Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Risk

1/11/2010
06:05 PM
Bob Evans
Bob Evans
Commentary
50%
50%

Global CIO: iPhone Users Stupid And Steve Jobs Greedy, Says WSJ

Steve Jobs is not serving shareholders well, but Apple zealots don't get it, says a Journal columnist.

"Apple's cash hoard is rising," writes Arends. "Operating cash flow has recently been about $10 billion or so per year. The word now: The company had a very strong fourth quarter -- analysts are predicting more than 9 million iPhones sold, and Ben Reitzes, analyst at Barclays Capital, says his company's research suggest terrific sales in Europe, especially in the U.K. and France.

"The next quarterly update will surely show the net cash has risen still further. Even by conservative estimates the surplus is probably nearing $30 per share. This is not all money Apple needs to run its business. Most of it is sitting in low-yielding investments like short-term corporate bonds. It's earning next to nothing. "

And that, Arends says, is "dragging down" returns for Apple investors—but don't get the impression that his concern is that they're all widows and orphans hoping that Apple dividends will keep roofs over their heads and gruel on the table. Quite the contrary—Arends expresses naked contempt for the many Apple shareholders who are also Apple zealots, and therefore unlikely—or in his estimation, unable—to think clearly about anything having to do with Apple and Steve Jobs:

"Last summer, writes Arends, "I observed that Apple stockholders were unlikely to get the same kind of 55% annual returns over the next five years that they had gotten over the previous five.

"Some Apple partisans, apparently unable to read or do basic math without an "app" to help them, took this as a prediction that Apple stock was going to fall. This illustrates Arends' First Law of Technology: As phones get smarter, people seem to be getting more stupid—and the stupidest people own the smartest phones."

Now, I'm all for wide-open debate but that seems a touch defensive, wouldn't you say? Lord knows, the Apple faithful can be a vociferous bunch and to them, the only thing worse than not having more than 5,000 songs on your iPhone is saying something critical about Steve Jobs or the company he has run so brilliantly for the past decade. Doesn't matter how accurate, insightful, or potentially valuable that observation might be: if it's not a hosanna, they're gonna bring the heat.

Think about that in terms of brand-building and your own company: how vigorously would your best customers defend you? Or do you give them reason to think that you're just another in a long line of suppliers, with the only difference being that your turn has come to be at the front of the line for a fleeting moment? Behind the silliness of some of the stuff above lies a very powerful message: Jobs and Apple have created products and services that transcend categories, transcend seller/buyer roles, and transcend—as Arends points out—the norms of rational self-interest shareholders almost always express.

Nevertheless, Arends has a strong point to make, and he hammers it home again:

"Why is Apple hoarding its cash? A company spokesman explains: "We have maintained our cash and strong balance sheet to preserve the flexibility to make strategic investments and/or acquisitions," writes Arends. "Steve Jobs really doesn't need an acquisitions warchest of around $30 billion, and it is alarming to think he wants one. He should start handing back this money to stockholders through dividends. Regular, quarterly dividends are better than a one-off special payout because they impose financial discipline on the management. But the core principle is the same in either case. The money belongs to stockholders: Give."

What do you think? Let us know at the address below.

RECOMMENDED READING:

Global CIO: The Top 10 CIO Issues For 2010

Global CIO: Steve Jobs Is Bugs Bunny But Microsoft Is Elmer Fudd

Global CIO: Apple's Next Billion-Dollar Idea: The Enterprise Mobility iCloud

Global CIO: Apple's Investment Star Wanes As iPhone Its Only Growth Area

Global CIO: Oracle CEO Larry Ellison On The Future Of IT

Global CIO: Oracle's Incredible Profit Machine: 22% Maintenance Fees

IBM CEO Sam Palmisano Talks With Global CIO

Global CIO: Hewlett-Packard's Hurd Says Bad IT Means A Bad CEO

Global CIO: Six Lessons CIOs Must Learn From Coke's Dazzling Innovation

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].

Previous
2 of 2
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Mobile Banking Malware Up 50% in First Half of 2019
Kelly Sheridan, Staff Editor, Dark Reading,  1/17/2020
Exploits Released for As-Yet Unpatched Critical Citrix Flaw
Jai Vijayan, Contributing Writer,  1/13/2020
Microsoft to Officially End Support for Windows 7, Server 2008
Kelly Sheridan, Staff Editor, Dark Reading,  1/13/2020
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Write a Caption, Win a Starbucks Card! Click Here
Latest Comment: This comment is waiting for review by our moderators.
Current Issue
The Year in Security: 2019
This Tech Digest provides a wrap up and overview of the year's top cybersecurity news stories. It was a year of new twists on old threats, with fears of another WannaCry-type worm and of a possible botnet army of Wi-Fi routers. But 2019 also underscored the risk of firmware and trusted security tools harboring dangerous holes that cybercriminals and nation-state hackers could readily abuse. Read more.
Flash Poll
[Just Released] How Enterprises are Attacking the Cybersecurity Problem
[Just Released] How Enterprises are Attacking the Cybersecurity Problem
Organizations have invested in a sweeping array of security technologies to address challenges associated with the growing number of cybersecurity attacks. However, the complexity involved in managing these technologies is emerging as a major problem. Read this report to find out what your peers biggest security challenges are and the technologies they are using to address them.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2020-7227
PUBLISHED: 2020-01-18
Westermo MRD-315 1.7.3 and 1.7.4 devices have an information disclosure vulnerability that allows an authenticated remote attacker to retrieve the source code of different functions of the web application via requests that lack certain mandatory parameters. This affects ifaces-diag.asp, system.asp, ...
CVE-2019-15625
PUBLISHED: 2020-01-18
A memory usage vulnerability exists in Trend Micro Password Manager 3.8 that could allow an attacker with access and permissions to the victim's memory processes to extract sensitive information.
CVE-2019-19696
PUBLISHED: 2020-01-18
A RootCA vulnerability found in Trend Micro Password Manager for Windows and macOS exists where the localhost.key of RootCA.crt might be improperly accessed by an unauthorized party and could be used to create malicious self-signed SSL certificates, allowing an attacker to misdirect a user to phishi...
CVE-2019-19697
PUBLISHED: 2020-01-18
An arbitrary code execution vulnerability exists in the Trend Micro Security 2019 (v15) consumer family of products which could allow an attacker to gain elevated privileges and tamper with protected services by disabling or otherwise preventing them to start. An attacker must already have administr...
CVE-2019-20357
PUBLISHED: 2020-01-18
A Persistent Arbitrary Code Execution vulnerability exists in the Trend Micro Security 2020 (v160 and 2019 (v15) consumer familiy of products which could potentially allow an attacker the ability to create a malicious program to escalate privileges and attain persistence on a vulnerable system.