Choose your color scheme:
The Vette Barn Forum - A Community for Corvette Lovers  
 
Go Back   The Vette Barn Forum - A Community for Corvette Lovers > Off Topic/Babes/Other > Off Topic

Off Topic Off Topic - General non-Corvette related discussion.

Reply
 
LinkBack Thread Tools
Old 08-02-2011, 01:00pm   #1 (permalink)
Barn Stall Owner #0000
Points: 7,588, Level: 61
Activity: 0.6%
Last Achievements
 
R.Zaragoza's Avatar
 
Join Date: May 2011
Location: Rockaway N.J
Posts: 3,484
Thanks: 1,805
Thanked 318 Times in 260 Posts
Gameroom Barn Bucks: $260381
Default Apple’s Money, & GE's Money

All of us were reminded over and over and over during the last few days that Apple has more cash on hand than does the U.S. government. This coincidence means precisely nothing to either outfit. We won’t see President Obama asking Steve Jobs for a loan, nor will we see Steve Jobs offering one. Yes, the government is broke and yes, Apple has a lot of cash. But GE has almost $50 billion more than Apple, so where are all the GE stories?

There’s a mystery about Apple’s cash and that mystery has to do with Steve’s strategy for holding all that money. What’s it for? The predominant theory seems to be that Apple intends to make a huge acquisition and periodically there are rumors of Cupertino buying this big company or that, with Hulu being the latest supposed target. And maybe Apple will buy Hulu (actually, I don’t think so, but let’s assume they do) but that will still leave Steve with $74+ billion, so the Apple money story won’t be going away. I think Apple has raised all that money for the sole purpose of….. having a lot of money. I don’t think Steve intends to make any major acquisitions at all, though that says nothing about a post-Steve Apple.

The Silicon Valley corporate tendency to not pay dividends and instead accumulate vast quantities of cash was pioneered by Dave Packard at HP. Starting in the late 1950s, Hewlett-Packard was raking-in the dough but it was at the time also a privately-held company with just two shareholders — Bill Hewlett and Dave Packard. The founders could easily have demanded dividends or even, I suppose, stock buy-backs, but they were earning plenty of money and preferred to let it ride. Going further, Packard, as the money guy, didn’t like the Wall Street trend of taking on corporate debt to fund growth. The less you paid out to shareholders (both of them) he decided, the more growth could be funded internally. That’s not the way they do it anymore at HP, by the way — that habit having been broken by Fiorina, Hurd, and now Apotheker, though the last can’t really be blamed because the damage was mostly done before he came on watch.

What was pioneered at HP was later emulated at Intel and every other big Silicon Valley company right up through Apple and Cisco today. And since they all did it and their stockholders made plenty of money from capital gains, nobody much complained until fairly recently when some of these companies began paying small dividends.

But not Apple. Steve Jobs knew what it was like to be poor at Apple from 1976-77 and he knew what it was like to be really poor at NeXT in the early 1990s. So when he returned to power at Apple in 1997 Steve embraced very conservative financial practices that kept Apple awash with cash to pay for what he was sure would be inevitable missteps. All that money was an insurance policy against Steve’s own inevitable failure.

Only he didn’t fail.

His bets were bold in scope but modest in cost and hardly ever failed. So Apple’s cash accumulated and accumulated and accumulated until it reached the point where Jobs could no longer view it as an insurance policy. That’s when it became an acquisition fund — not because Steve had particular acquisitions in mind, but because thinking of it as being intended for acquisitions made not spending the money easier to do.

Apple could have made any number of acquisitions. Just as both John Sculley and Gil Amelio tried to sell Apple to Sun Microsystems and failed, Scott McNealy and Jonathan Schwartz tried to sell Sun Microsystems to Apple and failed. But Steve didn’t make any major acquisitions, saying the opportunities weren’t good enough but also knowing in his heart that buying his way to scale would kill the Apple he was slowly building in his own image.

Remember we’re now 14 years into what is probably a 20-year Apple strategy. Yes, it has evolved and expanded over time, but the strategy was always headed in the same direction. Where the typical Silicon Valley CEO thinks about this quarter and next quarter, Steve Jobs had the leisure to think about this decade and next.

When it finally became clear inside Apple that Steve really wasn’t going to buy a big company (Apple’s biggest-ever acquisition, remember, was the recent $2.4 billion purchase of Nortel’s patent portfolio, which got Steve the IP he wanted without the lovely Canadian engineers he didn’t want) the company had to find another plausible reason for holding all that money.

And so Apple today uses its cash to buy parts in huge quantities. Lately this has mainly meant buying flash RAM and iPhone displays in amounts that move whole markets and guarantee Apple the lowest prices anywhere. This is important: in an era where interest rates on idling cash are averaging one percent, Apple is using its cash to get 15-20 percent discounts on parts. That’s exactly like earning a 15-20 percent interest rate.

Apple not only gets the lowest prices, they also get the most reliable supply. I won’t call it anti-trust, but I think it is fair to say Apple has an effective consumption-side monopoly for certain mobile components.

IBM tried to do exactly this back in the days of the IBM PC-AT when Big Blue bought Intel’s entire supply of 80286 chips — a bold move that backfired when Intel fell back on second source agreements and quickly doubled production. IBM was stuck using the same 8 MHz 286 chips for nearly three years to blow through its supply, while Compaq, Dell and others jumped to the 386. That’s when IBM lost its PC market leadership position, compounding it by requiring OS/2 to work on those stockpiled 286 chips, too.

Apple isn’t IBM. Cupertino’s purchasing bets are bigger than IBM ever imagined and they’ve paid-off better, too, with Apple keeping an eye on the construction plans of its suppliers so it doesn’t make an IBM-type mistake.

For most Silicon Valley companies, then, holding lots of cash may increase financial flexibility and lower or eliminate short-term borrowing costs, but they also are a persistent drag on earnings just because there’s no way companies can make as much return on their cash holdings as they could make by rolling that money back into their business. Only Apple is a clear exception to this rule. Only Apple plays the game big and bold enough to never lose. But to do that you have to have a bigger pot than the house, or in this case the government.

I, Cringely » Blog Archive » Apple’s Money - Cringely on technology
R.Zaragoza is offline   Reply With Quote
The Following 6 Users Say Thank You to R.Zaragoza For This Useful Post:
Old 08-02-2011, 01:36pm   #2 (permalink)
Charter Member
Barn Raising II,III,IV
Points: 42,157, Level: 100
Activity: 71.5%
Last Achievements
 
Mike Mercury's Avatar
 
Join Date: Oct 2009
Location: Ohio
Posts: 14,039
Thanks: 3,556
Thanked 5,918 Times in 2,437 Posts
Gameroom Barn Bucks: $5061248
Default

Mike Mercury is offline   Reply With Quote
Old 08-02-2011, 01:43pm   #3 (permalink)
Barn Stall Owner #762
NCM Supporter '11
Points: 9,647, Level: 67
Activity: 0%
Last Achievements
 
Uncle Pervey's Avatar
 
Join Date: Jan 2011
Location: Dark Side of the Moon
Posts: 3,937
Thanks: 677
Thanked 462 Times in 310 Posts
Gameroom Barn Bucks: $191989
Default

fanboy
Uncle Pervey is offline   Reply With Quote
Old 08-02-2011, 02:14pm   #4 (permalink)
Barn Stall Owner #0000
Points: 7,588, Level: 61
Activity: 0.6%
Last Achievements
 
R.Zaragoza's Avatar
 
Join Date: May 2011
Location: Rockaway N.J
Posts: 3,484
Thanks: 1,805
Thanked 318 Times in 260 Posts
Gameroom Barn Bucks: $260381
Default

Quote:
Originally Posted by Mike Mercury View Post
R.Zaragoza is offline   Reply With Quote
Old 08-02-2011, 02:40pm   #5 (permalink)
A Real Barner
Points: 12,999, Level: 78
Activity: 8.4%
Last Achievements
 
NB2K's Avatar
 
Join Date: Jan 2011
Location: Right here.
Posts: 5,611
Thanks: 559
Thanked 758 Times in 545 Posts
Gameroom Barn Bucks: $1545408
Default

Jobs clearly has embraced Jason's Business Rule #9 which is:

"Life is like a sh_t sandwich, the more bread you have, the less sh_t you have to eat."
NB2K is offline   Reply With Quote
Old 08-02-2011, 03:08pm   #6 (permalink)
Charter Member
Barn Raising II,III,IV
Points: 42,157, Level: 100
Activity: 71.5%
Last Achievements
 
Mike Mercury's Avatar
 
Join Date: Oct 2009
Location: Ohio
Posts: 14,039
Thanks: 3,556
Thanked 5,918 Times in 2,437 Posts
Gameroom Barn Bucks: $5061248
Default

Quote:
Remember we’re now 14 years into what is probably a 20-year Apple strategy.
I don't buy that.

Jobs is lucky; at the right place - at the right time.

The only time he was a "visionary" when he was heavy into LSD/alcohol (bye-bye liver) It was Wozniak that got Apple actually producing sellable product; while at the same time Jobs was taking Cailgraphy courses in college.

Why do people insist on putting Jobes on a pedistal

* enrolled in college; but dropped out after only one semester

* traveled to India in search of spiritual enlightenment. Came back a Buddhist with his head shaved and wearing traditional Indian clothing.

* experimented with psychedelics, calling his LSD experiences "one of the two or three most important things [he had] done in [his] life".

* Stated that people around him who did not share his countercultural roots could not fully relate to his thinking.

* Who reportedly stated about Bill Gates: "He'd be a broader guy if he had dropped acid once or gone off to an ashram when he was younger."

this is not the type of person you hope your kids grow up to be.



Jobs returned to his previous job at Atari and was given the task of creating a circuit board for the game Breakout. According to Atari founder Nolan Bushnell, Atari had offered $100 for each chip that was eliminated in the machine. Jobs had little interest or knowledge in circuit board design and made a deal with Wozniak to split the bonus evenly between them if Wozniak could minimize the number of chips. Much to the amazement of Atari, Wozniak reduced the number of chips by 50, a design so tight that it was impossible to reproduce on an assembly line. At the time, Jobs told Wozniak that Atari had only given them $700 (instead of the actual $5000) and that Wozniak's share was thus $350


Wozniak = true father of Apple
Steve Jobs = carney selling shiny plated jewelry at the county fair.

Last edited by Mike Mercury; 08-02-2011 at 03:22pm.
Mike Mercury is offline   Reply With Quote
The Following 2 Users Say Thank You to Mike Mercury For This Useful Post:
Old 08-02-2011, 03:21pm   #7 (permalink)
A Real Barner
Points: 29,157, Level: 100
Activity: 52.7%
Last Achievements
 
MrPeabody's Avatar
 
Join Date: Dec 2010
Posts: 15,059
Thanks: 4,132
Thanked 3,693 Times in 2,121 Posts
Gameroom Barn Bucks: $173797
Default

Quote:
Originally Posted by Mike Mercury View Post
I don't buy that.

"Jobs is lucky."

The only time he was a "visionary" when he was heavy into LSD/alcohol (bye-bye liver) It was Wozniak that got Apple actually producing sellable product; while at the same time Jobs was taking Cailgraphy courses in college.

Why do people insist on putting Jobes on a pedistal

* enrolled in college; but dropped out after only one semester

* traveled to India in search of spiritual enlightenment. Came back a Buddhist with his head shaved and wearing traditional Indian clothing.

* experimented with psychedelics, calling his LSD experiences "one of the two or three most important things [he had] done in [his] life".

* Stated that people around him who did not share his countercultural roots could not fully relate to his thinking.

* Who reportedly stated about Bill Gates: "He'd be a broader guy if he had dropped acid once or gone off to an ashram when he was younger."



Jobs returned to his previous job at Atari and was given the task of creating a circuit board for the game Breakout. According to Atari founder Nolan Bushnell, Atari had offered $100 for each chip that was eliminated in the machine. Jobs had little interest or knowledge in circuit board design and made a deal with Wozniak to split the bonus evenly between them if Wozniak could minimize the number of chips. Much to the amazement of Atari, Wozniak reduced the number of chips by 50, a design so tight that it was impossible to reproduce on an assembly line. At the time, Jobs told Wozniak that Atari had only given them $700 (instead of the actual $5000) and that Wozniak's share was thus $350


Wozniak = true father of Apple
Steve Jobs = carney selling shiny plated jewelry at the county fair.
Woz was the tech guy, Jobs was the salesman. That was always the conventional wisdom in Silicon Valley when I lived there in the 70s and 80s.
MrPeabody is offline   Reply With Quote
Old 08-02-2011, 03:41pm   #8 (permalink)
Barn Stall Owner #12
Barn Raising I
NCM Supporter '11, '12
Points: 17,552, Level: 91
Activity: 0%
Last Achievements
 
BuckyThreadkiller's Avatar
 
Join Date: Oct 2009
Location: Dammit, I was told there would be pie.
Posts: 5,501
Thanks: 162
Thanked 2,258 Times in 1,045 Posts
Gameroom Barn Bucks: $167887
Default

How is that Mike? Once upon a time Apple was tits up, all but dead - Jobs gone, Woz gone and Gil Ameilo and a Soft Drink Guy trying to kill it and sell the corpse. The stock was $13.

The ONLY thing that really changed was Jobs came back. Saw broadband internet as the future and greenlighted easier ways for people to get on it - the iMac - which was completely true to his and Woz' original vision - computers should be easier for people to use.

The iMac led to the iPod and iTunes - an easier way to buy music and put it on your mp3 player. (people think the iPod was revolutionary but the real advance was iTunes). The iPhone is nothing more than that same "easier to use" philosophy in a pocket device that merged PDAs, mp3 players and a phone. Scale that up to something that's easier to navigate with a finger and you have the iPad.

Lucky? Maybe once when he and a few others stumbled into Xerox PARC, but he's had the guiding principles for Apple since the get go. Only when they have moved away from those ideas has the company gone down the crapper.

I don't agree with a lot of his decisions, but as a stockholder and user -I think the guy's a genius.
BuckyThreadkiller is offline   Reply With Quote
Old 08-02-2011, 03:44pm   #9 (permalink)
A Real Barner
Points: 29,157, Level: 100
Activity: 52.7%
Last Achievements
 
MrPeabody's Avatar
 
Join Date: Dec 2010
Posts: 15,059
Thanks: 4,132
Thanked 3,693 Times in 2,121 Posts
Gameroom Barn Bucks: $173797
Default

Quote:
Originally Posted by BuckyThreadkiller View Post
How is that Mike? Once upon a time Apple was tits up, all but dead - Jobs gone, Woz gone and Gil Ameilo and a Soft Drink Guy trying to kill it and sell the corpse. The stock was $13.

The ONLY thing that really changed was Jobs came back. Saw broadband internet as the future and greenlighted easier ways for people to get on it - the iMac - which was completely true to his and Woz' original vision - computers should be easier for people to use.

The iMac lead to the iPod and i Tunes - an easier way to buy music and put it on your mp3 player. (people think the iPod was revolutionary but the real advance was iTunes). The iPhone is nothing more than that same "easier to use" philosophy in a pocket device that merged PDAs, mp3 players and a phone. Scale that up to something that's easier to navigate with a finger and you have the iPad.

Lucky? Maybe once when he and a few others stumbled into Xerox PARC, but he's had the guiding principles for Apple since the get go. Only when they have moved away from those ideas has the company gone down the crapper.

I don't agree with a lot of his decisions, but as a stockholder and user -I think the guy's a genius.
Ever notice that in business, the "lucky" guys tend to make their luck?

I read years ago that the average Silicon Vally success story had three or more failures behind him.
MrPeabody is offline   Reply With Quote
Old 08-02-2011, 03:48pm   #10 (permalink)
Barn Stall Owner #8
Points: 5,043, Level: 48
Activity: 1.8%
Last Achievements
 
high desert's Avatar
 
Join Date: Jan 2011
Location: I'm sittin' in a bar on the inside, waitin' for a ride on the outside in Verdi, NV
Posts: 1,848
Thanks: 163
Thanked 192 Times in 136 Posts
Gameroom Barn Bucks: $90676
Default

Since AAPL is run by a bunch of liberals, it would be nice if they lived by their own philosophy and "spread the wealth" in the form of a dividend to shareholders.
high desert is offline   Reply With Quote
Old 08-02-2011, 03:51pm   #11 (permalink)
Barn Stall Owner #12
Barn Raising I
NCM Supporter '11, '12
Points: 17,552, Level: 91
Activity: 0%
Last Achievements
 
BuckyThreadkiller's Avatar
 
Join Date: Oct 2009
Location: Dammit, I was told there would be pie.
Posts: 5,501
Thanks: 162
Thanked 2,258 Times in 1,045 Posts
Gameroom Barn Bucks: $167887
Default

Their philosophy is if you have cash to buy parts you can save 15% over your competitors.
BuckyThreadkiller is offline   Reply With Quote
Old 08-02-2011, 03:55pm   #12 (permalink)
Vette Barn Crew
NCM Supporter '11
Points: 8,077, Level: 62
Activity: 10.6%
Last Achievements
 
American Made's Avatar
 
Join Date: Jan 2011
Location: My Empire of Dirt ....Los Angeles
Posts: 2,847
Thanks: 379
Thanked 560 Times in 440 Posts
Gameroom Barn Bucks: $553237
Default

Quote:
Originally Posted by high desert View Post
Since AAPL is run by a bunch of liberals, it would be nice if they lived by their own philosophy and "spread the wealth" in the form of a dividend to shareholders.
Like Berkshire Hathaway?
American Made is offline   Reply With Quote
Old 08-02-2011, 03:57pm   #13 (permalink)
Charter Member
Barn Raising II,III,IV
Points: 42,157, Level: 100
Activity: 71.5%
Last Achievements
 
Mike Mercury's Avatar
 
Join Date: Oct 2009
Location: Ohio
Posts: 14,039
Thanks: 3,556
Thanked 5,918 Times in 2,437 Posts
Gameroom Barn Bucks: $5061248
Default

Quote:
Originally Posted by BuckyThreadkiller View Post
How is that Mike?

The ONLY thing that really changed was Jobs came back. Saw broadband internet as the future and greenlighted easier ways for people to get on it - the iMac - which was completely true to his and Woz' original vision - computers should be easier for people to use.

Jobs came back - and they hired more Wozniak type engineers; that he did know to do.

I doubt Steve Jobs could change batteries in a flashlight. He can't enter one line of code, nor can he design a circuit; you're giving all the credit to the wrong person.

I'm waiting for someone to give him credit for the point & click GUI...

Apple is a great company; I was involved with them for 3 years in the mid 1990's.

Last edited by Mike Mercury; 08-02-2011 at 04:20pm.
Mike Mercury is offline   Reply With Quote
Old 08-02-2011, 04:17pm   #14 (permalink)
Barn Stall Owner #12
Barn Raising I
NCM Supporter '11, '12
Points: 17,552, Level: 91
Activity: 0%
Last Achievements
 
BuckyThreadkiller's Avatar
 
Join Date: Oct 2009
Location: Dammit, I was told there would be pie.
Posts: 5,501
Thanks: 162
Thanked 2,258 Times in 1,045 Posts
Gameroom Barn Bucks: $167887
Default

Quote:
Originally Posted by Mike Mercury View Post
Jobs came back - and they hired more Wozniak type engineers; that he did know to do.

I doubt Steve Jobs could change batteries in a flashlight. He can't enter one line of code, nor can he design a circuit board.

Apple is a great company; I was involved with them for 3 years in the mid 1990's.

You're giving all the credit to the wrong person.

I must re-ask the question; why is it so important for people to put Jobs on a pedistal
I seriously doubt Leonard Bernstein could play violin well enough to get a chair in most of the orchestras he conducted.
Get enough engineers together to design circuit boards and write code and you can also have a very expensive toaster.

Wozniak invented the personal computer - Jobs invented Apple.

The split adjusted price of Apple stock when Jobs returned as CEO in 1996 is about 6 bucks. Lately it's been right around $400. Under his guidance as CEO they have revolutionized the music business, the mobile phone business and created the tablet computer market.

Why can you not see where the credit for this belongs?

Think it's just Apple? He also has been the CEO of another little company called Pixar since 1986. They've done OK under his reign and I bet he can't draw worth a crap.
BuckyThreadkiller is offline   Reply With Quote
The Following User Says Thank You to BuckyThreadkiller For This Useful Post:
Old 08-02-2011, 04:24pm   #15 (permalink)
Charter Member
Barn Raising II,III,IV
Points: 42,157, Level: 100
Activity: 71.5%
Last Achievements
 
Mike Mercury's Avatar
 
Join Date: Oct 2009
Location: Ohio
Posts: 14,039
Thanks: 3,556
Thanked 5,918 Times in 2,437 Posts
Gameroom Barn Bucks: $5061248
Default

Quote:
Originally Posted by BuckyThreadkiller View Post
Wozniak invented the personal computer - Jobs invented Apple.
that's a good statement; I'd agree.

Quote:

Think it's just Apple? He also has been the CEO of another little company...
uhh NeXT ???
Mike Mercury is offline   Reply With Quote
Old 08-02-2011, 04:25pm   #16 (permalink)
A Real Barner
Points: 12,999, Level: 78
Activity: 8.4%
Last Achievements
 
NB2K's Avatar
 
Join Date: Jan 2011
Location: Right here.
Posts: 5,611
Thanks: 559
Thanked 758 Times in 545 Posts
Gameroom Barn Bucks: $1545408
Default

A long time ago I learned that knowing how to fix things doesn't mean you know how to run a business that fixes things.

Lots of folks make that mistake...
NB2K is offline   Reply With Quote
Old 08-02-2011, 04:45pm   #17 (permalink)
Barn Stall Owner #727
Points: 4,501, Level: 45
Activity: 3.3%
Last Achievements
 
Poog's Avatar
 
Join Date: Jan 2011
Location: NJ
Posts: 2,733
Thanks: 1,496
Thanked 188 Times in 156 Posts
Gameroom Barn Bucks: $7212
Default

Quote:
Originally Posted by BuckyThreadkiller View Post
I seriously doubt Leonard Bernstein could play violin well enough to get a chair in most of the orchestras he conducted...
That's probably because he was a pianist...

Poog is offline   Reply With Quote
Old 08-02-2011, 05:08pm   #18 (permalink)
Barn Stall Owner #12
Barn Raising I
NCM Supporter '11, '12
Points: 17,552, Level: 91
Activity: 0%
Last Achievements
 
BuckyThreadkiller's Avatar
 
Join Date: Oct 2009
Location: Dammit, I was told there would be pie.
Posts: 5,501
Thanks: 162
Thanked 2,258 Times in 1,045 Posts
Gameroom Barn Bucks: $167887
Default

Quote:
Originally Posted by Mike Mercury View Post
that's a good statement; I'd agree.



uhh NeXT ???
NeXT became the underpinnings for Mac OSX and the way Apple systems work today.

Quote:
Originally Posted by Poog View Post
That's probably because he was a pianist...

Perzactly my point.


Jobs is the Vision guy - I doubt he can program a web page or solder worth a squat, but he knows what works and what doesn't. He claims to have done product assembly back in the old days and ordered chips hissownself.

I understand he's a tremendous asshole to work for and from what I've read his management style is somewhere between bi-polar tyrant and bully, but it seems to work.
BuckyThreadkiller is offline   Reply With Quote
Reply

The Vette Barn Forum - A Community for Corvette Lovers > Off Topic/Babes/Other > Off Topic


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On



All times are GMT -4. The time now is 09:22pm.


''
Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
ShowCase vBulletin Plugins by Drive Thru Online, Inc.

Search Engine Friendly URLs by vBSEO 3.6.0 RC 1
Copyright 2009 - 2014 The Vette Barn