Thursday, October 20, 2011

Apple and Google’s Billions In The Bank – It’ll Stay There, Microsoft and Others Likely To Do the Same

One of the thing that Apple, under Steve Jobs’ guidance, is its uncanny ability to be so surgical in its where they put their innovative energy and what specific technologies to innovate and bring to the market.  At the same time, this uncanniness also extends to its ability to time it just right to bring the technology to market.  Which brings me to the $80+ billion that Apple has stashed away in various accounts and long/short-term investments.

While some companies have caved into pressures to buy back stocks to boost values or to give some of that money back for whatever reasons, Apple has resisted this call.  And as a mobile fan, you have that to continue.  No money for stock buybacks or dividends.  Some today but in today’s heated war in computers and mobile, you want companies to build up huge war chests to go after opportunities.

This goes for Google as well as Microsoft.  Google isn’t issuing dividends or giving money back to the shareholders in other ways.  I predict that Microsoft will probably stop doing it for a while.  They need their billions and here’s why.

For all those who are clamoring for Apple to open up its wallets, they simply don’t get it.  What Apple, Google, Microsoft, and others are doing is fighting for not only specific markets.  It’s not only about mobile dominance.  It isn’t trying to get ahead in the video or music market.  Nor is it about clouding around with new server farms or apps.

It’s about fighting to shape the future.  This is the vision thing that everyone says Steve Jobs is so good at.  This is about Larry Page’s vision for the future surrounding Google’s webapps.  It’s also whatever vision that Microsoft has.

I have had some personal experience in this matter.  Our businesses issued dividends to our partners from time to time but those are quite rare. We build up cash and when needed, we invested them in difficult times, to secure supplies and our positions in the market, and always knew that when opportunities presented themselves, we could always seize the moment.

This is the same for my personal finances.  So, I get why these tech giants are doing with their cash.  I just don’t get why the “always wrong” and overpaid Wall Street guys don’t.

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