With the smartphone market slowing, Apple (AAPL) managers must look to other areas in which to invest their owners’ capital in order to generate robust profit growth in the future.
Today, we published a six-page report focused on the resources Apple has to invest, cultural factors that play a part in its investment program, and likely areas in which it may invest in the future.
Our Key Take-Aways are as follows:
- While near-term results will be dominated by iPhone sales, Apple’s medium-term growth is dependent on the firm’s successful investment of its cash hoard.
- Apple had $234 billion of cash and marketable securities at the end of March 2016. Much of this wealth is held overseas and cannot be repatriated without paying a hefty tax bill.
- The strength of Apple’s deeply-engrained design culture is a weakness in investing terms. The characteristics that made Apple a terrific success as an innovator have already been shown to make it a poor investor.
- Tim Cook has hinted that Apple will likely announce a big acquisition soon. There are a few areas in which the firm might invest. The most likely area in which it may invest is likely the worst choice.
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