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Home / Apple / Apple isn't the most cash-rich company in the world anymore, but it doesn't matter

Apple isn't the most cash-rich company in the world anymore, but it doesn't matter



  Google founder Larry Page is now CEO of Alphabet.

Google founder Larry Page is now CEO of Alphabet.

You've probably heard it before: Apple has more money in the bank than any other company on earth, thanks to huge profit margins on its products and a nearly two-decade run that is a leader in the consumer technology industry. It has been called the richest, most successful company in world history. But part of the story is no longer true: Apple no longer has the largest financial reserves of any company on earth.

According to a report in the Financial Times, the label of another tech giant can now be used: Alphabet, Google's parent company. As of the second financial quarter, Alphabet now has $ 1

17 billion in reserve, compared to $ 102 billion for Apple. However, Apple had $ 163 billion in 2017, so this is as much a story of Apple reducing reserves as it is one of Google growing its own.

Since then, Apple has been working to reduce its liquidity in response to investor criticism that the company was raising money. Although there is some room for nuance, investors generally want to prevent companies from hoarding cash. Instead, they prefer that the money is either returned to investors in some way or invested in something that can yield returns later.

Apple has spent $ 122 billion on share repurchases since early 2018. It also took advantage of a one-time tax incentive to bring foreign cash back to the United States at a reduced tax rate just over a year ago. [19659004] All of this is to say that while platform loyal tech enthusiasts may see this as evidence that Google is winning and Apple is losing, the reality is more nuanced. Finance, in many cases, actually looks to hold too large cash reserves as a negative.

Apple continues to face the challenge of reinventing itself in a world that has been more or less completely saturated with smartphones. The company's latest revenue report showed another quarter-on-year decline in iPhone sales. But losses in that quarter were offset by growth in services, wearables and other areas.

Meanwhile, Google had a record quarter, with reported quarterly earnings of $ 9.9 billion and 19% higher revenue than the same quarter last year. While Apple's risk to investors comes from a stagnant smartphone market, Google comes from the threat of increased regulation and other government action. And of course, the alphabet umbrella covers more than just Google.

However, both companies' finances are relatively healthy for the time being. And news about which tech company has the most money in the bank doesn't have much relevance to most consumers; It's an investor concern first and foremost. But how tech giants will navigate changing market demand for certain products, consumer disruption over privacy issues, the impact of US / China trade disputes on supply lines and threats of regulation or even monopoly breaches by politicians and political candidates. So these are the stories to look at most.


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