Global technology major Apple’s cash has been piling up enormously. The Cupertino giant’s cash reserve in the fiscal second quarter is reportedly over a quarter-trillion dollars. With such a huge war chest in its pocket, speculations are rising about whether the world’s most valuable company will use a part of it to expand its empire, through some major acquisition(s). By major, we mean Tesla Motors and Netflix, according to the various rumours doing the rounds, as reported by Associated Press. Both the deals are quite likely since Apple has been open about its interest in the TV service industry as well as self-driving cars.
However, interestingly some of the recent rumours suggest that Apple might do something extremely dramatic by attempting to bid for Walt Disney Co as well. If this happens, there is a chance that the world may see its first trillion dollar company, as together Apple and Disney will bring together the most popular brands in entertainment and tech, including names like iPhones, Macs, Pixar, Marvel, ESPN, Disneyland and Lucasfilms. According to a report in AP, such a rumour has struck fear among the best in Hollywood and Silicon Valley. The same 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.”
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According to Apple, in its latest quarter, the earnings have climbed 5 percent to $11 billion while revenue has also risen by 5 percent to nearly $53 billion. 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.
Meanwhile, doing a major deal as it is speculated, Apple will be departing from its character. This is because, the company’s biggest acquisition till now has been Beats Electronics, which cost $3 billion 2014.
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.
Yet, Apple may be seriously thinking about the mega-deal, since US President Donald Trump and the Congress are likely to change rules on repatriation of cash stored overseas, according to various agency reports. If this happens, it will be easier for Apple to spend some of the cash from its overseas accounts without taking a big tax cut.