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Investors Will Get A Tiny Slice Of Apple's Pie


Apple iPad 3rd generation
Mobile gadgets such as the iPad and iPhone have left Apple flushed with cash

Apple has announced to the world what it intends to do with at least some of its enormous pile of money. Those hoping for some grand philanthropic gesture, such as free iPads for school kids, will be disappointed, as will those expecting Apple to make a juicy acquisition, like snapping up a major media corporation.

However, if you were a shrewd investor and bought Apple shares back when they were worth much less than now, then you are in luck, up to a point. Apple has almost $100 billion ($98bn to be slightly more exact) in cash assets (£62bn, give or take a few pounds) and its stock market value is around $500bn, making it the planet's most highly valued company.

Apple iPad 3rd generation

From the fourth quarter of 2012, Apple plans to spend more than $10 billion a year on a share repurchase programme, rising to a total of $45 billion over the next three years. It also intends to pay a quarterly dividend of $2.65 per share in its fiscal fourth quarter, which begins on 1 July this year. That amount is only worth a small fraction of the shares' value and even this plan is subject to approval by Apple's board of directors.

Since 1995 and under Steve Jobs' recent stewardship, Apple had not paid any dividends. During the late 1990s Apple came close to bankruptcy. In true rags to riches form, its commercial success over the last few years is generating far more cash than it actually needs to run the company.

Announcing the new financial arrangements, Apple's new CEO, Tim Cook, said: "We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You'll see more of all of these in the future."

He added: "Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program."

Apple will still have the money and the opportunity to do something really interesting in the long term, so we'll have to sit tight until we find out what that is going to be.

Go to comments

Nav Garayal

March 19, 2012, 9:14 pm

Dear TR, how does this article have any relevance to your website other than show you as being Apple fan boys? Surely, there is something more meaningful to write? You do realise that companies exercise share by back schemes simply to boost ROE right?


March 20, 2012, 9:21 am

Wow, that's a nice line in unjustified vitriol you've got there. Trusted Reviews is a technology news and reviews site. Apple is the world's largest company and a hugely important player in the technology industry. I'm sure a lot of TR's readership is interested in hearing about Apple's business decisions, be that decision to buy up a promising start-up, a decision to build a new data centre, or a decision to pay a dividend to shareholders for the first time in almost 2 decades. If you're not interested, you don't have to read it. If seeing these articles on the front page offends you, you could always go elsewhere for your (free) technology news.


March 20, 2012, 11:27 am

I'd say it's pretty darned interesting industry news that after 17 years not paying any dividend, Apple is now paying a measly one. Moreover, it's pretty big news what the world's most valuable company plans to do with its vast fortune.

Captain Kirk

March 20, 2012, 2:15 pm

Dear TR please continue reporting on all technology news & reviews so that your readers can continue to decide which articles they wish to read.


March 20, 2012, 3:50 pm

I wonder why is it considered "measly"? Seems to be well within the industry average.

The question now is what the remaining dividend-less giants - Amazon (18 years) and Google (14 years) - will do now to avoid sticking out like sore thumbs.


March 20, 2012, 3:54 pm

Btw, I know TR sometimes takes it time with news, but maybe you'd like to report that Apple sold 3 million new iPads in the 3 days it's been on sale. Not as many sold as there are pixels in the iPad, but pretty close.

No rush of course, any day between now and next weekend (when sales start in >20 more countries) should be fine to still count as news.

Nav Garayal

March 20, 2012, 4:22 pm

I am sorry but this article offers no insight to what Apple may do. It is merely glorifying the financial position of Apple. How is the payment of a dividend interesting? Most Nasdaq stocks generally have relied on capital growth as an investment hook and not dividend income...will this article make us go out and buy apple stock at $400 with the hook of an $8 divy? I think not. Furthermore, All companies make strategic acquisitions etc so your general comment is neither here nor there. The only thing I can see which is of interest is the legal fees that Apple pays to block the likes of Samsung from competing...and yes I own Apple products...and if you don't fully comprehend share buy back schemes and their purpose please dont report on them as it makes TR look silly.

Nav Garayal

March 20, 2012, 6:03 pm

@GK...i am one of those 3m ipad 3 customers! but to be perfectly honest my main motivation for buying it was to act as a controller for my Meridian Sooloos. I also have the blackberry playbook which i felt was poorly reviewed and under rated.


March 20, 2012, 9:30 pm

>> please dont report on them as it makes TR look

Well something is looking silly, not sure it's TR though.
And how can it be seen as Apple fanboys, TR have reported on Google/HP/Facebook/HTC and numerous Tech share prices in the past.

Even the BBC see this as Tech news, are you saying the BBC are Apple Fanboys too..

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