Friday Grok: Apple’s $76 billion cash pile

Jobs dead, but there’s always tomorrow and tomorrow

Steve Jobs died yesterday; you may have read that somewhere. Very quickly as the day progressed the story became less about Jobs and more about us. Speaks volumes really.

For affluent, western, middle class consumers this was another Lady Di moment. Or maybe a John Lennon moment or a JFK moment, depending on your vintage.

The sun rises and the world moves on. Nobody really knows how those poor indentured servants in the factories in China who produce the shiny, shiny toys that brought Jobs his popularity and celebrity felt about it, or if they even knew.

Grok never met Jobs — just like 99.999 per cent of the people writing about his death yesterday and today. So we can’t say whether he was a good guy, or a bad guy, or whether like most very successful people he could effortlessly carry two utterly contradictory ideas through the working day with no regard to the moral ambiguity of this conflict.

We can say with certainty however, that he was a successful guy in business, so let’s restrict our journalism to that idea.

The most illuminating piece of writing yesterday Grok could source anywhere in the world came from a local writer, Jonathan Shapiro, at the Australian Financial Review. Shapiro writes about debt for the Dealbook section of the Fin’s website. Debt market journalism is to finance writers what storage journalism is to IT writers: Nobody ever volunteers.

And that’s a shame, because in both instances it's where you always find the story.

Dealbook focuses on the big transactional part of the market. That’s the part where Steve Jobs and all the other celebrity CEO’s actually work, in between rare appearances at user festivals or tech trade shows.

The story’s cleverness was to focus on Jobs' legacy — but not the legacy strangers imagined at #iSad on Twitter (quickly overtaken this morning by #evenifyoupaidmeiwont.)

Rather 'After Jobs, Apple will face questions about cash' discusses the $76 billion — yes that’s “b” for billions — in cash Apple is currently sitting on.

This extraordinary cash mountain is the largest pile of loot ever assembled by a US company.

Apple “has so much money, generated from the sale of its products, that it set up a separate company in 2006 to manage its holdings, Braeburn Capital, based in Reno, Nevada. It is a little known fact that Braeburn is a large buyer in short-term cash issued by Australian big four banks, so some of the surplus cash generated from the sale of Apple products is helping to fund your mortgage.”

And money on hand is important to IT companies in particular as the product cycles — when you get to cash in on your rare moment in the sun — are so short.

“The 20 largest tech companies hold $US334 billion of cash, of which the top five — Apple, Google, Cisco, Microsoft, Oracle — hold $US200 billion,” according to the report.

And here’s where the significance of yesterday’s news intrudes into the story. The writer suggests that Jobs’ death may represent a turning point, when under new leadership and with diminishing growth prospects in the world economy, innovation starts to slow.

Perhaps those shareholders may start wanting some of that huge reserve back in their own bank accounts, rather than Apple’s. After all, who’s to say Apple is any better at investing the cash than they themselves. And that’s the point — it is their money, after all.

As to the other angle to the story, the one everybody was actually talking and tweeting about yesterday, let’s leave the final words to Jobs himself, from the commencement address he gave at Stanford University in 2005, in part reflecting on his own reaction to discovering he had pancreatic cancer:

“No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away.”

Some other news, sure

Two other stories of note worth pursuing if you still have the inclination after that last paragraph. The AFR also noted that Microsoft may have resumed its quest to buy Yahoo. Presumably the asking price has dropped. A lot.

Meanwhile Business Insider reported that the Facebook is now as big as the whole internet was in 2004. Or more precisely, that it has more users than the internet had in 2004. Take a moment to consider that. Tomorrow and tomorrow and tomorrow belongs to Mark Zuckerburg.

AndrewBirmingham2010@me.com is a former associate publisher of the Australian Financial Review. His daily grok column for @computerworldAU is a tale told by an idiot, full of sound and fury, signifying nothing. In that regard this morning he is not alone.

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