Apple is doing a big return of value to shareholders, which I think is a strategic error (depending on your assumptions about their strategy).
Typically high tech companies need large cash reserves because their assets are all soft — smart people can’t be resold, so the only way for high tech employers to store value is to have big piles of cash. This also lets those companies move quickly to acquire new, smart, small companies before they become competition through growth or being acquired by someone else.
Typically, also, mature companies in mature industries can manufacture growth by returning value to shareholders with dividends and stock repurchases — they know when they need to buy a new widget press, roughly, and they know that having cash on-hand is no good to them.
All corporate decisions have information content. Apple’s move here is one, I think, of Tim Cook signalling that he’s a steady hand. That’s why the press release immediately goes into justifications: “we’re still confident”, “we’ve made some great acquisitions”, etc. But halving the war chest is a big strategic move. Announcing a stock rebuy at $600 per share, for example, signals that Cook considers the stock undervalued — I can’t comment as to the truth of that (it’s possible), but that’s power balling pretty hard: were they really unable to find a more innovative company to buy than themselves? PrimeSense, for example?
I’m weirded out because Apple plans this stuff, is conscious of it: Tim Cook oversees a big earnings and share price bump through the Jobs Transition — and the next MacBook gets an SD port. These bumps are engineered and the shareholder play is a definite signal, I just think it’s wrong-headed — a good play from the wrong book. Could that $45 billion really not have been better spent on an innovative new product?
Returning that much to shareholders signals that Tim is safe and industrial-minded. It signals that Apple is moving into a mature value-extraction phase for its markets. It’s worrying that this is the guy in charge of manifesting the future now, and the title may have to be stripped.