On Tuesday, Apple Inc. (NASDAQ:AAPL) will release its quarterly performance report for the company’s second fiscal quarter of 2017, ended March 31, 2017. The tech behemoth is expected to disclose its cash reserve which is estimated to surpass $250 billion. This tremendous measure of cash fills in as an exceptionally consoling security net. It’s suspected, however, that the declaration may trigger debate on if Apple must start exploring possibilities to invest a sizable share of its cash reserve in new ventures, R&D and new initiatives.
To put the thing in perspective, $250 billion cash reserve is enough of buying over 50% share of Facebook or 38% share of Google or nearly 50% share of Microsoft. And, if that’s not enough, the cash reserve of Apple is big enough to acquire World’s Top 10 most valued startups, including Uber, Xiaomi, Didi Chuxing, Snapchat and SpaceX.
While the figures are still at speculation stage but it’s quite likely that Apple’s cash reserve will easily surpass $250 billion considering Apple’s is already sitting on the cash hoard of $246.1 billion as of December 2016. Factoring the sales performance of Apple iPhone 7 in Q1 2017, another $4 billion could have been added to its coffers from in the last three months.
Apple may defer spending excessively of its cash reserve. The company may opt to wait-and-watch policy to see if President Donald Trump will stand by his promises made during the campaigns that would permit cash being kept overseas to be conveyed down to the United States at a decreased expense rate.
At regular intervals, speculations about possible acquisitions Apple could make by using its extensive reserve have been making rounds on the Internet. In late 2016, Apple clearly considered buying Time Warner before it was in the long run sold to Charter Communications. There are numerous reports that it may acquire Disney, in an endeavour to bolster its amusement portfolio.
Apple has been employing the practice of keeping a hoard of cash as a reserve since the time of its visionary CEO late Steve Jobs. The habit was brought into the practice after Apple got into a critical cash crunch in 1997. Apple has to take take the investment of $150 million from Microsoft to keep the ship afloat.
As of today, with $246 billion of cash reserve, Apple is clearly in a strong financial position where it can make any of its competitor jealous enough. In any case, its reserved hoard of cash will trigger unavoidable discussions about whether the money ought to be pumped into innovative work or should be used to reward shareholders. With more than a fourth of a trillion dollars in the bank, it’s maybe obvious to see Apple contributing vigorously into what’s coming next.