Who has more money than Apple, Inc? The U.S. is a debtor nation so don’t think Treasury. Maybe China? God might have more wealth, but Apple is soaking in cash and you know what that means? Doom, right?
Somehow or another more cash and more products and more customers mean more opportunities for failure. Perhaps so, but show me where Apple is failing these days. Alright, public relations. Batterygate is a thing but so is cash and Apple has a few hundred billion in cash scattered in a variety of banks big enough to handle it.
Jim Edwards does the unthinkable and unallowable at Business Insider these days and actually wrote about business with some decent analysis. In essence, the standard analysis about Apple goes something like this:
- iPhone sales are flat
- Mac sales are flat
- iPad sales are staggering
- Services are installed base only
- Competition is intensifying
- Apple says no major M&A’s soon
- Tim Cook is not Steve Jobs
- AAPL needs a new driver
I would add to the list a complete lack of imagination among Apple’s executive staff and boardroom because, with all that cash sitting around, about all the company has done in recent years is increase R&D spending like crazy (thrashing about trying to find the next great thing?), give undeserving shareholders a dividend, and buy back huge amounts of stock (supposedly to keep the price jacked up so as not to be embarrassed by Amazon when AMZN passes AAPL).
My aunt Tera, who lived in Las Vegas for more than a few years, told me of a sure fire way to win big in Sin City. Double down. It doesn’t matter much the game (other than slots, of course)– poker, roulette, blackjack, craps. Double down. That means if you bet $100 and lose, the next bet is double. $200. If you lose, the next bet is $400. Sooner or later you’ll win and get your losses back instantly, and sooner or later you’ll win twice in a row, and that’s a good time to know when to fold ’em.
Apple doomsayers and naysayers do the same thing. They keep doubling down with every doom story. In this case, though, I think Jim Edwards might be correct. Apple won’t make a major acquisition but it can continue to invest in R&D, pay a dividend, and pull stock off the market in buybacks, which should keep the price jacked up awhile longer.
In the meantime, even without marketshare growth and not much revenue growth to compare with the iPhone Golden Years, Apple will rake in more billions of dollars in profits every year.
Nothing will change.
Oh, and Apple is doomed.