The link is an interesting comparison of Apple and Microsoft, but I don't understand why cash on hand is very meaningful. Cash isn't terribly profitable, otherwise I as a market player would just keep cash around directly instead of buying apple or microsoft. Too much cash <i>can</i> mean that the company is having a hard time finding valuable things to invest that cash in.<p>If microsoft wanted to, it could easily raise more cash by issuing more shares (or stopping the dividend as others have pointed out). The cash comparison is thus not meaningful.<p>That said, the comparison of real revenues and profits is tremendously interesting - Apple is within spitting distance of Microsoft on revenue and has a similar profit margin. The profit margin is what interests me. Microsoft has always enjoyed a bigger profit margin as a software company than as a hardware company. Apple is more of a hybrid, but has still managed to come away with a high profit margin.
This actually lines up reasonably well with market cap -- Apple is at $85B and Microsoft at $195B. Apple has seen resurgence in growth (75% year over year is pretty kick ass), but they are much more heavily tied to consumers than microsoft so it seems logical that the current economic troubles will hit them harder.<p>Personally, the only thing I would like more than Apple surpassing Microsoft as the giant computing behemoth is Ubuntu making good on its goal of surpassing Apple in usability/UI.
MS had decent profits for a quarter that saw the slow selling Vista as their 'big thing' (while Apple has the 3G iPhone to sell). Windows 7 will improve on Vista's issues, I don't see MS losing it's place (on top) anytime soon.<p>Also, why are we praising 'cash on hand', cash is only good when you use it.
If you were SJ, what would you buy with it?<p>Buying back shares is a waste at this time and SJ doesn't like buybacks. Some people see Apple buying Adobe. ADBE's market cap is around $12B but to me a big negative is the amount of overlap between their software suites... lots of value will be wasted but on the other hand, Apple would have a virtual monopoly on digital content production. If I were SJ, I'd go after Yahoo. It's now around $17B and would offer Apple more room to grow and would also give Google some things to think about as they're now going after Apple's mobile slice.
Dividends are useful to differentiate cash-rich and otherwise undistinguished stock offerings.<p>Great mounds of cash allow for some stability and for judicious bargain shopping and for product upgrades during downturns; for a longer horizon.