Tim Served Up Apple’s Cash Pie In Diet Slices
There had been a bit of a build-up in the press, looking forwards to Apple’s 19th March announcement of how it intends to spend its cash mountain of $250+ billion. Nice problem to have and the media had some fairly whacky suggestions for how the Cupertino coffers might be flushed onto a grateful world. These included giving every employee a Cessna, paying it’s Chinese workers a bonus, building “another Internet” or delivering cutting-edge research. All charming stuff but the announcement from CEO Tim Cook and CFO Peter Oppenheimer went down the expected path (released 30 minutes before the press call on March 19th anyway) and offered up something tasty to the shareholders.
Apple intends to pay dividends in the order of 1.8% yield (around $2.60 per share) quarterly. It also plans to meet future employee share scheme allocations with shares bought back from the open market (around $10 billion). That leaves a healthy domestic cash pot for acquisitions and for good corporate practice. Peter Oppenheimer avoided answering what Apple intends to do with its foreign (i.e. non-USA) cash pile of $100bn which he otherwise says cannot be brought onshore due to the huge, ensuing tax liability. Nothing fishy here, I imagine, just a lack of ideas.
All solid and sensible stuff. Dull and (arguably) predictable, it is the wise path to tread with so much money and recognises that Apple is doing bloody well and needs to keep doing well. It needs to keep its employees happy. It needs to keep shareholders happy. It needs to sustain its share price by maintaining interest in its shares – and perhaps presages lean times (and by this I mean ‘quieter times’ – fewer new product announcements ). Stuff that would have been verboten when Steve Jobs was around.
The background noise of media speculation – quieter of late – still expects a new TV product from Apple, plus a more evolved business model for programme distribution. But what else could come out of Cupertino ? Sir Jony Ive can design a beauty, Tim Cook can build it and deliver it – no question – but who will actually think of that next big thing for Apple ? Listening to their corporate press conference, it was like listening to an IBM, a Microsoft, a British Telecom, a modern corporate drone. I am disappointed that the question is not being asked – the press has gone back to sleep after this unimaginative and eminently sensible announcement from Cook on cash. Could Apple just decay or bloat into another Microsoft, bereft of ideas with the cupboard filled by Jobs plundered and bare. Hope not.
- Apple to pay dividend, start stock buybacks (goerie.com)
- Apple Makes the Right Choice with its Cash Reserves (beta.fool.com)
- Did Apple Do the Right Thing? (thestreet.com)
- Apple: No dividend for Tim Cook (slashgear.com)