What Should Apple Do With a $51 Billion Surplus? Five Ideas
As of November 2010, Apple had about $51 billion in cash and investments. CEO Steve Jobs has hinted that Apple’s war chest would be used for “bold moves only.” Hmmm … What can Apple do with all that money? Here are five potential ways for Apple to spend all that money…
1. Buy Google: Just kidding. As of December 24, 2010, Google’s market capitalization was $193 billion, according to Yahoo Finance. That means Apple would have to dilute its stock to get its hands on Google.
But imagine the possibilities: I would guess that Apple would strip Google down to the bare minimum of Search and AdMob and sell off all the other Google branches. That would solve a lot of patent disputes and it would bring Apple some valuable technology that surely would be assimilated into all Apple products through existing Apple technology like Spotlight and iAds. The fate of Android would hang in the balance of a company such as Nokia, which would most likely pick up that part of Google since Nokia’s Symbian OS has been dying a slow death. Google Docs could go to Microsoft or similar company that then could actually offer something good for free. And what about GMail? Maybe spin it off into its own company, or Apple might also absorb it to make mobile.me mail better.
2. Buy a game development company: I don’t know which one, but Apple could poke around the App Store and find a top developer with some snazzy, glorious, native-building app prowess. That developer could churn out Apple-exclusive games that are gorgeous showcases for the iOS platform. If Apple took that development team and gave them access to the device completely, amazing things could happen.
3. Buy a cellular service provider or cell phone maker: Seriously, Apple should man up and buy a small provider. The company can still have the iPhone on AT&T, but it could have its own pricing plans plus control over the cellular technology and deployment. Call it AppleCell or re-use the AppleTalk name. T-Mobile USA would be a good candidate, since jailbroken iPhones frequently are used on the T-Mobile network. But Apple would need to pry T-Mobile away from its German parent, Deutsche Telekom.
4. Build a generic version of Mac OS X: This is low on the list for obvious reasons because Apple will almost never build out Mac OS X to run on non-standard hardware. Still, it wouldn’t take $50 billion to invest in writing some drivers for support of more hardware. I think Apple could recoup its investment by selling a ‘generic’ version of Mac OS X for double or triple what it costs just for a Mac version. And I think it would sell incredibly well. A lot of people love Mac OS X but can’t afford the hardware — or would rather just have the ease of building and supporting their own hardware set.
5. Do nothing, keep saving: Microsoft’s biggest downfall was its over-extending ‘me-too’ attitude that has lead the company to more vaporware, dead-ends and half-baked software than I can think of. As a result, a lot of its primary technology (e.g., Windows, Windows Mobile) suffered and Microsoft is now playing catchup to the rest of the industry. Apple and Steve Jobs are right to only spend on “bold moves,” because the laser-focus of the company’s goals are what keep it churning out amazing products.
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All bad ideas. You obviously don’t understand what makes Apple, Apple. Take the purchase of a cellular service for example. Do you really think Apple would do something to jeopardize their relationships with other cellular services? If they purchased a small service they would risk alienating themselves due to being able to offer lower prices and all the other benefits. One of the reasons Apple is so successful is because they are very focused. So, when you throw out ideas on how to spend this cash hoard, try to keep it within the realm of their strategy.
Oh, and Apple is mostly a hardware company, or did you not know that? Why would they build software to take away sales from their hardware profits? Either you really didn’t put any effort into this piece or you are simply clueless. My bet is, you are lazy. Remind me to never let you run my company.
Here is what Apple should use that money to purchase:
1. Display company
2. Memory company
I’ve had many tell me what I should do with the 10,000 shares of Apple stock I purchased in 1989. Apple has prospered and rewarded me 40 fold by your last suggestion and ignored all those professing to know what Apple should to do with the profits they’ve made.
Confidence follows successful long term thinkers producing exceptional product. Steve Jobs, Financial Times man of the year in a trashed economy….. speaks volumes. Apple’s new data center in the southeast yet to go on line could conceivably stream all of Netflix traffic and WiFi phone. Owning Netflix too in large numbers…that’s a merger I could support.
Hi everyone — especially Jim,
I’m not lazy and I put plenty of effort into the story. This was meant to be something silly and light hearted for the holidays. Try reading it with tongue-in-cheek in mind. I don’t know if you noticed, but the first option was the most ridiculous with the “just kidding” disclaimer, following there after was the last option of “do nothing” which clearly, is the right thing Apple should be doing with it’s money.
Jim, Apple is already working with Toshiba on building displays, and Apple already scoops up all the flash RAM it can get before anyone else in the industry. So they’ve already got that covered for the most part.
You don’t have to write with such vitriol. Enjoy your family, friends and the holidays. This is, after all, just a blog.
4 words: The Walt Disney Company
Paying dividends would be a good place to start for one thing. Apple could also take a few billion and create a “good works” fund to help get kids interested in math and science (with Apple products) – and help improve STEM teacher training, etc. Apple used to help get their computers out into schools, etc. but I don’t see that they do anything (or at least much) related to charitable activities these days. Beyond that it might well be time for the stock to split again.
Happy Holidays everyone!
They should buy AMD, getting their own CPU and GPU just like they have their own ARM design for their iOS devices. They added their own designs to the PowerPC CPU’s back in those days, so why not have their own complete design for the CPU+GPU as well, to take things to the next level.
Buy Wacom.
1. Buy Logitech
2. Buy SanDisk
It really doesn’t matter what Apple does with that money for the time being. 2010 has already started to show the decline of the Wintel hegemony. Microsoft has no mobile platform to speak of and the wheels are already starting to fall off the low end of the Wintel PC market thanks to the iPad. Apple could spend some of its money to port OSX over to ARM processors and start building some low-power ARM/OSX desktops. Otherwise, Apple can stay pat and continue doing what it’s already doing. Building high-quality devices and providing good customer support for low-tech consumers. Hello, Apple. Goodbye, Wintel for the masses.
How about working with US Military, for instance with a new iPad 2 amp; iPhone with the 4 turbine $300 Parrot helicopter for scouting amp; searching.
Buy ABC , Apple Broadcasting Company! Oh, one more thing ……Please, Steve Jobs- BUY GOLD!!!!
I think Dave O. has the best idea yet around STEM – Apple can drive the millions of young Apple Fan-boys and girls into technical careers and drive adjacent (and complimentary) businesses through increased North American entrepreneurship in the future.
I was thinking about this last night without first reading this blog – one of the most profitable (and closest to Apple’s core HW business) would be accessories. Brands such as iHome (just to get the trademark if nothing else) and iLuv are highly profitable and would expand Apple’s distribution.
The other likely investments are around content. Extending iTunes and Apple TV with some investments into the depressed traditional media industry would pay future dividends. I am not talking another AOL Time Warner debacle, but extending the catalog with new content sources and driving new methods of consumption.
Finally, and most obvious, is to invest in the core and come out with a new pervasive category product once per year. Apple has the momentum with their design magic to launch almost any technical device and drive it mainstream within weeks (think car interface, home appliances, clock radios, and hundreds of others)
Buy Ireland. It’s virtually bankrupt at the moment, and could be snapped up for a song. Leprechauns haven’t had an update in quite a while, and a touch of Apple usability could make them a world-beating product again. And the intellectual property rights that would come with Ireland would be enormously valuable. The new, post-touch voice operated OS that Apple is developing would logically be called Blarney, and the new hand held product category that uses it be called iBlarneystone. I’ve barely scratched the surface here, the possibilities, and potential for market expansion are almost limitless, what others can you think of?
Buy Zoho, or perhaps a stake in it, integrate Sheet, Show and Writer with iWork on the iPad and Mac OS X and add education to Zoho’s current focus on business. The iPhone and iPad have brought Apple squarely into the enterprise. Build on it. Fight Google’s fire with fire and jump ahead of Microsoft Office 365.
Ravid Howler: The VAR Guy likes your creative thinking. A lot.
-TVG
I’d highly recommend it allocate $1B into a bona fide channel partner program and rock the world. I started with Apple (Apple II+ in 1980/81 with VisiCalc) and have closely tracked Apple for 30 frickin years. It’s made partner program attempts (the late 1980s in the NetWare-era was a notable attempt).
I would love to see Apple get a partner program right!
cheers…harrybbb
Harry: With Apple Stores making so many SMB moves, The VAR Guy doubts Steve Jobs will ever take the channel seriously. Still, a few Apple-centric MSPs have popped up in recent years…
-TVG