Apple’s Cash Hoard

http://blogs.wsj.com/digits/2009/08/14/apples-cash-hoard-it-just-keeps-on-growing/

by fogus • 17 years ago

32 40 17 years ago

blogs.wsj.com

To those that think Apple's products are reasonably priced: Where do you think they got all this money from?

dcurtis• 17 years ago

Apple does not compete on the low end, where margins are razor thin. They own the premium computer market where margins are high.

georgekv• 17 years ago

Plenty of people seem to have reasoned that Apple's prices (and products) are good enough for them to pay up. What's wrong with that?

jsonscripter4• 17 years ago

Nothing's "wrong" with people think it's fair value. It's just that some people think 2000 dollars for a laptop is inexpensive.

I'm just saying that Apple charges quite a premium on their products.

karzeem• 17 years ago

Not paying the cash out to shareholders saves Apple a lot. And I'm not the first to say this, but paying out to shareholders isn't exactly the most innovative way to use your cash. It's like saying, "We couldn't think of anything to invest this cash in that will push the business forward, so let's just write you a check."

jonknee• 17 years ago

And not using it for anything isn't super innovative either. The investors own the company, what's wrong with giving them their own profits?

jsdalton• 17 years ago

I think they got all this money from selling lots of products at a price people were willing to pay.

onreact-com5• 17 years ago

And other people to work 60h+ a week for Chinese minimum wage (a dollar a day).

inovica4• 17 years ago

I bought a Jaguar XK because I love the car, the attention to detail and the style. Yes, I could have bought something much cheaper, probably just as reliable (or more so!) but I chose this route as it has a sense of style. If there's anything about business that I've learned it's that there are products for every niche, be it low cost food through to high priced watches.

onreact-com5• 17 years ago

Well, no wonder, they sell their exploding crap for double the price while producing Made in China as everybody else.

joubert3• 17 years ago

Perhaps, BUT: Designed by Apple in California.

onreact-com5• 17 years ago

Even better - Design stolen in Germany: http://gizmodo.com/343641/1960s-braun-products-hold-the-secr...

arfrank• 17 years ago

I think this is one of the reasons Apple makes hardware products that are so polished when they finally are released. It lets them try things until they get it right, and if they haven't gotten it right then usually they just keep on working towards it.

I just read the book about the making of the Segway "Code Named Ginger" and in it there is a Jobs quote where he says "Screw the lead times. You don't have a great product yet! I know burn rates are important, but you'll only get one shot at this, and if you blow it, it's over." http://hbswk.hbs.edu/archive/3533.html In my opinion this is how Apple operates for a lot of products where they are seen as innovative and the cash in the bank allows them to do this.

adamc• 17 years ago

Great quote. Blizzard has seemed to operate that way as well (taking a very different example).

pclark• 17 years ago

I believe, and I might be wrong, that Blizzard were on the brink of serious financial woes before world of Warcraft came out.

proee• 17 years ago

I wonder if it would have been possible to have made the Segway a success on launch? Is there anything different (in hindsight) they could have done to the product itself to make it a "great product" on launch. Steve obviously was interested in the idea from an early stage, so what did he feel was missing from the product before launch?

jedc• 17 years ago

I'm not sure why this is so important; it's a bit of a fluff/filler piece.

Every major software company hoards cash. MSFT, GOOG, APPL, everybody. So Apple's got a lot of cash... so what?

It's a lot of cash, but they've been doing well lately. :)

newacc• 17 years ago

i know i'll be downgraded for saying this and i'm ok with that because most of the hackers are apple lovers and this is hackers community and not marketing forum :) but anyway if you think that apple charges reasonably for their products then you've no clue how apple is doing in other parts of the world - marketing research says that companies like apple had made money from westerners ONLY !!!

yes, apple offers quality products

yes, apple charges for premium

yes, apple has all the innovation working for them ....

But

Apple is a hit in western world only where people spend blindly .... look at the success rate of apple in 3rd world countries (where population is huge) - you will know that they are nowhere in top 10 --- surprised? let me give you an example:

ipod: a music player that is a huge hit in north-america is a super-flop product amongst south-asians!!! WHY? Why people who are known as a smartest consumers in the world don't buy ipods? the reason is not only the price of an ipod but also the lack of features in ipods ... the other mp3 player offer way more features than ipods ... and sound quality is as good as ipods .... So why one would pay more price for less features and get a same quality of output???????????? this is not me who is saying it, its a huge market research for all the premium products that has a good following in western countries but no takers in other parts of the world.

So the same product that we call "premium" in america (or western world) is labeled as a "rip-off" in other parts of the world where a person is called as a foolish for paying more price and getting same quality output but way less features...

allenbrunson• 17 years ago

yes, a lot of us here are partial to apple's products. but we still like to hear opposing viewpoints, so long as it's done respectfully. telling us that we 'have no clue' is not respectful. that's why you're getting downmodded, not because you're taking an opposing view.

inovica4• 17 years ago

There's a way of saying what I think you're trying to say. Unfortunately I think you failed in the method of delivery. Personally I see that (part of) the success is the fashion element of the iPod etc and I feel this has a stronger pull in the west than elsewhere, partly because of the sophistication of the marketing machine.

noblethrasher• 17 years ago

Apply that argument to clothing. Stylish clothing.

whughes• 17 years ago

Apple makes hardware too, as its major products. They're as much a hardware company as they are a software company. The cash cache gives them a lot of flexibility. Microsoft was able to use its cash for the Xbox, and Apple can use its cash for all its stuff (iPhone prototypes, tablets, whatnot).

Apple’s Cash Hoard

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