How should Apple use their record profit

Apple’s record profit continues to elicited varied responses:

  • The stock market reacted by increasing Apple’s share price, it is now worth more than Microsoft and Google combined, as noted by Appleinsider.
  • Egalitarians, driven by a sense that all things should be equal suggested that Apple should transfer $1 billion of profit to Foxconn employees.  Whilst this seems like a noble and charitable gesture, Apple exists to make great products, not to create jobs (or income equality) per se.
  • Dividend advocates like Adam Lashinsky, author of Inside Apple has hinted that Apple will pay a dividend, even though it hasn’t done so since returning to profitability.
  • Apple uses it cash to become a single buyer that controls key high-tech supply chains.  Tim Cook, whilst serving as COO noted it was a fantastic way of using the company’s cash reserves.  Horace Dediu of Asymco refers to this as being a “monopsonist“, as noted by Fortune Tech’s Philip Elmer-DeWitt.

Surely Apple’s enormous cash reserves affords it tremendous power to secure super competitive componentry for the successive waves of products it has planned and ensures it will be more profitable than it’s rivals for the foreseeable future.

Advertisements
This entry was posted in Tech and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s