Apple Inc. Has Enough Cash To Buy The World’s Largest Companies

Apple Inc. Has Enough Cash To Buy The World’s Largest Companies

The iPhone maker prefers buying smaller companies that fit easily into its existing business

Yesterday, Apple reported the biggest every quarterly profit in the corporate history. The iPhone maker generated $74.6 billion in sales and $18.02 billion in profits for the quarter ending December 2014. The record-breaking profits have given it more cash. Now Apple has enough cash to buy many of the world’s largest corporations and rivals, and still have a few billion dollars to spare.

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Apple can buy 483 of the S&P 500 companies

Apple now has more cash than the market value of Intel ($173 billion), IBM ($152 billion) and Amazon ($142 billion). As Tyler Durden of Zero Hedge points out, Apple’s cash pile is greater than the market cap of all but 17 companies in the S&P 500 index. The valuations of Intel, AT&T, Visa, Walt Disney, Comcast, Cisco are less than Apple’s cash reserve.

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If Tim Cook wanted to buy hot tech companies, he could acquire Uber, Airbnb, Tesla, Netflix, Twitter, Snapchat, Dropbox, and SpaceX and still have more than $20 billion left over. However, some of its biggest rivals are still out of reach. For instance, Microsoft is currently valued at $346 billion, Google is worth $352 billion, and Facebook’s market value stands at $212 billion. By Comparison, Apple itself is valued at $686 billion.

Apple may not pursue big-ticket acquisitions

But Apple may not be interested in buying those companies. It spends money on smaller acquisitions. Apple’s biggest ever acquisition was Beats, for which it paid $3 billion last year. Earlier this month, the iPhone maker purchased music analytics firm Semetric for an undisclosed sum. The Cupertino company buys smaller businesses that fit easily into its existing business.

A large chunk of Apple’s cash is stashed outside the United States. The company exploits tax loopholes in countries like Ireland to keep its tax bills low without breaking a single tax law. Apple will be hit by a huge tax bill if it repatriates its cash. That’s why the company prefers taking out debts to reward its shareholders, despite huge cash pile.

Apple shares skyrocketed 7.77% to $117.62 at 10:14 AM EST on Wednesday.

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  1. Reading your comment I only hope that people of your kind is not the major portion of people on the planet. Otherwise, “civilization as we know it is about to come to an end and we have already regressed back to the Dark Ages”

  2. “They have got one of the best marketing and PR groups out there.”

    They have got best engineers. Without good product you can’t sell it even with good PR.
    Ask Samsung -they spend 4 times more on PR and advertising than Apple does, yet they sell FAR less.

  3. …and in attempting to sync with iTunes, you’d discharge your tesla battery, and only get 11 miles on a full night’s charge instead of the usual 15.

  4. The business? How about the most profitable quarter known to man kind was reported by Apple a few days ago. Is that Business enough for you?

  5. Apple knows their consumer. They have got one of the best marketing and PR groups out there. They know capitalism better than most companies, which is why I love seeing all the wannabe-Marxists glued to their iPhone’s. Oh sweet irony.

  6. I hope this claim an exaggeration. When Apple, (a company of morons and high school dropouts that don’t make anything), has enough cash to buy some of the world’s largest Innovation-Research and Development power houses, we know civilization as we know it is about to come to an end and we have already regressed back to the Dark Ages. If there is a God, God help us all!

  7. Over time, everything fails. In the Apple II, all RAM were socketed so you can replace each memory chip! But you know what, the sockets had more reliability problems then the one soldered onto the motherboard.

  8. Dell has an amazing supplychain also worth study. In Texas, where they are located, they attracted all the components manufacturers around their assembly plant because each Dell computer was custom manufactured.

    Parts could be ordered and delivered to customer specification, delivered the same day. It’s very different in comparison to Apple, where choices are limited to a few one-size-fits-most models.

  9. Actually, I believe that WalMart is a lot better than Apple’s supply chain.

    With WalMart, their supply chain includes weather predictions. In areas of natural disasters such as floods and hurricanes, WalMart sends emergency supplies. One thing they sell quite a lot of is PopTarts, so they send a truck filled with PopTarts, and are able to fill store shelves before the inclement weather hits.

    When Apple has problems, they send an outsourced team of attorneys to handle customer service issues and perform supply chain audits because Bruce Sewell and Tim Cook are too busy being ski-bunnies on vail mountain.

  10. Apple’s sold 10 year bonds over the last couple years , 17b worth in 2013 and 12b in 2014. They pay back the bond holders when they mature with their profits. The math ends up working in their favor, because the amount they’d have to payout to shareholders in dividends over time exceeds the amount it cost them to buy back the shares and the interest.

    Apple is known for selling a lot of products but a lot of their genius in terms of how to run a corporation is behind the scenes. Tim Cook engineered the greatest supply chain management strategy of any company, and they find creative ways to handle their massive finances.

    This is where RIM screwed up. They focused on product and sales and mismanaged a lot of other things, but while sales were good no one looked behind the scenes for inefficiencies or improvement. Then when the sales went so did the company.

  11. I agree. We should be talking about the 2.5 (out of 5) stars Apple customers have given Apple’s terrible “upgrade” called “Yosemite” in the Apple AppStore. Apple probably should have called it “Yose-wont”.

    Also, Apple is setting itself for another huge quarter. Here’s how- Most of their customers are going to be screwed over when they realize the cheaper, and cost-effective Hynix memory chips are soldered on the motherboard.

    Similar to Apple’s iPhone business, where a 16-GB iPhone 6 has about 67% of it’s space available, an apple customer will have only one option- sell the old one, and reward Apple with buying a new one.

    Over time, nearly 10% of RAM memory fails. SSD drives also fail 1% of the time. By removing the customers ability to replace faulty equipment, or upgrade with industry-standard parts, Apple can expect to hold captive, up to 10% or more customers than previous generation models. Replacement options like memory, where a US$35 memory replacement could be performed to repair the computer, now the computer has to be replaced.

    Apple will enjoy a handsome profit and new sales from this design modification. Best of all, by virtue of this new design, the new machines have less parts, require less labor, and ultimately cost less to produce. The retail price doesn’t reflect this. Apple certainly knows how to reward shareholders! Expect these changes to the design to lift Apple Stock value, and produce additional cash in future quarters.

  12. Enough already. We all know how much cash they have.
    How about reporting on the business and get your nose out of their pocket.
    The cash is, after all, a product of their excellent products and execution. Not the other way around.

  13. How bout putting some of that cash in my pocket? About time apple increase their dividends – substantially. The time is NOW for investors to realize apple’s dream and promise. Reward us for keeping the faith and holding on to our tickets for years.

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