What Would Apple Inc. Do With $137 Billion Cash Hoard Over Next Two Years?

Must Read

Microsoft Warns Millions of Windows 10 Users, And It’s Scary!

Microsoft’s Windows 10 update worries seem to haven’t stopped even after they started to secretly offer Windows...

Microsoft Study Reveals Indians Have Become Less Digitally Civilised Than The Previous Years!

With the coming age of digital boom in India, more and more people have been gaining access...

Facebook Falls Prey To Coronavirus: Cancels Global Marketing Summit 2020

The deadly Coronavirus outbreak seems to have now become the primary cause of the cancellation of another...
Abhishek Singhhttp://dazeinfo.com
An Engineering Graduate, Fervent Industry Analyst, passionate about mobile, innovative technologies and Entrepreneurship.

As per Apple Inc.’s earnings report for fiscal year 2012, the company has currently $137 billion cash reserve. We have already discussed a lot about the company’s performance, which doesn’t seem promising for its shareholders. During the last quarter, Apple Inc. created a new record with the sales of Smartphones and Tablets; the company sold 47.5 million iPhones and almost 23 million iPads in Q4 2012.

As competition in the mobile segment is going to intensify, it’s really tough for anyone to predict Apple’s position in next two years. Many still believe that the company would need to have such cash hoard to rescue itself. On Wednesday, Jefferies analyst Peter Misek said in a note to investors that the next two years are going to be very tough for Apple Inc., as it has planned to focus on developing mobile markets and necessary technology development. In addition, the company will also require capital expenditure (Capex), as it has decided to move into prepaid dominated cellphone market like India.

On the other side, it’s clear from a recent filing with the securities and Exchange commission by Cricket owner Leap Wireless that sales of iPhone are going to mount down in current quarter. The carrier has sliced its purchase (of iPhones) to half of its first-year commitment from Apple through June 2013. However, the decision of the carrier is contradicting to the statement of its chief financial officer Jerry Elliot, who previously told that sales of the devices were impressive in Q4 2012, and they had no issues related to meeting its commitment with Apple.


Apple Inc.

Apple Inc.’s Capex requirement is expected to be doubled over next two years, as the company would have to finance the build-out of chip fabrication facilities. This time, the company’s suppliers are struggling in terms of capital to expand their production to nominal level. In January this year, Apple contracted to TSMC to build the A6X SoC, which is being used in the fourth generation iPad. Besides, the company is also considering to rise capex for display manufacturing and iCloud data centers.

Furthermore, Apple Inc. is quite aggressive to make its stronghold in burgeoning markets like India and China. Recently, the  company has succeeded to increase its presence in Indian smartphone market with multi-layer distribution model, where carrier subsidies are replaced by installments plan. More importantly, in many developing countries, the company has recently acquainted “Payment Plans” to enhance the sales of iPhones. These’re the reasons why the sales of iPhone increased 400% in India over the last three months.

Apple Inc. cash hoardOf course, the alternative distribution models, especially in lower GDP per capita markets like India, are going to generate higher turnover for Apple Inc. However, the installments plans offered by the company are still less flexible than subsidies offered by carriers in matured markets such as the U.S. and UK. However, in emerging markets, users are more likely to buy cheaper smartphones; for many of them, the iPhone is still a premium product.

It’s expected that Apple could use $137 billion cash hoard for stock buybacks and traditional dividends to increase strategic flexibility. Besides, it could also return some value to shareholders. In addition, Apple Inc. is also expected to double its dividend and repurchasing commitment. For these, the company would have to invest $45 billion over next three years, to $90 billion over an extended period of time.


  1. La médiocrité de Samsung finira par apparaître au grand jour.



Please enter your comment!
Please enter your name here

Latest News

SoftBank On Uneven Grounds With Vision Fund 2: Spent $2.5 Billion To Boost Confidence

The Japanese tech conglomerate SoftBank Group Corp seems to be highly optimistic about the investment scenario...

Apple To Launch A New iPhone On 31st March To Take Competitors By Surprise

A surprise launch of a new Apple iPhone, dubbed as iPhone SE 2, may take place soon. Much has been speculated and...

Paytm And PhonePe Will Spend Jaw-Dropping Amount On Marketing Efforts In 2020

It has recently been reported that Paytm and PhonePe which are leading digital payment companies of India have combined allocated a humongous...

SEO Secret: Meta Description Drives More Clicks Than Title, Reveals Study!

If you are a digital marketer in 2020 or someone who takes a keen interest in consumer behaviour, you’d be shocked with...

Chrome Had More Than 500 Harmful Extensions: Users Beware!

Google is committed to providing a clean, safe and enhanced internet experience through its Chrome browser. In a bid to do so,...

Why Zuckerberg Endorsing A Move That Could Be Bad For Facebook!

Facebook Inc. (NASDAQ:FB) has been under the radar of several governmental institutions and privacy regulators for their overly alarming activities related to...

In-Depth: Dprime

YouTube Should Have Bid Adieu To Dislike Button Much Earlier?

Online video sharing platform YouTube can be a ruthless place for content creators targeted by 'dislike mobs'. And the site owners totally understand that...

Facebook Has Pulled Off A Masterstroke By Integrating Its ‘Family Of Apps’?

It’s indeed hard to believe that ONE man sitting at Menlo Park, oversees how nearly a third of the world’s population interacts with each...

Facebook’s Crunch Conquest: By Relying Largely On The US Market, Is Facebook Running a Risk?

Two billion! That's Facebook, Inc. (NASDAQ: FB) for you - Right when you thought that this social-media giant has already connected the entire world, it's...

More Articles Like This