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Fortune Ponders Apple's $15 Billion Cash

Fortune Ponders Apple's $15 Billion Cash

by , 2:50 PM EST, December 7th, 2007

Apple has US$15.4B in cash. One has to start wondering what Apple will do with it, according to Fortune on Friday. Apple has made some small aquisitions on the past, however, that $15B could buy a lot.

Unlike some of the other big technology companies, like Microsoft, Apple doesn't pay dividends on its stock. So the money just keeps accumulating.

One clue would be to look at history. Apple has purchased some smaller companies to buy its way into key technology markets: PowerSchool for education and Emagic, a video effects company. Some of those acquisitions have not paid off, and Apple sold PowerSchool last year.

Another option is to buy back stock, but Apple has only set aside US$500M for that and spent only $217M of it, a small fraction of its cash. An often overlooked project is Apple's consolidated new offices which could cost $500M when completed.

A final possibility is that Steve Jobs could think big. "Consider this," Fortune proposed. "Just for kicks, with the money burning a hole in Apple’s pocket, he could easily buy TiVo, Netflix and Circuit City, and still have plenty left in the bank."

TMO notes, however, that Apple will probably focus on companies that know how to make big money, not lose it.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:Guest
Subject: Apple's Investment Company

Didn't Apple start its own investment company a year or two ago? Or maybe a separate entity to invest its cash? I seem to remember something along those lines...

Close Name:jimothy Posts: 612 Joined: 04 Jun 2004
Subject: Buy me a 8-core Mac Pro

And a pair of 30" Cinema Displays. I'm not sure what they'll do with the rest of the loot, but that sounds like a good start to me. Steve, are you listening?

Close Name:Guest
Subject:

I wish Apple would buy Thursby and finally integrate its superior networking into Mac OS.

Close Name:Guest
Subject:

I don't think Emagic were a video effects company, actually.

Close Name:Guest
Subject: Emagic

Hi,

Just a small correction : Emagic was not a video effects company.
It was the maker of Logic, the sequencer that is now Logic Studio.

Close Name:Guest
Subject: How about...

If they need help spending the dough I sure could use some help paying off my student loans.

Close Name:coaten Posts: 3071 Joined: 10 Oct 2001
Subject:

I believe they're gonna hold on to it to buy their way out of law suits. Seems every week a new patent case pops up. When you've got that many billions, you have the luxury of saying, "OK, so the lawyers failed, never mind ... make 'em an offer they can't resist."

Close Name:Guest
Subject: re: Emagic

The video effect company Apple bought was Nothing Real, makers of Shake.

Close Name:chrisrb Posts: 2 Joined: 25 Aug 2007
Subject: Apple should buy Adobe!

Apple should buy Adobe.

The best way to guarantee the survival of the Mac platform and OS 10 revenue is to create a solid deterrent to Microsoft's possible threat to stop producing Office for Mac.

"You're going to stop offering Office on the Mac platform? Fine. We'll stop offering Photoshop and Dreamweaver on the PC Platform."

Owning Adobe would allow Apple to say this, effectively neutralizing the potential death threat that Microsoft now holds over Apple's head with regard to the Mac platform.

I can't think of a better way to secure the Mac's future against the MS threat that'll always be there unless and until Apple has the ability to counter with a similar threat of their own to aim at the PC platform.

How much could Adobe cost? Surely, with $15B+ in the bank, Apple can afford it ... and wouldn't it be a good investment, anyway?

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