Nick Bilton, in a column for The New York Times:
Big technology companies have a problem anyone would love to have: They are sitting on vast amounts of cash.
Apple top[s] the list, with nearly $159 billion. A decade ago, before the iPhone came along, the company was holding about $5.5 billion.
Laid out in dollar bills, Apple’s current stockpile would cover around 630 square miles. Apple seems happy to let its trove sit untouched, though the company hasn’t said why.
That’s not true. The company actually has said why. In 2010, Steve Jobs said, “We’re a large enough business now, that in order to really move the needle, we’ve got to be thinking pretty bold, pretty large. And who knows what’s around the next corner”. He also said that “When we think about big, bold things, we know that if we needed to acquire something, a piece of the puzzle, to make something big and bold a reality, we could write a check for it”.
In other words, if Apple decides it wants to do something, having billions of dollars of cash lying around liberates them. It allows them to make a phone call, write a check, and get it done. No need to go to a bank or involve any third-parties.
One more thing: The premise of Bilton’s article is entirely wrong. Apple’s thought process isn’t What should we buy with all of this money we have? You have to understand that, at Apple, everything revolves around the product. If Phil Schiller or Tim Cook decides they want upcoming product X to have feature Y, and they also decide that, rather than building feature Y in-house, they should buy company Z, because company Z has years of experience with feature Y that Apple doesn’t have — well, that is what the company’s cash hoard is for. And Steve Jobs’s entire point was that, the larger the cash hoard, the more of those moves they can make.