11 things Apple could do with its $159B cash fortune

11 things Apple could do with its $159B cash fortune

Summary: Some companies have more money than sense. But Apple has both. What could the firm buy with its $159 billion cash pile? And what makes more sense?

TOPICS: Apple, iOS, iPhone, iPad

4. Buy Twitter, Dropbox, and Fitbit — and still have plenty left over

Twitter is currently, by market cap, worth about $24.7 billion, which might have been wise to snap up sooner to avoid shuttering its failed Ping social network. While Dropbox hasn't hit the stock market yet, it's estimated to be worth about $10 billion. As for Fitbit, the wearable tech titan is still drumming up funding and is estimated to be worth about $300 million, and could give the company a big leg-up in the wearables and watch market.  

And even with those acquisitions, that's just 22 percent of its overall cash pile. It could spend even more on acquisitions, or invest more in the companies it buys to integrate them further into its own products.

5. Give every Apple shareholder a one-time dividend

If Apple were to give a one-time dividend to its shareholders, they would receive around $178 in cash per share. There are currently just over 892 million shares in Apple. 

Back in 2002, Microsoft was sitting on about $36 billion in cash. Investors and company chairman Bill Gates disagreed on what to do with it. Gates wanted Microsoft to have enough cash on hand to operate for at least a year without generating a cent. But shareholders demanded a dividend.

6. Invest in buying every U.S. school and college student 

Apple has enough cash to buy every U.S. high school and college kid a top of the range iPad, more than a dozen times over. There are about 82.3 million high school and college students as of a five-year estimate ending 2012 from the American Community Survey. If Apple dished out a top-of-the-range iPad Air (128GB, Wi-Fi) to every student, that would still chip away about $65.7 billion. So, Apple could give them two and still have about $18 billion left for a rainy day.

7. Make Hungary a good offer

Hungary has a gross domestic product (GDP) of about $125.5 billion, according to a 2012 census by the World Bank. It also has about $46 billion in cash in its reserve. Bang the two together and you make up $171.5 billion, which is just outside Apple's reach. But it's not to say that it couldn't drum up a bit more in cash, or make a good offer as it stands.

8. End world hunger?

According to Goldman Sachs, it would cost about $175 billion, representing just over Apple's cash pile, and about 0.7 percent of the income of the richest countries in the world. The U.S. by comparison spends about $680 billion each year on its military program alone. Apple could make a huge dent in this area, but it really requires government efforts and international treaties.

9. Forget the iPhone cellular carriers. Own one

The iPhone represents about half of Apple's business. Rumors began to spin a few years ago when the long-awaited device came out that the company could also run the networks behind the device. It's still possible, but it's unlikely. Bypassing the telecom companies could result in a huge long-term payoff for the investment.

T-Mobile, which says it has the fastest mobile Internet service to date, is worth about $24.7 billion, about 15 percent of its cash pile — while Sprint is worth a bit more at about $34.8 billion, or 22 percent of its cash. Even after buying the two cellular giants, Apple would still have just shy of $100 billion left.

10. Plug 0.7 percent of the U.S.' federal debt

As of the fourth-quarter of 2013, the U.S. federal debt was $17.35 trillion. If Apple pumped every cent of its cash into the U.S. Treasury, it would have almost no effect, plugging just 0.91 percent of the debt.

The effect would be additionally minimal, seeing as the debt increases by about $46,100 per second, meaning the U.S. would make up that cash injection in just 39 days.

11. Do nothing — which is the most likely option

Again, we should point out that over half of Apple's profits are attributable to just one device: the iPhone. Apple saw its stock tank by 8 percent in after-hours trading after it missed analyst expectations on iPhone sales at its first-quarter earnings in January. If the next, or following iPhone turns out to be a dud, the company could be in trouble.

And, Apple chief executive Tim Cook said before, on acquisitions, he was “not going to go out and buy something for the purposes of just being big."

The likelihood is that Apple will continue to drum up cash from its high-margin devices, and dish it back to investors and shareholders over time. It's dull, but that's big business for you.

Topics: Apple, iOS, iPhone, iPad

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  • You left out the best thing Apple could do.

    Just drop the prices of their products by 15%.
    • No, the best thing they can do is STOP SUING EVERYONE

      I will never use nor buy any Apple product because all they do is sue people. I don't care if their stuff was the best product on earth, suing other corporations right left center is what a bad company does. A jealous company, a possessive company: so whatever they design, is garbage, even if 'today' it seems good.

      So long as we support badly-managed companies, they prosper. Not with my money, honey.
  • they could give me a couple million

    they wouldn't miss it at all.
  • $159,000,000,000

    This isn't a 500 million dollars here, Apple Inc has a have a trillion dollars in their bank. Apple could buy a tiny country if they wanted and call it Applania.
    Pollo Pazzo
    • Correction

      They have 2/10 of a trillion dollars in their banks, nevertheless 159,000,000,000 is plenty for a tiny country!
      Pollo Pazzo
  • They could embrace irony

    And fund a campaign against the corrosive influence of money on US politics
  • buy M$ft

    and oracle to own the axis of evil software.
    LlNUX Geek
    • Except

      Apple already tops the charts of the most evil companies. With their Patent trolling, privacy issues and bugs etc. And they just asked Samsung to pay them an extra $2.19 billion, so I don't think Apple is doing to good.
      • Except...

        what you've written is not true.

        "patent trolling"? How quickly you've forgotten Microsoft's purchase and sale of patents that are allegedly crucial for some aspects of GNU/Linux operation.

        What about Microsoft's extortion racket with Android phones: "Pay us $5 to $13 per phone to license a bunch of patents that we claim to have, but won't show you, and we promise we won't take you to court when you infringe our supposed patents."

        What about Microsoft's recent behaviour in the EU, where they "accidentally" omitted the browser choice software? (Microsoft begged for the browser choice remedy to avoid paying the tens of billions in fines that the EU were going to fine them for their anti-competitive practices. Now Microsoft is trying to sleaze out of complying with the deal they begged for.)

        "they just asked Samsung to pay them an extra $2.19 billion"

        That's a bargain for Samsung, who copied every single aspect of the iPhone as closely as they could, right down to the packaging. Say what you will about Samsung's subsequent "innovation" (which mainly consists of slapping together SoCs and tweaking Google's software) nobody can seriously question that Samsung copied the original iPhone.

        Furthermore, if Apple had just "asked" Samsung for "an extra $2.19 billion" then Samsung just has to say "We'd rather not."

        In fact, consultants hired by Apple have calculated that Samsung's patent infringements have cost them $2.19 billion in sales. Apple will only be *awarded* these damages *if* they convince the judge.

        I don't know what the outcome will be, but Apple has had some successes in some pretty major markets with similar court cases; it's also lost some.

        Before you rant about software patents, you cannot blame Apple for using every legitimate legal tactic available to them. If you disagree with software patents or trade dress protection or the DMCA then that's fair enough; but it is not reasonable to attack Apple as "evil" for using these tactics. (After all, Apple have paid license fees for the silliest patent I've ever heard of - Amazon's "1 click shopping" patent.)

        "privacy issues and bugs etc"

        I see. Are you claiming that Android phones don't also have "privacy issues and bugs etc." or that Apple's track record with "privacy issues and bugs etc." has been worse than Android's?

        If so, you don't know what you're talking about.

        Android development is funded by Google's systematic violations of its customer's privacy via gmail analysis and other intrusive techniques, and that's just the most widely known privacy violation.

        Bugs? Android haven't been doing too well over the last few weeks with the exposure of various malware vectors. I've even read that the best selling Google "Play" app is a virus scanner. (Who invented the app store, a model which has been adopted by Google, Samsung and Microsoft? Wasn't it Apple? It's as obvious as the Amazon "1-click" patent - so obvious that nobody even tried it before Apple.)

        What bugs are you talking about?

        At least Apple provide swift software upgrades. I believe Apple pushed out iOS v7 to 97% of their customers in less than a month. In contrast, four months after Android Kit Kat was released, it had reached a whopping 3% (IIRC) of end users.
        • omg

          Didn't bother to read all of your long rant.
          But clearly your a cool-aid drinker if you don't think Apple is a bad company.
          You mention what Microsoft did 20years ago, an old case and you clearly still like a mule hold a grudge. But you are blind to what Apple has been doing these last 8 years, and continues to do, shape up man.
          • Yes!

            If that's what you want to believe it is much easier to just say Apple is evil than to bother looking at any evidence to the contrary.
          • Please

            @rfoto Show me this evidence.
            @scanback - Why should I read his argument, when he leaves our discussion and talks about Andriod, I don't care about Andriod.
            I have an iPhone 4, and claiming iOS is bug free is like saying you cant find porn on the internet. I have cleared my crash report history many times now, and the total of crash reports on my iPhone is mounting up to 1000s.
          • Actually he posted some good arguments

            you might want to read before posting "kool-aid" comments. What a jack-wagon
          • Re: OMG

            "clearly your a cool-aid drinker if you don't think Apple is a bad company." - Wall.iPhone4

            I did not express an opinion about whether Apple is a good or bad company, in absolute terms.

            My post was a rebuttal of your (ridiculous) claim that Apple is significantly *worse* than its competitors. In particular, I have seen no evidence that Apple:

            a) ".. tops the charts of the most evil companies."
            b) engages in "..Patent trolling, privacy issues" *more* than MS, Google or Samsung
            c) writes software that has *more* "bugs etc" than software from MS, Google or Samsung.

            It's incredible that *you* can accuse *me* of drinking kool aid, when you're too mentally lazy to even read my post before attacking it.

            "You mention what Microsoft did 20years ago"

            Wrong. The Microsoft browser fiasco is still before the EU courts, while the judges decide the size of the penalty. This could cost MS billions or tens of billions of dollars or Euros. The other MS issues all occurred in the last three or four years.

            "But you are blind to what Apple has been doing these last 8 years .. shape up man."

            How, exactly, did you decide that when you "Didn't bother to read all of [my] long rant"?

            If anyone needs to shape up, it's you. You're lazy, uninformed, and couldn't even write five lines without contradicting yourself.
        • Wait.

          You said: "What about Microsoft's extortion racket with Android phones: "Pay us $5 to $13 per phone to license a bunch of patents that we claim to have, but won't show you, and we promise we won't take you to court when you infringe our supposed patents."

          So you think Android phone makers are just going to pay fees to Microsoft without any evidence that these fees are legitimate? If they're that stupid then they should give Microsoft all their money because only Microsoft deserves it.
          • Yup.

            When the extortion is less than the court costs to defend against it...

            You bet they will.

            The only company that DID go to court didn't pay anything... instead, MS paid them to sign an NDA to shut them up.
          • Even you don't believe that, especially with all the evidence presented

            Multi-Billion dollar companies have signed, companies with resources that could easily counter MS in court, and win if they had a case, and the bottom line would have never noticed.

            Yet they signed.

            The evidence is so stacked against you, I'm not sure why you even bother starting your spin machine.

            Guess you want to get paid, I'm assuming...
        • Apple and Patents

          There is a major problem with Patent laws in the US (and maybe other countries, I'm not sure)
          Software patents are ludicrous - especially the ones that describe the layout of some icons on a screen. I particularly dislike their patents they have got through that discuss tapping a touch screen to activate an app! I mean these 'ideas' have been in use in the public domain for a long time before Apple slapped a patent on them. Any existing technologies should not be patentable if it is well known public knowledge that other companies have already done it. The US Patent office should be ashamed of itself.
      • Huh?

        Did you make that up, or did you simply regurgitate the garbage many other Apple-haters have made up? Seriously???

        Apple has had to defend itself many many times from the "Patent Trolls" you mentioned - It isn't Apple that "trolls" the US Patent office.
      • patent troll troll

        ((( "Apple already tops the charts of the most evil companies. With their Patent trolling, privacy issues and bugs etc." )))

        First, from Wikipedia: "A patent troll, also called a patent assertion entity (PAE), is a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question, thus engaging in economic rent-seeking."

        Apple manufactures products and supplies services based upon the patents they are defending in court. Thus, not patent trolling.

        Second, what privacy issues are you referring to that would make Apple an "evil" company?

        And lastly, you think that bugs make a company evil? That's just... dumb, on an epic scale.