COMMENT: Apple whose share is now hovering at $500 has more money than it needs, according to CEO Tim Cook.
At a board meeting this week the Company took a long hard look at what they can do with the $100 Billion in cash the Company is now sitting on their books.
 |
Apart from handing out dividends the Company could go on the acquisition trail but who could they buy?
One potential acquisition target is Sony, it would be cheap as Sony’s current valuation is down from $100 Billion six years ago to $20 Billion today.
This is a once great Company that is today lost with there being little chance that they will be able to reclaim their former position at the top of the consumer electronics market.
What Sony has is valuable assets which under Apple management could flourish.
There is the Sony music and movie business which unlike their consumer electronics business is profitable.
This would leg Apple up into a position where they have a major stake in the content creation market, it would also gives them access to exclusive content for Apple devices.
In recent months there has been much speculation that Apple wants to get into the TV display market, a move that is fraught with dangers unless Apple can deliver a knockout capability that delivers a brand new TV viewing experience that motivates consumers to move from buying a Samsung, LG or Panasonic TV.
Sony has a long history in the TV market but to due to poor business decisions, a lack of manufacturing clout the Company has struggled in the flat panel era.
Under Apple ownership Sony would get instant access to manufacturing clout and Apple design teams.
It would also deliver access to a known TV brand which when linked with Apple software capability and content along with resources like iTunes and the Apple App store could well give Samsung, LG and Panasonic a run for their money.
Then there is the issue of innovation, Sony has some excellent scientists, who in the past have been responsible for technology such as OLED, Blu ray along with the development of new audio and vision technology. But their biggest weakness was software innovation, which is where Apple has excelled by combing the two the potential is there for both Companies to deliver exceptional design innovation.
Another big benefit for Apple is that Sony already has a strong presence in the gaming market, by harnessing this resource, their gaming relationships and expanding it across current Apple devices opens up a whole new business opportunity for Apple who already has a strong hold of the hand held gaming market a segment where Sony is struggling.
This week Apple CEO Tim Cook said “We have more cash than we need to run the business on a daily basis”.
Apple stopped paying a dividend in 1995, and with a cash position of almost $100 billion, the tech giant has recently come under pressure to outline what they intend to do with the money.
Former Chairman Steve Jobs did not like handing out dividends, but his predecessor Tim Cook has already hinted that he has a different view.”I have said since becoming CEO that I am not religious about this,” he explained. “We’re in very active discussions at the board level about what we’re going to do with our money.”
Cook admitted that that Apple doesn’t like to part with its cash. “We spend our money like it’s our last penny. I think that shareholders want that,” he said before quipping, “We’re not going to have a toga party or do something outlandish.”
He also said that Cook that Apple had a “good” roadmap ahead, but he did not mention TV’s or any potential acquisitions.
