Apple Reports Fourth Quarter Results(apple.com) |
Apple Reports Fourth Quarter Results(apple.com) |
Can someone more business savvy explain what that means?
It's debt to cash-in hand ratio. Apple currently, as of March 2021, had US$120.2B of debt [1]. So, if they have $120.2B of cash, then it neutralizes their balance sheet. And, that's what the net cash neutral position is.
[1] - https://simplywall.st/stocks/us/tech/nasdaq-aapl/apple/news/...
Edit - I missed adding liabilities. But, it will complicate the above terminology, a bit more. Although, I hope you got the idea.
No dividends or stock buybacks to reduce cash, but no accumulating it either.
one platform for all their products. (one ring to rule them all) how much did Apple saved by going with their own in-house designed chip?
Share buybacks technically accomplish the same; the proportional increase in shareholder value should be the same. However, investors who do not want to recognize income that year do not have to; whereas investors who need the dividend income can sell a small number of appreciated shares.
Most discussions and news sites report shortage issues but I wonder if there is an underlying deeper reason.
What? Where did you get that information from? Their total units of sale is definitely not declining. And market share remains steady according to this: https://www.statista.com/statistics/216459/global-market-sha....
So I guess those results are a disappointment.
This is to say, Apple “needs” a new major product. Car is a moonshot but I personally think they can easily tackle the gaming space. They have all the right pieces to create $500B market cap.
Sony had their best year ever for Playstation sales in 2020, which translated to $20B of revenue.
Shouldn't we question whetever comes out of the shareholder's meeting? The classic is 2017 BTC boom that deluded NVidia's shareholders, no one questioned it and then in 2018, Jensen speaks up in the shareholders mtg that we're now in a Bitcoin hangover. Obviously, they've accelerated since then, but the point remains.
It's important to play a devils advocate even if you're wrong. No one in this thread seems to be doing that.
I really have no horse in this race, just putting out contrarian views from the herd.
Smartphones hit a saturation point a while back. At this point the only ways for Apple to grow marketshare are to a) lure away current Android customers, or b) convince first-time smartphone purchasers to go with iPhones at a higher rate.
Neither of those things are trivial, and not being able to do so for a little while should not be taken as an indication that something is wrong.
1. the improvements will probably come at roughly the logarithm of the number of people added at best (and, you can do worse without discipline and/or with a dysfunctional organization, possibly even negative), and
2. after their ramp-up period, like 6-9 months, during which each person might contribute a small negative load in mistakes, draining existing talent's time with questions, etc., and
3. you prioritize and value fixing bugs over adding new features, and
4. you probably want to structure those engineers in ways where they can contribute off of the critical path, like QA, dedicated to straight bug fixing, etc., and
5. You probably need an almost "microkernel" like team for very large projects--because the communication overhead grows as n^2, you need a small core, and ways to scale and build without growing the communication overhead--teams working on well defined and isolated subsystems off core, various "modules" that interface with the "microkernel core team" without imposing n^2 communication overhead between everyone working it, without breaking the product or making serious mistakes from not having n^2 connections
just thoughts, really. my intuition is: do everything right, and you can get log(added people) productivity increase time delayed (with a short term dip as those people get up to speed), up to, unfortunately, negative gain if you do much wrong
I don't know how successful this would be, but they could also start building and selling more apps/programs but perhaps this could be seen as anti competitive.
https://www.q4inc.com/products/investor-relations-websites/d...
Why do you think they should they make it themselves?
1) That would be very on brand for Apple
2) They're already in the business of making complex web pages, and this is the only subdomain branded with this tech, so why special case it?
I think Apple are famous for not having this core competency compared to its competitors?
> so why special case it?
Why do companies outsource anything? Why doesn't Apple employ its own janitors? Because it's not what makes them money and their engineers are astronomically expensive.
They have become a little better at this, facetime can now be joined by Android and web users as long as an ios user starts the call.
Also, many people are harmed by this tax treatment because a couple making 80k a year pay no tax on the dividend capital gains?
I am just saying dividends v share buybacks are not the same and have other effects.
Stock buybacks may drive stock prices upwards in an unpredictable way that may lead to being able to sell appreciated stock in a tax-advantaged way a couple years out.
Theoretically, it's all the same after tax effects but we don't live in that theoretical world.
These are lower than ordinary income.
Really? I am only aware that at least long term capital gains tax applies to everyone for qualified dividends.
For the 2020 tax year, you pay 0% on long-term capital gains if you have total income of $40,000 or less; 15% if you have income of $441,450 or less; and 20% if your income is greater than $441,450.
Dividends are taxed at a flat 30% rate. Capital gains are not taxed by the US. At least that's my situation.
Companies that pay heavy dividends are a substantially less attractive buy in my case.
Dividends are taxed as regular income, unless they're qualified dividends then they have their own rate.
https://www.reuters.com/technology/apple-likely-face-doj-ant...
https://www.reuters.com/technology/exclusive-eu-antitrust-re...
https://www.bloomberg.com/news/articles/2020-11-18/apple-to-...
Source: I am an iOS and android dev.
b) It's under scrutiny but the legal consensus being formed is that Apple simply needs to allow links to alternate payment systems. It doesn't need to allow sideloading or offer alternate app stores.
c) Some countries are looking at forcing Apple to offer a "choose your phone/mail/calendar app" screen on initial phone purchase which does have precedent and looks far more likely.
Whether it’s another App Store or a link either way will affect Apple’s take through the App Store.
On the other hand, might they contribute some investment to help TSMC expand into the US or other locales to further improve their priority and pricing? That is likely to happen. They often make large investments to help their partners spool up and meet the required volumes for Apple business.
"Everybody knows" that a big chunk of the M1/mac performance dominance right now is due to their buying out huge amounts of TSMC capacity at leading edge nodes. Thus, much of the recent M1/M1Pro/M1Max "great leap forward" (pun intended) are directly attributable to TSMC specifically.
If every ROI-seeking multibilliondollar hedge fund in the world can't build a leading edge node fab or two to compete with TSMC, what suggests that Apple's money would do any better?
Note that this isn't rhetoric - Apple may well be able to do this, and better than some/most; I just don't have any data at hand (myself, it may exist) to suggest that the Apple cash reserves are in any way smarter at this task than big institutional dumb money reserves (which dwarf Apple in market aggregate).
If there is one thing Apple is actually "good at", it's hiring people who are good at things they don't specialize in, and using those people to build out their own capabilities. So if Tim Cook decided that they need in-house fabs, they would use their massive cash reserves to hire and buy whoever and whatever they need to set up in-house fabs.
It sometimes certainly works strategically to deprive other companies of chips by buying up TSMC's supply, however that can also obviously work against Apple in a big way. If you really believe in your products and the demand for them, you'd want the dedicated supply from fabs you co-own.
Not the most likely scenario in my opinion, but it's how they would do it.
That sounds like good common sense, but you don't get the huge leaps in performance that we're seeing with single process advantage (7nm vs 5nm). Qualcomm has 5nm process ARM chips and they barely compete against what apple was shipping on 7nm ~2yrs ago.
> If every ROI-seeking multibilliondollar hedge fund in the world can't build a leading edge node fab or two to compete with TSMC, what suggests that Apple's money would do any better?
Apple had 0 chip designers working for them not so long ago. They saw the writing on the wall that they were not going to be able to get where they wanted to go, as quickly as they wanted to, relying on a company that didn't see the writing on the wall, and falling further and further behind. Apple had hardware engineers to design their products using chips from other companies, and software engineers to make them do something useful, and design engineers to make them pretty. Then they decided to hire some chip engineers, some really good ones at the top, because they can afford to and they had a will to and concrete purpose. On their very first attempt at a new cpu, they were running with the best of them. How long has Apple been designing chips and how does it stack up against Intels cream of the crop and how long have each been at it? I do not see why Apple would not succeed if they put their minds, money and leadership style to it.
> "Everybody knows" that a big chunk of the M1/mac performance dominance right now is due to their buying out huge amounts of TSMC capacity at leading edge nodes. Thus, much of the recent M1/M1Pro/M1Max "great leap forward" (pun intended) are directly attributable to TSMC specifically.
Right, which is exactly why I think they will start to rely less on something that is only manufactured/available in a single political hotbed of a country, Taiwan, because Apple is now reliant on the best/most advanced process only offered by TSMC/Taiwan. Those leading edge nodes are not available to TSMC plants in any other country that I'm aware of. The crown jewels are kept in-country, under tight control. China is very vocally stating that Taiwan will be "reunited" with China and being fairly hostile about it. Apple might be peering into their crystal ball, wondering what that eventually means for their heavy reliance on that single country and top of the line products that make them their money. That's a very new worry that didn't exist when they were using Intel chips, which were manufactured in multiple countries. Apples future currently lies in whatever China ends up choosing to do with Taiwan. That's a major single point of failure and scary position to be in. If I were Apple, I'd want to ensure more control over my product line into the future and history has shown that is a very big priority for them, to their benefit. I'm quite sure the China/Taiwan situation is giving everyone at Apple quite a headache. It's hard to predict and Cook's steering a trillion dollar ship. If you have the money, hedge your bets.
It would also open up an additional major revenue stream, after they've perfected it for their own products.
Edit: that said! The benefit of investing in it anyway is potentially changing the course or severity if those constraints by having more control over them.
And they surely would have a significant proportion of assets in bonds yielding a couple percent rather than stocks, so earning tens of thousands in only dividend income is probably super rare.
https://dqydj.com/net-worth-percentile-calculator-united-sta...
Apple's acquisition of PA Semi was over a dozen years ago.
I agree that the second best time to plant a tree is today, but I also think that nothing today is indicative of Apple's likelihood of success at operating a fab 5-10 years down the line from today.
They tried cars and (so far) seem to have failed. I have nothing to suggest that their odds at succeeding in chip manufacture would be anything other than 50/50.
It only makes sense to migrate to their own cloud. They're already offering Xcode Cloud. The logical step afterwards would be a public cloud. This is where the big money is.
You maintain a cash reserve so that, if there is a (hopefully) short-term market correction, you're not stuck with having to sell assets in a dip to meet payroll, etc. Not really much different from people in that regard although obviously at a different scale.
Braeburn Capital.
References:
https://www.businessinsider.com/pablo-escobar-burned-2-milli...
http://www.hoaxorfact.com/celebrities/drug-lord-pablo-escoba...
Also, I doubt there's really a matress. He just sleeps on the money directly. Stacks of banded bills is probably pretty stiff vs just loose bills all piles up organically. Like each night before bed, he takes a few new stacks of cash reserves and makes it rain before diving in.
Because the company would have gone bankrupt in the late 90s had Microsoft not given them a loan (and it's likely the only reason MS did so was because they were facing monopoly scrutiny). Jobs swore that would never happen again and made sure everyone on his executive staff and board of directors was on the same page.
https://www.businessinsider.com/how-steve-jobs-took-apple-fr...
The far more important part of that announcement was the commitment of Microsoft to continue development of Microsoft Office for the Mac. That was the single biggest symbol that Apple was going to continue. Without Office the Mac was likely doomed to an ever smaller nitch, and everyone knew it. That one commitment on Microsoft's part cemented the Macintosh's place as a big player, and kept Apple from dwindling to the point where bankruptcy would have been a real worry.
Cash and cash equivalents is the line on the balance sheet and includes things like T-Bills and other low-risk investments. Apple almost certainly does better than inflation and regardless, it's completely normal treasury management to return ~0% since if your shareholders wanted exposure to riskier assets, they'd buy those assets with their own money.
Yes, they could, however the point made above is valid - if they did that, they'd have to pay a chink of US corporate tax on it, and unless they have a use for it in the US, that'd be analogous to throwing money away.
In recent years, Apple has been taking out big loans in the US (or selling bods - same effect) collateralized by their overseas cash equivalents whenever they need an infusion of USD. Paying 2% interest is much cheaper than paying 10-15x that in taxes.
But then they'd have a massive tax bill.
Technically, a bank has a lot of rules to follow, and I do not think they want to get into that business (yet).