Apple ends up with a huge pile of cash, assisted by huge sales in October-December quarter – Part 1

Apple release its iPad 2 in the summers and iPhone 4S at the start of the winter. The couple of gadgets are Apple’s flagship products make most of the bread and butter these days.

The holiday season including Black Friday, Thanksgiving, Cyber Monday and Christmas, is famous and optimal for huge sales of electronic products either for daily use or for gifts. Apple with a portfolio of the products like Macbook Air, iPod and of course iPad and iPhone, is the favourite company for customers on these occasions.

However, the timing of the release of iPhone 4S was best suited for the holiday season and the company made phenomenal sales. On Tuesday evening, the company released the reports on the sales during October-December quarter.

One of the more intriguing elements of Apple‘s post-report earnings call this afternoon was CFO Peter Oppenheimer’s comment that the company is actively looking at what to do with its now $97.6 billion pile of cash and securities.

The Street has been nagging the company for months – years – on the increasingly large position, but it has consistently declined to buy back stock or pay a dividend, and it has made very few acquisitions, and none of substantial size. So the cash keeps stacking up.

Oppenheimer didn’t give a lot away here, but on at least three occasions during the call – a couple of them in response to questions from analysts intrigued by the fact that he had brought the subject up himself during the company’s prepared remarks – the Apple CFO said that they were “actively” looking at what to do with the cash.

Oppenheimer noted that they are aware of the options, which include buying back shares, paying dividends and making acquisitions – but also using the cash in the supply chain to assure a sufficient supply of components for all of the company’s products. As Gartner pointed out earlier today, Apple is now the single largest consumer of semiconductor components in the world. And given that it is outgrowing its market in pretty much every category, that position is likely to be strengthened over time.

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Posted by Usman Khalid on Jan 25 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.