NEW YORK ( TheStreet) -- As if the tremendous and continuing success of products like the iPhone and iPad isn't enough to entice investors, Apple ( AAPL) also has more than $81 billion in cash on its books with two-thirds of that amount held outside the United States. What the company should do with that money has been the subject of debate for years with cries surfacing occasionally for Apple to issue a dividend, do a buyback, or perhaps acquire complimentary companies to help maintain its torrid growth. After all, Apple doesn't need that kind of cash hoard to fund day-to-day operations, secure parts, or even invest in research and development at this point.
New CEO Tim Cook has said that he is "not religious" about holding cash, as his predecessor Steve Jobs seemed to be. When Jobs returned to the company he co-founded, Apple was notoriously stingy with its cash. It's only done a handful of mergers over the $200 million mark (P.A. Semi, Quattro Wireless, C3 Technologies, and supposedly Siri). That means the substantial free cash flow the Cupertino, Calif.-based company generates each quarter sits in the bank, doing nothing for shareholders. Here's a list of five ways Apple could put some money to work outside conventional options like dividends and buybacks, and still have plenty left over to churn out the iPads, iPhones, and MacBooks that consumers line up in droves for.
application programming interface , basically its source code, with its vast reach and resources. Right now, Siri uses Wolfram Alpha to display answers to questions, and integrating the two companies could potentially be beneficial for Apple down the line.
|Apple has been stingy with its cash in the past, but new CEO Tim Cook said he is "not religious" about holding it.|
Wolfram AlphaSafari, Apple's proprietary browser had 4.2% of the market share in October 2011 according to W3 Schools, compared to 38.7% for Mozilla Firefox and 21.7% for Internet Explorer. In the latest iPhone and iOS releases, Apple has heavily featured Wolfram Alpha, a search engine which allows for a wide variety of different searches, as opposed to the standard image and text searches that Google ( GOOG), Yahoo ( YHOO), and Microsoft's Bing ( MSFT) generate. If Apple were to buy Wolfram Alpha, designed by British scientist Stephen Wolfram, and successfully integrate the product into Safari, making it the default search to differentiate Safari from other browsers, this could potentially help Apple capture browser market share. Apple could also look to monetize Wolfram Alpha's API
More PatentsApple has already purchased a significant number of patents along with a consortium of others from the now bankrupt Nortel Networks, and technology companies are increasingly viewing patents as a significant asset. InterDigital ( IDCC) is a name that has been the subject of rumors in the past. Google's purchase of Motorola Mobility has fueled speculation of a "patent war" between some of the largest technology companies, and brought to light the patents that Research in Motion ( RIMM) has at a time when the Blackberry maker is struggling to stay relevant in shareholders' minds.
MySpaceApple's iTunes is the leader in digital music delivery, generating revenue of $1.4 billion in the third quarter. MySpace was once a pioneer of the social networking space before Facebook blew it away. But MySpace is still a place where bands put some of their music, and a group including Justin Timberlake purchased the company for $35 million. That's pocket change for Apple and the deal would bring more social networking into iTunes than the company already has with Ping.