Apple Inc. (NASDAQ:AAPL) has been piling up cash over the years, even during the couple of “terrible” quarters recently when Apple set revenue records. In its last earnings report, it was revealed that Apple had nearly $150 billion (that is with a “b,” not a typo) in cash on hand and it was just sitting there. How much cash is that? It’s the current market capitalization of Nokia Corporation (ADR) (NYSE:NOK), times 11.
Apple Inc. (NASDAQ:AAPL) was being accused of being a cash hoarder by some, including billionaire hedge-fund manager David Einhorn of Greenlight Capital, who filed a lawsuit against Apple. Why was Apple holding that much money, when there were no indications of any major acquisition coming? Finally, recently Apple announced that it would increased its dividend this year and it would pursue a more aggressive buyback of its stock to give some of the cash to investors. But when will this happen?
When will Apple Inc. (NASDAQ:AAPL) take the advice of Cuba Gooding Jr.’s character in “Jerry Maguire” and show its investors the money? Brian Marshall, managing director of ISI Group, went on CNBC Wednesday to discuss the “Jerry Maguire” moment for Cupertino. “Well, if you had asked me this question 30 days ago, I would have said, ‘within a month.’ I’m actually pretty surprised they haven’t done it yet,: Marshall said. “I’m not quite sure what they’re waiting for, but I do think it’s imminent. The investors want it to happen, the company wants it to happen; I’m not sure what the hurdles are right now.”
When asked about the upcoming iPhone refresh being dubbed the iPhone 5, Marshall admitted there is no consensus as to what the specs will be. “I think they have to migrate to a 5-inch screen this summer,” he said. “No one seems to think that will happen, but if it’s going to happen, we’ll likely have to hear about it from the supply chain in the next 30 days. I think they have to migrate to the larger screen or they will lose a lot of market share. If they just come out with a refresh of the current iPhone with the 4-inch screen, I think that will be a pretty dramatic disappointment in my opinion.”
Later in the interview, Marshall discussed what he considers the immediate to-do list for Apple Inc. (NASDAQ:AAPL) to continue its market lead and to resume its growth curve. The first priority, he said was to develop a smatphone with a 5-inch screen to keep up with companies like Samsung Electronics Co. Ltd., which has already introduced such a device to market; second, develop a lower-cost smartphone to generate some penetration in international, emerging markets like China, India and Brazil; and a distant third was returning some of that cash stash to investors either in the form of a larger divident or a stock buyback program that was more aggressive than originally established.
The full video clip can be found on the next page.