There are very, very, skilled investors, hedge-fund owners, traders, and speculators that are intimately familiar with every nook, and cranny of Apple's Cash Flow, Income and Balance Sheets.<p>Now - You can trade against these people based on your intimate industry knowledge of trends regarding IOS, Apple's new markets, Apple's unique position in terms of mind-share, Microsoft's Weakness, or Google's potential problems with market fragmentation on the Droid platform - these are all skills/knowledge that may give you a unique advantage.<p>But trust me when I say people (much) smarter than you with regards to all matters financial have declined to bid-up Apple, despite it apparently having a tsunami of cash about to come its way.<p>Once again - I'm not saying don't invest in Apple, I'm saying don't invest in Apple because you think you've identified some financial aspect that has somehow escaped the eyeballs of the ten-thousand odd people who make a living crunching these numbers every day and can afford to speculate and otherwise arbitrage these (seeming) value opportunities across hundreds, if not thousands of company's that are in this (or simliar) positions.
I doubt Apple will want cash reserves that high. Investors criticize companies that have too much cash and just sit on it, ie microsoft and now apple.<p>The reason is the company should be using some of that cash to invest in growth opportunities or their future, either acquisitions, R&D or new projects. If they don't do anything with the cash and just sits on it, this action is a signaling mechanism that essentially says that Apple doesn't see any growth opportunity worth investing in. Traders will sell the stock because there is no recognizble opportunity to grow revenue and they are not investing in their future so they can be vulnerable to competition in the future.
Of course, this 0.00% assumed growth rate omits the obvious, which is that a company as successful as Apple has a lot of competition brewing in each of its markets, and a negative growth rate is certainly possible.<p>Technology is an industry where you run to stay still. Apple's cash flows are far less predictable than, say, Procter and Gamble's. What's Apple has done in the last ten years could continue for another ten, or reverse entirely.
It's nearing a year old but here are some points to consider if you're an apple long: <a href="http://aaplbear.com/" rel="nofollow">http://aaplbear.com/</a>
I can see at least 4 reasons why Apple isn't paying dividends.<p>1. Tax: the cost of repatriating foreign profits to the US is high. The USA has a higher corporate tax rate than most countries, and with switcheroos like the "Dutch Sandwich" and the "Double Irish", bringing that money home makes no sense.<p>2. Tax again: capital gains vs income tax, to be precise. Many shareholders would prefer the stock price to go up over receiving dividends. A growing cash balance puts upward pressure on the stock price.<p>3. Buy-up fuel. Like large most tech firms, Apple has a split personality. Part creator, part hedge fund.<p>4. For dick-waving rights. Never underestimate this motivation. Here in Australia the dick-waving contest between the executives of the two largest mining companies has led to outbreaks of profoundly expensive bugger-ups.