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

Must Read

Trump Administration Has Landed Its Final Blow On Chinese Companies: Xiaomi Blacklisted!

In its recent move to safeguard national security, the United States’ Trump Administration has decided to go...

Huawei Is Gunning For Acquiring A Fifth Of Android’s Userbase With Its Own HarmonyOS!

After Google’s ban on Huawei in 2019, the Chinese-origin tech company is all set to roll out...

WhatsApp Might Lose 60 Million Indian Users Post Updated Policy Changes, New Survey Reveals!

The Facebook-owned instant messaging platform’s decision to update their privacy and terms of service brought about a...

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

Reliance-Future Deal Is Approved By SEBI But Biyani May Not Be Happy With It!

Despite Amazon trying its best to stick a fork between the Reliance-Future deal, the Indian market regulator...

Skeletons in the Closet? Google-Facebook Involved in Secret Online Advertising Deal

If you can’t beat ‘em, join ‘em. And when two titans happen to decide upon an alliance, there are bound to be...

The Sudden Reappearance of Missing Jack Ma Leaves People Guessing About Many Things!

Jack Ma was preparing to publicly float Ant Group - what was billed to be the largest IPO in the world in...

Apple Foldable iPhone May Surprise You, But It Won’t Launch This Year!

Rumours of a foldable iPhone have long been circulating on the internet. However, until now there was little to no indication Apple...

Snapchat Spotlight: A New Way for Creators to Earn Money

Short-form video applications have increased overwhelmingly in popularity in recent times. The surge in this format of online content, according to most,...

COVID-19 Unemployment Leading To Ageing Indian Workforce, CMIE Reports

The latest data shared by the CMIE aka Centre for Monitoring Indian Economy has highlighted a huge red flag.

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter,...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one...

More Articles Like This