Apple has a new milestone to boast of. The tech major has reported over $256 billion in cash and marketable securities. The quarter-trillion cash reserve that the Cupertino giant has piled up is more than Google, Microsoft and Amazon’s total cash, according to rating agencies. Incidentally, Apple’s total cash is so huge that it is more than 2/3rd of India’s total foreign exchange reserve. In terms of cash and equivalents, Microsoft has $126 billion, Alphabet, the owner of Google, has $92 billion and Amazon has $22 billion, all according to data released by Moody’s. Additionally, social media giant Facebook reported its quarter one earnings recently, and it was $29.45 billion.
While these numbers are truly astonishing, to give you a perspective, according to the last Reserve Bank of India report on April 28, India’s Foreign Exchange Reserves stands at Rs 23,964.90 which is equivalent to $371.13 billion. This means Apple has almost 70 percent cash as that of India’s foreign exchange reserve. According to a WSJ report, Apple’s cash is more than the foreign reserves of the UK and Canada, combined. In terms of companies, it is more than big ones like Verizon, Oracle, Walmart, Visa among others. Apple has reported a huge $88 billion in debt, but even that amount looks meagre when compared with the quarter of a trillion.
With such a huge war chest in its pocket, speculations are rife, that the world’s most valuable company will use a part of it to expand its empire, through some major acquisition(s) like Tesla Motors, or Netflix or Walt Disney, according to an Associated Press report. Several agencies have reported that US President Donald Trump might change rules on repatriation of cash stored overseas, which could mean that Apple might bring in some of those dollars in the US. Apart from the possible major-acquisition, Apple might spend the cash in paying its debts, more R&D, advertising (since it does it much lesser than rivals), building a plant in the US, compete with Amazon and Microsoft in cloud computing, among many other probabilities.
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The deals with Netflix and Tesla Motors are quite likely since Apple has been openly interested in the TV service industry as well as self-driving cars. But the most interesting speculation is about a Disney acquisition, as there is a chance that the world may see its first trillion dollar company. If the deal happens, Apple and Disney together will bring the most popular brands in entertainment and tech, including names like iPhones, Macs, Pixar, Marvel, ESPN, Disneyland and Lucasfilms, on one platform. An AP report quoted Apple’s Chief Financial Officer Luca Maestri as saying, “We are looking at every size of the acquisition, so we will see how it goes going forward.” However, experts and analysts are however wary of Apple’s plans, as most of its revenue has been based on its iPhone sales (2/3rd according to the company); and it is a highly vulnerable market since it has not brought out a hit product since Steve Jobs death.
Last year, Apple’s earnings report for the January-March quarter was $233 billion but this year it has managed almost $257 billion in cash and marketable securities. Completing a major deal as speculated, Apple might be on the way to make dramatic new acquisition headlines. This is because, the company’s biggest acquisition till now has been Beats Electronics, which cost $3 billion 2014.