[lpkmckenna]

Ars Technica: Apple to announce plans for $100 billion cash pile on Monday.

This is what I posted at Ars:

Apple could buy Yahoo, Twitter, or Netflix. Maybe.

Apple might co-purchase Yahoo with Facebook, giving both Facebook and Apple access to all those patents. Apple would assume control of Flickr, Yahoo Maps, and Yahoo Mail. Facebook would assume control of Yahoo News and Yahoo search. (I don't think Apple is interested in search.)

Apple could buy Adobe, and spin off Adobe assets that have no value to Apple (i.e. Flash).

Apple *should* buy Epic Games. (I've been preaching this for years.) Epic could run as an independent subsidiary like Filemaker does, making both Windows and Mac software, and ensuring that the Unreal Engine's future on the Mac and iOS is bright. If Apple folded the Unreal Engine into Xcode, it would be truly awesome.

Apple is probably buying assets that will make their entry into television much easier. And maybe Apple is planning their own cable/internet network, which would be pretty awesome.

[Wiskedjak]

Oh, I *really* hope Apple doesn't assume control of Flickr. I would really miss Flickr.

[The Godfather]

You guys are thinking too small. What apple should do is build an ultra automated iDevice factory in a right to work state and wipe the competition with a made in the united states marketing, while only importing screws and resistors from China. The workers will be handsomely paid, so they can buy up the abovementioned iDevices

[turtle777]

Dividend announced. That's it.

-t

[lpkmckenna]

Originally Posted by turtle777 

Dividend announced. That's it.

That's sounds like a silly reason to have a press conference.

[turtle777]

Uhm, yeah, maybe.

But it's not like Apple had some silly press conferences in the past.

-t

[Cold Warrior]

Originally Posted by lpkmckenna 

That's sounds like a silly reason to have a press conference.

it's a conference call not a press conference, so it's more business postured not so much RDF on stage.

[Brien]

Probably a dividend, but buying Yahoo would be a good move. They'd get patents, maps and search to lose dependency on Google, plus get Flickr.

[gradient]

Originally Posted by lpkmckenna 

Apple is probably buying assets that will make their entry into television much easier. And maybe Apple is planning their own cable/internet network, which would be pretty awesome.

I'd be shocked if it happened but Apple buying NBC Universal would be seriously awesome.

[mduell]

To everyone saying a dividend, are you thinking one-time or ongoing?

[turtle777]

Originally Posted by mduell 

To everyone saying a dividend, are you thinking one-time or ongoing?

Ongoing. A one-time dividend would be silly, given Apple's future cash flows.

-t

[Big Mac]

I'd love to see some substantial expansion of the business into a new frontier. A dividend makes sense given how much legal tender Apple rakes in now, but if it's just a dividend and nothing more then I'd be concerned that the Cook Doubters are right about the company being out of big ideas and vision without SJ.

[mduell]

Keep in mind a ton of this cash is overseas to avoid the repatriation costs. Perhaps Obama will personally blow Tim for a $35B contribution to the US Treasury; funds the feds for 4 days!

My top picks:
1) Buy Foxconn and pay all the employees a living-not-in-dorms wage.
2) Loan it to Greece at 3%
3) Loan it to Italy at 2%
4) Buy a third of Walmart.

[Big Mac]

Originally Posted by mduell 

Keep in mind a ton of this cash is overseas to avoid the repatriation costs. Perhaps Obama will personally blow Tim for a $35B contribution to the US Treasury

I didn't know Tim was gay. Besides, a $35B fork over to the bankrupting Feds is good for around one week of death-icit spending.

[Salty]

I'm not super excited about Apple paying out a dividend. I'd sooner see them investing the money into other stuff rather than paying out the money back to wall street. Especially given the current climate towards investors.

I'd love to see them buy Adobe and have them operate as a subsidiary. Though really that would have been more useful ten years ago. Frankly it'd probably be best if they just invested a couple million into Pixelmator and company. Or if they just got Auto Desk to commit to making a CS competitor.

My guess is that they're not going to stray from what they're good at by much so it'll probably be something boring like a dividend.

[Big Mac]

I was going to mention buying Adobe in this thread, but I think that idea (which I was talking about at Macworld the year Keynote debuted) is one which time has passed.

I don't know why some people are so opposed to an Apple dividend, though. Apple can certainly afford it without breaking a sweat or compromising on anything else it could wish to do. I just hope it's dividend plus something else.

[Shaddim]

Originally Posted by mduell 

Keep in mind a ton of this cash is overseas to avoid the repatriation costs. Perhaps Obama will personally blow Tim for a $35B contribution to the US Treasury; funds the feds for 4 days!

My top picks:
1) Buy Foxconn and pay all the employees a living-not-in-dorms wage.
2) Loan it to Greece at 3%
3) Loan it to Italy at 2%
4) Buy a third of Walmart.

Heh, tossing $100B at the feds would be like throwing a glass of water on a forest fire.

[lpkmckenna]

Originally Posted by Big Mac 

I didn't know Tim was gay.

Um, Tim Cook IS gay.

Anyways, the press seems convinced this is nothing but a dividend announcement. They're probably right. But that's boring. I want something exciting to happen!

[Mrjinglesusa]

Confirmed.

Quarterly $2.65/share dividend and $10 billion stock buy-back over 3 years.

[Big Mac]

Originally Posted by lpkmckenna 

Um, Tim Cook IS gay.

You know, similies are often thrown in as cues to the humor impaired. Such as you.

[mduell]

The market is unimpressed. Stock moved up less than 3 quarters worth of dividends.

[ort888]

$45 billion over the next three years will most likely just keep their money pit exactly where it is.

[mduell]

They're only using US cash for dividend and repurchase, leaving the $65B hanging in foreign lands.

[Big Mac]

Just watched our old friend Rob Enderle on FBN (the "chief analyst" of his own presumably single person analyst firm) do what he does best - make himself look stupid by badmouthing Apple's dividend/buyback choices today. He thinks it's part of a pattern of Cook being softer and less product focused than SJ; he even criticized Cook's recently enacted philanthropic policies. He argued that Apple is going to be at war this year with Windows 8 (I'm sure Apple's quaking over that clusterfark in progress) and Google and that using cash in this fashion is a weak move that reduces the company's ability to win going forward. He also claimed he "spoke to Canada" and heard that there were no lines for the new iPad, in addition to margin concerns and overheating stories.

It sounded really dumb, but I'll say to his credit, I went back and did a search of the Forums for the Enderle keyword to look at some of his past claims about Apple: Sometimes he gets certain things right in spite of himself. He was among the earliest blowhards to predict that Apple would move to Intel, which he did when the original G5s were launched. He's a tool to be sure, but I hope he isn't right about his broader point this time. His claim about Apple not having enough cash because it will be blowing it with these moves is clearly hollow given how much Apple earns. But is Apple going to be less aggressive and more conventional in the future?

[besson3c]

Originally Posted by Salty 

I'm not super excited about Apple paying out a dividend. I'd sooner see them investing the money into other stuff rather than paying out the money back to wall street. Especially given the current climate towards investors.

I'd love to see them buy Adobe and have them operate as a subsidiary. Though really that would have been more useful ten years ago. Frankly it'd probably be best if they just invested a couple million into Pixelmator and company. Or if they just got Auto Desk to commit to making a CS competitor.

My guess is that they're not going to stray from what they're good at by much so it'll probably be something boring like a dividend.

Why should Apple buy out Adobe?

Apple doesn't need to assume for responsibility for applications important to the platform. As long as they keep their platform healthy, there will be people vying for the opportunity to assume these responsibilities. Where there are healthy money making potentials there will almost always be companies interesting in capitalizing.

Apple needs to continue to focus on what it does best, not stretch itself too thin by focusing on things outside of the core focus of the company. Staying true to their focus is what got Apple this far, I don't see any reason to stray from this.

Besides, it's not like the state of the Adobe CS line on the Mac is really in dire straits, it's doing relatively fine.

[besson3c]

For that matter, I'm not even really sure what compelled Apple to make iWork. Maybe they figured that Keynote would propel Apple's marketing, and that developing a spreadsheet app and word pro app to go along with it would be low dangling fruit?

It still doesn't make an awful lot of sense to me though.

[Big Mac]

Apple felt it needed to have its own suite to compete with Office.

[Waragainstsleep]

Originally Posted by besson3c 

Staying true to their focus is what got Apple this far, I don't see any reason to stray from this.

Not sure I agree with this. The Mac was originally a professional tool and remained exactly that for a very long time. Apple has gotten where it is by abandoning that in favour of becoming a predominantly consumer company with fewer and fewer pro tools available.

[ort888]

Apple doesn't want to have to rely on any other company.

That's why they are also developing their own map software.

[besson3c]

On thinking the question of why iWork exists through some more, I have two theories that I like more than competing against Office just because, or having an office product available as insurance in case MS ever decides to pull the plug.

Rationale 1: Apple never really care much about iWork on OS X, but was developing it and improving it knowing that iPad would some day exist, and Apple wanted to hit the ground running with an office product available on or near launch day

Rationale 2: a word pro and spreadsheet are just what one expects with any operating these days, so Apple wanted to include their own version and bundle it with new Macs rather than having to pay Microsoft for a license


The insurance policy doesn't make sense to me, because if Apple were really scared of MS pulling the plug on Mac Office, competing with them would seem like the counter-intuitive thing to do rather than working on their product internally and releasing it only after MS has made this official announcement.

[besson3c]

Originally Posted by Waragainstsleep 

Not sure I agree with this. The Mac was originally a professional tool and remained exactly that for a very long time. Apple has gotten where it is by abandoning that in favour of becoming a predominantly consumer company with fewer and fewer pro tools available.

I'm not saying that their focus hasn't mutated over the years, but as a business you have to stay close to your focus - whatever it is at that given time.

Questioning the existence of iWork is probably not the best question to append to this thought process, better examples would be Final Cut or Aperture, perhaps.

[Spheric Harlot]

Originally Posted by Waragainstsleep 

Not sure I agree with this. The Mac was originally a professional tool and remained exactly that for a very long time.

No it wasn't.

Macintosh was an office computer, and much more than that, the original slogan was "The Computer for the Rest of Us."

[The Godfather]

Microsoft purposely prevents MS Office competitors from achieving acceptable compatibility by refusing to publish their file format. The only way to compel them is to threaten them with harm, such as buying Adobe and hinting that the Mac Photoshop will be the only one with updates and Creative Suite will bundle iTunes.

[besson3c]

Originally Posted by The Godfather 

Microsoft purposely prevents MS Office competitors from achieving acceptable compatibility by refusing to publish their file format. The only way to compel them is to threaten them with harm, such as buying Adobe and hinting that the Mac Photoshop will be the only one with updates and Creative Suite will bundle iTunes.

That may or may not be a good idea, but has Apple ever played those sort of chess games with other companies this way?

[el chupacabra]

If it were me Id try to buy comcast since the cable companies aren't wanting to deal with apple.

[besson3c]

Originally Posted by el chupacabra 

If it were me Id try to buy comcast since the cable companies aren't wanting to deal with apple.

No offense intended, but this idea is 100 times worse than the idea to buy Adobe.

What does Apple know about running a cable TV provider and ISP? Why on Earth would they assume liability for a company completely outside of the scope of Apple? Sure, they'd probably split it off so that it is completely partitioned from the rest of the company, but they'd still have to manage it and understand the industry well enough to do so, and have enough experience in the industry to manage it effectively.

Moreover, Comcast is one of the most despised companies in America, why would Apple want to get anywhere near this?

Companies don't just swallow up other companies like it is a board game. Mergers and takeovers are extremely complicated, many don't work very well at all. You can't just recommend that Apple get all takeover happy while hoping and expecting Apple to retain its edge, which has involved being very intensely focused on doing a few things exceedingly well rather than doing a bunch of things in a mediocre fashion.

Hell, Apple won't even get into making server stuff which is probably lower dangling fruit than running a cable TV company, an ISP, or a battered software company with arguably a single cash cow product.

[besson3c]

If Adobe had a star product on the rise, *perhaps* they'd be a compelling company to buy out for somebody, but I think you buy companies because they have assets that can propel the parent company, or they have products that allow you to project profits well into the future, not because you think you have the skills to resurrect a company that has seen better days and has no obvious long term future.

[Waragainstsleep]

Originally Posted by Spheric Harlot 

No it wasn't.

Macintosh was an office computer, and much more than that, the original slogan was "The Computer for the Rest of Us."

We all know ease of use has been a hallmark from day one, but the Mac was a professional tool for designers and creative types (who didn't want to write code or use CLI) from the start. Home users didn't really see the need for computers back then, most of them were business machines. Steve Jobs put a lot of effort into fonts and such specifically to capture/create the market for DTP and creative pros.

[el chupacabra]

Originally Posted by besson3c 

No offense intended, but this idea is 100 times worse than the idea to buy Adobe.

What does Apple know about running a cable TV provider and ISP?

Nothing. Thats why they would buy a company that does know... That's what big companies do.

Why on Earth would they assume liability for a company completely outside of the scope of Apple?

I don't know if you've been following the news but Apple is expected to come out with a TV. One where you would choose your channel or show as an app at any time of day you choose; and pay by the show/channel. At least thats what the cable companies are saying their talks with Apple have been about. This would revolutionize the entertainment sector as we know it, and you know it. I don't know why you'd say it's outside the scope of Apple... They decided to do get into the TV industry. This whole TV with the apps thing puts Apple directly INSIDE the scope of big cable...

Sure, they'd probably split it off so that it is completely partitioned from the rest of the company, but they'd still have to manage it and understand the industry well enough to do so, and have enough experience in the industry to manage it effectively.

Your personifying corporations; a mistake many people make. They are not people, they don't go to school and learn and don't require experience. Large companies acquire industry understanding by assimilating smaller companies. Like how Continental airlines was tired of paying for food and catering to Chelsy so they just bought the company and removed the middle man profit. What did continental know about food companies?

Moreover, Comcast is one of the most despised companies in America, why would Apple want to get anywhere near this?

Apple desperately wants to have it's own way with how we receive content; problem is they don't have cable lines... They don't have enough money to buy ATT. Buying comcast, one of the biggest cable providers beats burying 300 million new cable line or leasing them from someone else; assuming they're allowed to lease the ones ATT and comcast own. Im not in this industry but just from reading how the cable companies aren't about to budge with Apple it kind of puts them between a rock and hard place.

Companies don't just swallow up other companies like it is a board game. Mergers and takeovers are extremely complicated, many don't work very well at all. You can't just recommend that Apple get all takeover happy while hoping and expecting Apple to retain its edge, which has involved being very intensely focused on doing a few things exceedingly well rather than doing a bunch of things in a mediocre fashion.

It's not like releasing a dividend was a smart thing to do for apple. Apple was more predictable with Jobs in charge; we really don't know where Cook is going considering the short track record. But when companies release dividends it's growth usually slows to stops. What really happened is people on the inside said "hey we're making a lot of cash for our company, we should get a piece of it! lets just cut ourselves a check in the form of a dividend and take it for ourselves." (buy the way that dividend news was released as insider information to the ultra wealthy last week; and I bet no one gets arrested for it; but thats for another topic). As for share buy back that is a necessary thing they have to do if they want to continue to offer stock options for their employees... but it makes for great marketing for people who dont understand business and want to believe apple's doing it because they have such faith in their stock.

Well it's all with a grain of salt none of us know the details of what's going on between apple and the cables but in a nut shell it seems Apple is wanting to contract them for use of their networks yet at the same time compete with their services; which is where buyouts usually happen. Companies buy each other out for lesser reasons. I mean look at GE they make washing machines, jet engines, and lease real-estate etc. its not like they have to have 1 niche.

[Waragainstsleep]

Apple has gotten itself a bit stuck in a way. The cable companies and TV networks are too scared of giving them the control they have over the music industry because they know they are in real danger of becoming irrelevant.

Personally I think Apple has two ways to go. Assuming they still have good relations with Disney, if they buy one of the bigger networks and start putting all that content on offer the way they want to, the rest will probably have to get on board sooner or later.

The other way is to try to cut them out by enlisting or acquiring the production companies that are actually making the content. The production houses. Don't go to JJ Abrams through Fox, go straight to Bad Robot. That kind of thing. This should be pretty compelling in many ways since if Apple then distributed the content as they want to for the new Apple TV product as well as continuing to sell or rent via iTunes, they could also resell back to the existing networks and basically pull all the revenue streams for a given show through one place which would improve the chances of a TV show succeeding since it wouldn't live or die by Nielsen ratings and network ad sales alone, Apple could let them factor in online and other region sales and warn them if they need to cut the budget in order to carry on rather than just pulling the plug abruptly. I'd love to see this but I don't expect to. I'm still slightly surprised that Apple hasn't opened the iTunes music store up to an App store model so anyone can try to sell their music. Its a logistical nightmare to filter out the crap but it would be worth trying to just kill off the record companies and the RIAA. And Simon Cowell.

[Salty]

Apple developed iWork because first they had Keynote which was made simply because Jobs hated Power Point. Next they sold Keynote because they realized they could make some extra cash and lots of people bought it. It also became something that people who used Macs got to show off the cool things they made with a product you can't get on PC.

Once that happened they probably realized just how willing people were to have a non-Microsoft office product done well, so they did Pages to round out the suite. Next they did numbers because, well why not?

iWork was one of those things where Apple didn't mean for it to be a huge success but eventually rolled with it when they realized how much value it added for little money. I think it also helped that Microsoft never freaked out over it.

[residentEvil]

I'd like to see that $100B, all in loose singles. Just to see it/the volume it would take up. Fill a football/soccer stadium?

[Waragainstsleep]

Maybe.

US debt visualized: Stacked in 100 dollar bills @ 15 Trillion Dollars - Equal to US GDP 2011

[The Godfather]

MS has both reasons to freak out about iWork and not to freak out. iWork is nowhere near a replacement for Office in work environments because it doesn't have all the features that have become a necessity in the office. On the other hand, home mac users will never give a second thought on buying office when perfectly fine alternatives are available for little or no cost.

You could think that MS Works was the functionality and market model adopted by those who made iWork, with the quality that Apple could provide.

What could Apple do with 100BN? The only sensible choices are Netflix and Skype. The former does not need to be bought, since they are already in a win win relationship. Skype, now owned by Microsoft, should be bought because they are the only VoIP that works over 3G, but MS and anybody knows Skype value too well: over 300 billion dollars (at least, that's what it's worth to me).

Giving a dividend is a boneheaded move by Apple, for whatever reasons they claim. If it is to attract new investors, they have just sold the farm (the cold hard cash) for "market capitalization", an ethereal number that could fizzle up and extinguish in the whims of a volatile market. Really, boneheaded.
Watch Apple's market cap, today at half a trillion dollars, increase as they bleed dividends at 10% per year. Is it worth it? For market value, under the thumb of capitalist, greed-is-good, for-profit shareholders.

Market cap is debt. Debt is slavery.
Cash is freedom. Freedom is not free.

[Waragainstsleep]

Originally Posted by The Godfather 

iWork is nowhere near a replacement for Office in work environments because it doesn't have all the features that people think have become a necessity in the office.

Fixed.

[boy8cookie]

Originally Posted by Waragainstsleep 

Fixed.

Revisions.

[Spheric Harlot]

This is purely anecdotal and personal experience, but I don't think Microsoft has added anything to Word since ca. 1992 that is of even the *slightest* relevance to anybody who isn't actually sitting in an Office doing stuff built around an Office workflow.

If I had had iWork in 1989, I would have never needed to bother with Word, at all, ever (though of course, Word 5.1 was pretty damn good).

[besson3c]

Originally Posted by Spheric Harlot 

This is purely anecdotal and personal experience, but I don't think Microsoft has added anything to Word since ca. 1992 that is of even the *slightest* relevance to anybody who isn't actually sitting in an Office doing stuff built around an Office workflow.

If I had had iWork in 1989, I would have never needed to bother with Word, at all, ever (though of course, Word 5.1 was pretty damn good).

I thought Clippy was kind of neat.

[Spheric Harlot]

Clippy didn't show up until 1997 on Windows, and 1998 on Mac.

[besson3c]

How do you remember such things?