supply Network Guru
Re: Possible options
Hospice_Houngbo   1/25/2012 4:09:05 PM
NO RATINGS

"My next blog is going to be on possible uses for Apple's huge cash."

@Bolaji:

You should send them your proposal/ideas and get paid for that. LOL!

t.alex
User Rank
Supply Network Guru
Re: Possible options
t.alex   1/26/2012 10:49:42 AM
NO RATINGS

Probably it's time for Apple to do some charity work:)

Bolaji Ojo
User Rank
Blogger
Re: Possible options
Bolaji Ojo   1/26/2012 12:13:09 PM
NO RATINGS

I could suggest some outrageous things Apple could do in addition to the philantrophy you mentioned. It may distribute some of the money to employees -- turn them into instant millionnaires! It's not going to happen and I don't expect it.

t.alex
User Rank
Supply Network Guru
Re: Possible options
t.alex   2/1/2012 8:27:39 AM
NO RATINGS

Bolaji, i would think that is a great suggestion. Highly motivated employees can really push the company forward.

Barbara Jorgensen
User Rank
Blogger
Cash
Barbara Jorgensen   1/25/2012 12:55:02 PM
NO RATINGS

I wonder if Apple, true to form, is trying to buck the trend that cash on hand is risky. I'm not a finance expert, but hasn't the idea been that too much cash makes you a takeover target? Although there are companies out there that could buy Apple, I don't see happening. What are the risks from the purely financial standpoint from cash on hand?

Hospice_Houngbo
User Rank
Supply Network Guru
Re: Cash
Hospice_Houngbo   1/25/2012 4:14:48 PM
NO RATINGS

"What are the risks from the purely financial standpoint from cash on hand?"

Apple has more cash on hand than they can handle? Does it mean that they are ripping their customers off by selling their products at a higher price? They may consider lowering their pricing a little bit.

JADEN
User Rank
Stock Keeper
Re: Cash
JADEN   1/25/2012 4:46:05 PM
NO RATINGS

@ Hospice_Houngbo,

I think you are right, they must have ripped off customers by selling their products at higher price.  For having such huge cash, they can easily sell at cheaper price.

Damilare
User Rank
Stock Keeper
Re: Cash
Damilare   1/25/2012 7:10:18 PM
NO RATINGS

I disagree that they are ripping off customers by selling high priced goods, afterall, they do not coerce people to buy their goods

Damilare
User Rank
Stock Keeper
Re: Cash
Damilare   1/25/2012 7:46:06 PM
NO RATINGS

@ Hospice "Apple has more cash on hand than they can handle? Does it mean that they are ripping their customers off by selling their products at a higher price? They may consider lowering their pricing a little bit."

I doubt that Apple will ever reduce their products prices because they have excess cash. The pricing regime itself serves a purpose in attracting consumers and making them believe the 'supposed' value of the gadgets. 

JADEN
User Rank
Stock Keeper
Re: Apple Fumbles the Cash Question
JADEN   1/25/2012 4:42:59 PM
NO RATINGS

If Apple don't know what to do with their huge piled cash, may be they should think of another invention and called it iWorld, since they have iPad, iPhone, etc. Or on a lighter mood, the acquire Microsoft Corporation or Google.

_hm
User Rank
Supply Network Guru
Apple Car Electroincs
_hm   1/25/2012 9:07:07 PM
NO RATINGS

Apple should diversify for auto electronics. This is huge market and there is lot to contribute to make real smart cars.

 

Perhaps, Apple can think of making innovative cars too. It may run for 10hrs on single charge and cover up to 1000 kms!

 

 

 

Bolaji Ojo
User Rank
Blogger
Re: Apple Car Electroincs
Bolaji Ojo   1/26/2012 8:37:22 AM
NO RATINGS

_hm, That would make the company the magician of the electronics/automotive world. Perhaps what you envision is possible but I doubt any company is focussed on that at the moment.

Apple's challenge is that it is in a good market position and for now, the money is "not burning a hole" in the company's pocket as Peter Oppenheimer, the CFO puts it. So, what's the hurry? Right? Keep making great products, lifting the stock value and winning market share -- so what if the result is a bucketload of cash? The money is being properly invested right now.

That logic is good, up to a point. The company is not a bank or an investment firm and unless it wants to become either, it needs to distribute the cash one way or the other and keep building winning products.

Ariella
User Rank
Supply Network Guru
Re: Apple Car Electroincs
Ariella   1/26/2012 8:50:20 AM
NO RATINGS

If what the author contend in this article is true, a good use for Apple's cash would be improving the situation for its suppliers' workers and not squeezing them beyond the point of safety. 

Douglas Alexander
User Rank
Blogger
Re: Apple Car Electroincs
Douglas Alexander   1/26/2012 11:27:56 PM
NO RATINGS

Ariella,

HERE HERE! Apple has such a potential to alter the "evil" big corporation image by deliberate investment in quality of life concerns for anyone that is behind the scenes making it happen. The only thing worse than empire building on the backs of the poor, is adding more ibricks to the same backs. I really like the idea of Apple taking a proactive stance and seeking out and amending any injustices or enequities suffered by their back-end manufacturing and supply support. 

Ariella
User Rank
Supply Network Guru
Re: Apple Car Electroincs
Ariella   1/27/2012 8:42:07 AM
NO RATINGS

@Douglas yes. The usual rationalization for driving a hard bargain on the backs of workers is necessity. But if the company has such a surplus of cash, it really does not have that justification.

Bolaji Ojo
User Rank
Blogger
Re: Apple Car Electroincs
Bolaji Ojo   1/27/2012 10:35:45 AM
NO RATINGS

Ariella, That "necessity" to drive a hard bargain with suppliers and workers can come to be a problem for the company later. The negative press Apple is getting now is not in its overall interest in the long term.

Ariella
User Rank
Supply Network Guru
Re: Apple Car Electroincs
Ariella   1/27/2012 12:24:29 PM
NO RATINGS

@Bolaji, I would think so. But I do know that there are people who are such fans of Apple that they will stick by the brand, no matter what.

nimantha.d
User Rank
Supply Network Guru
Re: Apple Car Electroincs
nimantha.d   1/27/2012 10:57:52 PM
NO RATINGS

Why not because Apple has always invented something for their customers and becasue of that only other companies made money. Steve Jobs may be gone but still I feel his ideas do work and they will keep on working for Apple for a longer period.

Anna young
User Rank
Blogger
Re: Apple Car Electroincs
Anna young   1/29/2012 4:51:37 AM
NO RATINGS

@Ariella, I agree, at least some of Apple's cash can be used to make amends at these factories. That is to ensure safer working practices and other related issues are adhered at the supplier's factories.

Anne
User Rank
Stock Keeper
Re: Apple Fumbles the Cash Question
Anne   1/26/2012 9:04:42 AM
NO RATINGS

I think the logical thing to do with the pile up cash is to make some strategic purchases or expanding its infrastructure in order to maintain their growth.

Mr. Roques
User Rank
Supply Network Guru
Re: Apple Fumbles the Cash Question
Mr. Roques   1/26/2012 5:14:47 PM
NO RATINGS

1) Buy all the glass companies in the World and have control over that.

2) Vertically integrate, buying another companies from their supply chain.

3) Invest in green energy, etc. (technologies that help reduce their costs).

Bolaji Ojo
User Rank
Blogger
Re: Apple Fumbles the Cash Question
Bolaji Ojo   1/27/2012 10:33:23 AM
NO RATINGS

All nice suggestions but Apple will most likely distribute the money to shareholders. This is why many companies are pushing for a tax holiday to repatriate money kept outside the U.S.

Mr. Roques
User Rank
Supply Network Guru
Re: Apple Fumbles the Cash Question
Mr. Roques   2/29/2012 10:07:56 AM
NO RATINGS

What percentage of the cash they hold do you think they will give back to shareholders? 30%? 60%? They would still have plenty of cash to go buy a few things.

tech4people
User Rank
Supply Network Guru
Re: Apple Fumbles the Cash Question
tech4people   1/29/2012 1:34:31 PM
NO RATINGS

Mr.Roques,

Name one Green Energy company that is doing extremely well(and has done so for last 5 years).

Green energy companies have been proven to be an absolute disaster for Shareholders,Taxypayers and employees.

Here's the latest company to bite the dust.

http://thehill.com/blogs/e2-wire/e2-wire/206777-doe-backed-battery-company-files-for-bankruptcy

The Biggest Losers??

Ordinary Taxpayers like you and me.

Regards

Ashish.

Ashish.

Mr. Roques
User Rank
Supply Network Guru
Re: Apple Fumbles the Cash Question
Mr. Roques   2/29/2012 10:59:56 AM
NO RATINGS

Well, they have the luxury that they can test out several technologies. 

tech4people
User Rank
Supply Network Guru
Re: Apple Fumbles the Cash Question
tech4people   2/29/2012 11:24:03 AM
NO RATINGS

Mr.Roques,

Which is probably why Ordinary shareholders in Apple have now won more say in deciding the Board.

Before you decide on(what could be ) foolish acquisitions-Ask what Mr.Shareholder thinks.

This is the way that all companies should function,unfortunately most S&P 500 companies (Tech companies in particular),tend to consider Cash on their Balance sheet as personal assets of the Company CEOs/Board's which they can spend wherever and however they like.

Corporate Governance? Whats that?

Ashish.

Mr. Roques
User Rank
Supply Network Guru
Re: Apple Fumbles the Cash Question
Mr. Roques   5/30/2012 7:56:58 PM
NO RATINGS

Well... They are the Executives for a reason. Who says te stakeholders are right? Or know better?



More Blogs from Bolaji Ojo
Could new extraction technology eliminate the conflict over conflict minerals?
If Apple plans to make a splash in the smart watch market, it will first have to dislodge some innovative products already available from competitors.
With margins extremely tight, contract manufacturers are learning to dump some contracts while expanding services in other areas.
What are electronics manufacturing services providers looking for in their OEM customers?
By moving to the core of the industry and offerings services that keep the system humming, a group within the electronics market has rendered irrelevant the question of ownership and control of the supply chain.

Datasheets.com Parts Search

185 million searchable parts
(please enter a part number or hit search to begin)
EBN Dialogue / LIVE CHAT
EBN Dialogue enables you to participate in live chats with notable leaders and luminaries. Open to the entire EBN community of electronics supply chain experts, these conversations see ideas shared, comments made, and questions asked and answered in real time. Listed below are upcoming and archived chats. Stay tuned and join in!
Upcoming Dialogues
REMIND ME
Live Chat 11/06: Enterprise Risks, Intellectual Property & Supply Chains
Enterprise risk management (ERM) frameworks can be useful to identify, assess, and manage intellectual property (IP) risks that arise in supply chain compliance. We'll look at real-world examples and strategies for mitigating those risks.
11/6/2014
Remind Me
Archived Dialogues
Live Chat 10/30: Top 10 Metrics That Enhance Procurement Performance
We'll be talking about the 10 most important procurement performance metrics, from the old standards to new and emerging best-practices.
Live Chat 10/16: Applying a Macroeconomic Lens to the Supply Chain
EBN blogger Apek Mulay will be our guest as we talk about how macroeconomic reforms have the potential to impact the supply chain.
Latest Poll
EBN Newswire
FORT WORTH, TX   10/24/2014
Allied Electronics Releases 2015 Catalogue
NEU ISENBURG, GERMANY   10/24/2014
Arrow Receives Its First Responsible Recycling ...
Twitter Feed
EBN Online Twitter Feed