Apple cash reserves is mind boggling. After all, with such amount of cash reserves, Apple has even more reserves than many countries. According to the US Trust, Apple has an amazing amount of cash in its reserves. So much so that it has more cash in reserve than Malaysia. Surprising? Not exactly. However, it is surprising that US Trust decided to rank Malaysia above countries like UK, Sweden, Germany and Norway, all having a much stronger currency compared to the Malaysian ringgit.
However, it is pointless to just count the country’s cash reserve without considering it’s debts. As such, Malaysia’s Debt for 2014, we should have reached somewhere about RM 500 billion.
This article however isn’t so much about Malaysia’s debt, but Apple’s Cash Reserves. With such a large amount of cash reserves (USD 159 billion as of 2014), Apple is the number one company in terms of cash reserves, far out-stripping even Microsoft at USD 84 billion, Google at USD 59 billion, Verizon at USD 54 billion and Pfizer at USD 49 billion
Apple Cash Reserves : What should they do?
First and foremost, it would be a big mistake for Apple to return the money to its shareholders, unlike what many analysts and media have been making a fuss on. After all, having a war chest of USD 150 billion and more makes Apple a formidable company.
With such a large war chest of cash reserves, Apple would be able to
- Buy relevant companies – not just to remove a competitor, but also to gain patents, valuable staff and technology that would enable them to shorten development time, as compared to developing on their own and having to find ways to implement certain technology without infringing on patents, which might lead to costly patent battles.
A block of Sapphire. - Invest in relevant and ground breaking technology – Though Apple was the first to approach Corning Glass to make the now industry standard of smart phone and tablet glasses in the first Gorilla Glass, the upcoming iPhone 6 will most probably feature Sapphire Glass instead, which is 2.5 times harder than Gorilla Glass and second in toughness only to diamonds. Having so much cash reserves, Apple was able to invest in GT Advanced Technologies and continued research and development of sapphire glass that might proof decisive in their battle against Android Smart phones.
- Use the Cash Reserves in order to buy components and parts in bulk – it has been proven that why Apple’s Macbook and Macbook Air series generates Apple so much more in terms of profits as compared to let’s say Samsung or Lenovo. It was mainly down to the bulk purchases of the high grade aluminium chassis, and due to Apple’s limited product line up in laptops, they are able to maximise productivity and keep costs low, something not even juggernauts in electronics and personal computing like Samsung, Dell and Lenovo are able to compete with. Add the power saving OS X Mavericks to the beautiful and well made hardware, and you have laptops which competes with the very best and last longer than the average Microsoft powered Windows laptops.
