Apple is said to announce what they plan to do with their giant pile of cash tomorrow. Granted anything is possible, some ideas:
- Dividend – Boring, but the only thing that will please investors if they return it all. One time large and then reoccurring. Anything less and Wall Street will be disappointed. Obviously.
- Buyback Stock – Possible, but doesn’t sound likely.
- Buy A Telecom – This is actually possible, though not likely. T-Mobile’s acquisition by AT&T failed. Sprint has been rumored to be a target forever now. Apple could benefit from owning the ecosystem and making it into a Kindle like environment. Huge investment, but long-term benefits are obvious. The ugly and complicated in the iPhone business is the telecoms. Apple hates ugly and complicated.
- Build A Telecom – Kinda like the above, but slightly different approach.
- Buy Up Or Replace Key Vendors – This isn’t impossible. For example, Samsung’s LCD business in-house would mean adequate supply and design opportunities for Apple’s products (MacPro is the loner in major no-screen devices). Battery vendors working in-house would mean emphasis on what Apple needs: more power density and strategic development that would enhance Apple’s designs. It also means ample capacity for Apple’s production needs. Lastly it means a step ahead of the competition. While competitors shop around for something that meets their needs, Apple can build what they dream up. Apple’s purchase of P.A. Semi a few years ago shows this is a strategy they are willing to use.
I’d bet on dividend, but anything is possible.