APPLE'S $18 BILLION CASH DILEMMA IS NOW SOLVED

Most companies dream of $1 million in cash reserves, however Apple's reality is $18 Billion in cash reserves despite no clear spending plan. Many opinions differ as to the path Apple should take with the cash, however for long term growth and superiority, Apple's path may be clear.
Apple's primary goals concerning its nearly limitless cash reserves revolve around ensuring that the money keeps growing and doing something positive with the money. It is important to note, that though cash is a benefit, excess cash sitting on your balance sheet can be a signal of danger ahead. Investors looking at exorbitant amounts of cash on the books begin to question why the money is not put to good use and possibly conclude that management has run out of investment opportunities or simply does not know what to do with the cash.
From acquiring expensive companies to developing a leading venture capital fund, the opportunities for Apple are limitless. Apple's unique position make either choice an exceptional move and here is why:

ACQUIRING COSTLY COMPANIES

Many companies grow by acquisition and despite the fact that within the technology sector these acquisitions fail many times, Apple is in a unique position and should continue to differentiate its choices. With YouTube off the market to Google and really not a good fit for an acquisition of Yahoo, there really aren't too many large scale opportunities for Apple to purchase. Additionally, when Apple decides to purchase companies, they focus on smaller companies that can be closely integrated into the current overall path of Apple. For example, Apple's 2002 acquisition of the German company, Emagic eventually led to the Mac software program Garage Band. This pattern was followed closely in several other projects and has yielded tremendous success for the company. Apple's closely guarded research and development makes it a primary purchaser for the many companies moving software and products forward that need an incredible cash and marketing infusion for success.

APPLE VC: APPLE'S VENTURE CAPITAL FUND

An Apple backed venture capital fund could be the best use of Apple's immense cash reserves. The iPod has been the largest selling electronics device in over ten years, the iTunes Store and software continues to generate revenue as though Apple can print its own money. The iPhone may be even more successful than the iPod and will continue to make iTunes more and more popular. On the horizon for Apple, is Apple TV which despite its delays is claimed to revolutionize our television viewing experience and further inundate Apple's cash supply. Nearly everything Apple touches turns to gold, therefore perhaps Apple should do some more touching. There will be another iPod and iPhone and Apple's fund can find it.

There are and will continue to be hundreds of companies developing third party software for Mac, however none will have the marketing power and additional research and development that the Apple fund could provide. Let's not forget about gaming on the Mac and the benefits that could be achieved by an investment into this realm. Mac, despite it's exceptional graphics and user interface still trails far behind Windows in game releases. Also, the accessory market that continues to explode around the iPod and iPhone will only make Apple's products better and possibly spin off derivations of these products which ultimately outsell the originals. The fact is that many software developers, simply do not have the finances to create both Mac and Windows versions of software, games and products, thus the smaller quantity of Mac owners are left with the task of waiting until a Mac version can be created. An Apple fund could finally signal the time of simultaneous releases of products on Mac and Windows.

MANY GIANT CORPORATIONS SECURE THEIR LEGACY WITH A FUND

Qualcomm, IBM, Intel and Motorola have their investment funds in which each seeks to extend their respective vision of the future in technology. Sure, some investments will fail in the short term, however with Apple's pristine history the company is bound to gain in the long term. An Apple investment fund would further develop technology benefiting many lives around the world. Clearly, Apple's vision combined with its technical and financial resources would bolster many smaller companies who simply need funding and marketing infusion for success. Apple too like most companies had difficult times specifically in the mid-1990s when the cash reserves were low and though those days are long behind Apple, the company is now in a position to continue to make a huge impact on the future of technology. Lets not forget that this decision would have a positive long term effect on its shareholders as well. Apple will go down this path and create a fund which will invest in companies that share its vision and have an exceptionally good product and in the meantime will continue to make investor friendly decisions like paying dividends and buying back stock. Apple's clear future, however is in the Apple Investment Fund.