Chillin' out till it needs to be funded
Apple, the world’s most applauded innovator survived on a culture of innovation that suggested any Dividen payouts would be an inefficient use of cash till the hoard hit $100 bln and the founder Steve Jobs left unfortunately in October 2011. Apple has not paid dividends since 1995. Founder Steve Jobs rejoined as Chairman in 1997 when he also bought over his other venture NeXT into the Apple fold while Pixar folded into Disney with Steve Jobs as its largest shareholder in 2006.
Apple has not paid a single penny in dividend since Steve Jobs returned to revitalise the company even as it spun out an innovation ealmost every year, with last quarter iPhone selling 37 mln pieces and the new iPad 15.5 mln. Even the outdated iPod sold another 15 mln world wide in a single quarter and iMacs are still growing their franchise as Apple’s uniquely designed retail pops a $6 bln year in 2011. Discussions on use of the cash stack started surfacing early in 2011 when Corporate America’s hoard was singled out as the single most promising factor for the US Economy.
However, all of 2011 went by without any decisions regarding the cash Apple had added up over the years and shareholders did not mind taking it to $600 early last week before the launch of the resolutionary iPad3. iPad has made few mistakes with its product launches enabling its unique combination of Jobs’ charisma and user leading innovation for a launch impact unparalleled by any marketing department thru history from IBM, Coca Cola and Ford to McDonalds, Marlboro and AT&T.
The World’s #1 Brand which beat its competitors Google and Microsoft decimating their attempts at comebacks, has been unquestioned in its supremacy with iOs, with the iPod design and cover flow and much more that has redefined the digital world also and bridged a gap in consumer psychographics which had otherwise kept the digital and the internet a poor cousin of Consumer markets for almost 20 years.
The question if any, as the stock celebrates a big stock purchase program and announces a first quarterly dividend of a $2.65% a yield of 2% on its astronomical stock price, is whether the World #1 is just another stock market success now or does it have the DNA to succeed with new innovations down the road after the iPad and the Apple Tv without Steve Jobs. However, that does not stop Apple from leading others into a Orwellian/Huxleyian “Brave new World” without the appendages of a Windows 3.1 hanging out of my Goodies Tech Tv breakfast.
The share buyback program is launched in October as Apple enters its next Fiscal to reward the investors from the cash build up After the payouts, even assuming a rising dividend to 2% of a $1 Tln Market Cap, the company would be left with $67-8 bln in cash to invest in new ideas for the Apple assembly line of lifestyle changing, feature rich, complex, inimitable, clear winners for the Global consumer.