n2_edmond
New Member
Ensquared the #1 authority on iPad insurance and iPhone insurance throws some light on Apple as a company, which is generating revenues from the sale of its cutting edge devices and applications. It is impossible to be in the wireless insurance business and at the same time not look at the fortunes of the companies whose devices we cover. Phone insurance and tablet insurance, although only one part of this huge industry is right in the midst of a revolutionary change and the leader in all this is Apple.
Here are some facts that should really get you thinking: Although Apple today is as American as moms apple pie, in the not too distant future Apple may well be headquartered in Hong Kong or similar. In fact it is most likely the way things are going. Look at this way: Apple is now not only a seller of electronic devices, and not only a huge force in distribution of music, movies and videos, not only the leader of applications in every walk of life, not only a leading and cutting edge retailer versus any leading retailer $ for $ everywhere in the world, it is today a bank. That is right - a bank, and probably one of the wealthiest and healthiest around in net cash assets.
Apple is building up cash reserves at a stupendous rate recently showing $81 billion in cash or near cash assets. But more astounding to everyones eyes is where this cash horde is going and the answer is up, up and up. The cash projections on a reliable formula estimate that by 2014 (just two years away) the $80 billion will be $150 billion. This is in anyones language an astronomical figure.
The interesting thing about all this: The big part of the cash horde is abroad and not in the USA and is likely to stay that way. Apple today, that is Apple Bank, owns reserves in Euro, yen, and the real and in fact every major currency you can think of. As much as 67% of the cash in Apple Bank is foreign based and it cannot come back. Why? Because it has already been taxed in the countries it was earned and there is no possibility of Apple bringing it into the USA to be taxed twice.
This means that Apple have currently only $27 billion to pay out shareholders a dividend without tax implications already accounted for. That is not going to happen because Apple Bank is going to give it to Apple the electronics machine to buy, patent, defend patents and do R&D. $27 billion given the USA market size is not really that much and leaves nothing over for dividends. The excess all lies in the offshore cash. Further, Apples sales are blowing through the roof overseas and it is estimated that when they do hit $150 billion in cash 75% of this will not be in the USA. The 66% ratio is growing in favor of their foreign business.
So the facts are these. They cant bring the cash back to the USA without being double taxed, so they are going to go gangbusters in developing their overseas acquisitions and overseas revenues. That means more iPhones, iPads, Macs etc being sold throughout the world not in the US. This means that Apple Bank will likely one day be the biggest international conglomerate alive and be stationed in Hong Kong or Singapore. In that way they will live where their money is. Makes sense.
