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Apple Investors Set for 2012 Cash Battle

Stocks in this article: AAPL MSFT CSCO

CUPERTINO, Calif. ( TheStreet) -- 2012 looks set to be an eventful year for Apple (AAPL), with new CEO Tim Cook expected to launch a host of new products, including the iPhone 5, iPad 3 and the eagerly-anticipated Apple TV.

Many investors, though, are more preocuppied with Apple's vast $81.6 billion cash haul, particularly with Cook hinting that that he could open the company's wallet by making a strategic acquisition or even bringing back the dividend.

Apple has cash and investments worth $81.6 billion.

"There are two schools of thought," explained Michael Yoshikami, CEO of YCMNET Advisors. "The allocation of capital matters, but what really matters is that Apple is a growth company - what will really drive that forward are innovative products and chipping away at competitors' market share."

Yoshikami cites the new versions of the iPad, iPhone, and Apple TV as catalysts, and also predicts that Apple may bring iPad technology to the MacBook Air with improved screen resolution and touch pads.

All the signs certainly point to Apple enjoying a strong start to 2012, boosted by robust holiday season sales.

Longer term, though, some investors are questioning whether gadgets alone are enough to maintain Apple's stellar share growth of recent years.

"For the first time I can remember, I think a new stance on capital allocation would be just as strong of a catalyst for the stock going forward, than anything on the product front," explained Chad Brand, president of Peridot Capital Management and author of the Peridot Capitalist blog. "Apple has gotten large enough that investors have priced in the fact that they will dominate their markets -- I don't think a company this size, even one as magical as Apple, can really surprise investors on the upside with sales of iPads or iPhones anymore."

Brand notes that everyone expects Apple gadgets to sell like "gangbusters" in 2012, and warns that even sexy new offerings such as Apple TV may not move the needle for the company's stock.

"Given that everything has essentially gone right for them in recent years, Wall Street is no longer affording the stock a premium valuation," he said. "How can they really surprise us on the product side in 2012? I doubt they can -- TVs would be a large, new market, but that new product is the worst kept secret today (and already factored in by investors as a result)."

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