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Apple and it’s HUGE cash reserves

Which is better? Android or iOS? In terms of handsets, Samsung or Apple? This argument has always been more Iphone than Samsung but most recently, Samsung has overtaken Apple in nearly every market it is in and Android controls over 80% of all handphone OSes. Third ranked would be Microsoft but I think by year end of 2015, it should already almost equal to iOS in terms of total OS market in the world. Do you remember the days when Nokia was the king of the world? Today, it is a pale shadow of its past and most probably would be a Microsoft company soon. What about Apple? Since it’s market share is no longer as big previously? Do you think Apple may face the same problem as Nokia? Well, if we look at Apple’s CASH RESERVES, the answer is No. Not even within the next few years even if Apple were to continue losing market share.

reservesWhy? Look at the cash reserves numbers of Apple versus many of the established economies of the world. Apple’s cash reserves are much bigger than United Kingdom’s total cash reserve. In fact in terms of profits, Apple continue to lead all other handphone manufacturers due to its ability to sell at a good premium. Even its second hand sets have better value than other brands!

Want to know how much is this cash compared to say, Penang Total property transactions in 2012? In 2012, the total transactions for ALL properties, whether secondary or primary comes to a total of RM7 billion or a total of over 26,000 units. Apple’s cash reserves can buy ALL the properties transacted in 2012 for Penang at least 70 times. 

Even compared to a company which everyone of us know, Microsoft, Apple still has a cash reserve of nearly double that of Microsoft. How could Apple accumulate such huge cash reserve? Look at all those who owns iPhone and you get your answer. 🙂

Facebook cash reserves are not stated here and it is not even within these. No information stated their cash reserves clearly but it should be around US$12 Billion or around 7.2 Billion Pounds. Thus, Apple is only around 13 times of Facebook when we compare cash reserves.

Interesting? Yes, I also think so. These companies have overtaken majority of all the brick and mortar firms which has operations which are far bigger and yet the profit margins are much smaller. As an example, the largest car company in the world by number of cars sold, Toyota has a cash reserve of only US$40 Billion or 24 Billion pounds. This is already the largest car company in the world, selling nearly 10 billion cars in 2013!

I think in 2014, Samsung will still lead Apple in terms of handphones sold. I think Android would continue to be dwarfing iOS. However, Apple is still way too strong even against these headwinds. As long as they are able to command a premium, they should still be ok, at least for the next few years.

written on 19 April 2014

Next suggested article:  Why technology is changing property buying behaviours

 

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3 Comments

  • ngfookchin on April 24, 2014

    To most people it is not so much the strength of the company but rather the quality of their products. Many giants of a company have fallen. iphone 5 is a let down with its screen size and it need to come up with a revolutionary product soon. Many are watching iphone 6 to be the killer.
    I have insurance agents telling me how strong is their company such as #1 in USA or the largest in Europe but what I care about is how their products can serve me well. No point having a lousy product from a so called top company.

    • chialih on April 25, 2014

      Fook Chin, agree totally. Quality of the product. I seriously do not believe Iphone 6 will be the killer. I think their time has passed. They can maintain their loyal following but to grow like last time, unlikely to happen. Watch out for all those new and innovative mobile phone companies inlcuidng Xiaomi, OPPO. These will make a huge impact due to their innovativeness and quality. Majority may be followers soon.

  • asali on April 25, 2014

    Agreed. Lenovo and Acatel also quite strong.

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