Apple's Cash Reserve Has to Scare Competitors

Yesterday's quartely earnings report from Apple was certainly impressive including shipping 1.5M  Mac computers and more than 10M ipods, totaling a hefty $5.26 billion total revenue with a net quarterly profit of $770M, but what caught my eye was this line at the bottom of the NYT article about the report. (Picture courtesy of Apple.)
 

"Apple said it ended the second quarter with $12.6 billion in cash."

Whoa, that is nice little nest egg, Mr Jobs and company have built up there and it makes me wonder what they are going to do with all that cash. I'm not the only one who has noticed Apple's savings account. Business Week took notice back in March in an article called 'What To Do with Apple's Cash.'

This morning, Apple Insider reports that investors are going to push Apple to take a more environmentally-friendly approach to production and with that kind of cash, and none other than Albert Gore, Jr. on his board of directors, even Jobs can't possibly argue that the company can't afford to make the products more eco-friendly.

Perhaps Apple will continue to innovate and attract more and more people to its market using the cash to fund R&D to come up with the next insanely great products.

Whatever Apple decides to do with all that cash, it actually has the prospect of making even more, much more, very soon because Apple has a market salivating for the $500 iPhone months before it's even ready. With those kind of cash reserves, look out because somewhere Steve Jobs is thinking of a way to outsmart his competitors just as he always has, and with all that money at his disposal his competitors have to be shaking at the prospect.

Comments

[Jayzee]

Ron,
Your editor really mangled this article. It should say 1.5 Million Macs; not $1.5 Million. Similarly 10 Million iPods, not $10 Million.

___
Hi:
Thanks for the note.

You're absolutely right. Thanks for the catch. I wish I could blame it on my editor, but in this instance, the editor is me. I've fixed the first paragraph and I appreciate you passing along the correction to me.

Regards,
RM

[Wayne Smallman]

Yeah, the enviro angle is vector for Apple.

They could come out of that kind of thing in ways their competitors just couldn't hope to.

Which sort of makes me think it's the perfect "OK guys, follow this!" for Steve Jobs to work from...

[Ron Miller]

Hey Wayne:
Thanks for the comment.

You're right. Jobs is in the cat bird seat with that cash. If he does right by the environment, he only endears himself further to his core audience, and as I say, with all that cash, he has lots of latitude right now.

Regards,
RM