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AAPL Stock: 111.78 ( -0.87 )

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Apple coffers filled to over $15 billion

updated 10:25 am EST, Fri December 7, 2007

Apple hoards $15+ billion

Apple is hoarding more money than virtually any other tech company in the United States, regulatory findings show. The company currently holds $15.4 billion in unused reserves, more money than even IBM, Intel or Google. Only Microsoft and Cisco have a greater amount, and nearly a third of Apple's stockpile -- $5 billion -- was added in just the last year. This is in part because the company does not pay dividends, buy major companies, or repurchase much stock.

It is not clear what Apple is planning to do with the money, which would let it buy companies as big as TiVo or Circuit City and still have sizable funds leftover. Apple CFO Peter Oppenheimer has only explained that its reserves help finance bigger ventures, and that the company occasionally discusses various means of returning money to shareholders, such as the aforementioned share buyback.

Apple may well decide to acquire more small businesses, in line with previous acquisitions such as Emagic, Nothing Real and Zayante. It could alternately make strategic investments in other companies, as it did with Akamai and ARM Holdings. It is rumored though that Apple may be joining Google in bidding for the 700MHz wireless spectrum, which could allow it to build a data network fully independent of AT&T.

It is known that Apple intends to build a new campus near its Cupertino headquarters, designed to group together engineers otherwise based in isolated offices. The development could cost in excess of $500 million, in part because it has to demolish buildings already present at the site, and possibly because it may use a unique design to reflect Apple's perceived status.




by MacNN Staff

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Comments

  1. psdenno

    Joined: Dec 1969

    0

    the 500 million dollar...

    new office campus should be no big deal with 15 Billion in the bank. Interest on that @ 5% is 750 million a year, so it makes for a nice real estate write-off. Go Apple!

  1. David Esrati

    Joined: Dec 1969

    0

    Things Apple should buy

    TiVo, Netflix, and then merge with Google. Then, Steve and Co. need to adopt Google's "Do no evil" mantra- and add "design for beauty and utility" to it- and have a company that can really deliver a whole media/entertainment/work package.

  1. climacs

    Joined: Dec 1969

    0

    nice to know

    that Apple is not deep in hock.

    One of the reasons I bought AAPL back when you could have it for a song, was that the company - which, if IIRC - had about $4 billion cash on hand, which worked out to about $13 a share. So, I bought the company's goodwill and future earning potential for $6.50 a share, and the worst that could possibly happen would be that they'd liquidate and I'd lose 1/3 of my money.

    (well I guess someone could have pissed all that money away, but that did not seem likely)

  1. climacs

    Joined: Dec 1969

    0

    merge with Google?

    Not sure that would pass muster with anti-trust laws. Plus if Apple and Google merged, I don't think that would sit well with Microsoft. Better to have them working hand-in-hand behind the scenes.

  1. JackWebb

    Joined: Dec 1969

    0

    Ready for big purchases

    How much more does Apple have to save to buy Microsoft and put an end to Windows? Probablby a ton more. Just daydreaming here.

  1. paulc

    Joined: Dec 1969

    0

    Source of Wealth

    Not paying dividends certainly is a factor, but a very small factor. What most fanbois don't know is that companies selling products that have a 10% gross margin, if tightly run, make money. Apple typically prices it's products close to a 30% GM, which is so far above most any other company that it is not at all surprising they have such a huge pile of cash.

    A 30% margin literally screams overpriced products.

  1. dliup

    Joined: Dec 1969

    0

    re: paulc

    It's not about margin. It's about usability. Better products = people willing to pay more.

  1. darkelf

    Joined: Dec 1969

    0

    beleaguered

    only $15 billion? they're dooooooomed!

  1. testudo

    Joined: Dec 1969

    0

    Re: merge with google

    Not sure that would pass muster with anti-trust laws. Plus if Apple and Google merged, I don't think that would sit well with Microsoft. Better to have them working hand-in-hand behind the scenes.

    What anti-trust laws? Last time I checked, there was very little overlap in their business models/money making schemes.

    Others might not like it (like MS), but its not like Google would be merging with Yahoo or something.

  1. slider

    Joined: Dec 1969

    0

    Past Lessons

    It was, in part, due to the fact that Apple had such large reserves of cash in the late 90's and early 00's that Apple was able to keep it's head above water. Apple would be wise to continue to have a large reserve (albeit 15B might be a little on the high side) especially in light of a weakening economy....... for more reasons than the immediately obvious.

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