Apple Inc. (AAPL): How to Spend $170 Billion

Buy out the competition (Not likely)
Apple likes control. Didn’t we cover that in the last option? So why not take that control to the extreme?  They’ve got the cash to do it. Just buy the entire market! Worried about Pebble and the Nike Fuelband in the watch space? Apple could easily afford these businesses/segments and dominate the … oh wait, Samsung is making a watch too. Scrap that.

Control the supply chain (Likely)
Controlling the supply chain seems like the perfect move for the iEmpire. It would allow them to cut component cost by eliminating the profit margin charged by their suppliers. Let’s 80/20 Apple’s product components to find out where they could get the most bang for their buck.

The iPhone and iPad make up the 80 of Apple’s sales. The display in both the iPad and the iPhone represents the single highest purchased component. The glass for these displays is made by Corning Incorporated (NYSE:GLW) in a proprietary process Apple had a hand in. Corning has also figured out a way to produce bent glass that would be perfect for the rumored iWatch. The processor costs over $10/iPhone. That comes from Samsung so nothing doing there, but … Broadcom Corporation (NASDAQ:BRCM) makes a wireless chip that handles Wi-Fi and Bluetooth connections on the device” as well as a GPS chip used in the iPhone. Their current market cap is a meager $20 billion; peanuts for a behemoth like Apple.

Which of the options above are your favorites?

The article How to Spend $170 Billion originally appeared on Fool.com and is written by Robbie Laney.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.