If you’r an AAPL stockholder and you love Apple’s dividends and stock buyback plans, stop reading. You’re not likely to appreciate what I have to say. Apple under CEO Tim Cook is a well run company with a billion happy customers and more money in the bank than most developed nations. What’s wrong with that?
Apple isn’t a nation. But the so-called Apple Tax has made the company outrageously rich and those riches are being used in a way that benefits stockholders; certainly not customers, not Apple’s famous supply chain, and probably not even planet earth.
Wait. Doesn’t Apple spend more than $10-billion a year on R&D? Doesn’t that help customers? Yet. But that’s chump change considering how much Apple makes in profits. Guess who agrees with me?
Ralph Nader. Yes, that Nader. Now, I’ve never owned a GM Corvair, but my father did; a late model Monza if my memory is correct. Ralph Nader attacked General Motors because experts found early models to be unsafe. The Corvair died.
I don’t want Nader to kill Apple. Or, the iPhone. I do want Apple to be more responsible with the profits it makes and tossing away a few hundred billion on undeserving shareholders and buybacks do not benefit customers or the earth.
Nader back in May:
You can invest in research and development on ways you can diminish the effects of your company’s toxic supply chain that stretches from the dangerous mines in Africa to the hazardous solid waste disposal when users discard them. Many serious illnesses, fatalities, and injuries associated with manufacturing your products can be prevented.
Those are issues Apple works on, of course, and probably does a better job than Samsung and other competitors, but Apple’s profits are enormous so it’s a much easier sacrifice.
Of course, you could always cut your prices for consumers. In the 1960s and ‘70s, such profit margins as Apple’s would have been an antitrust signal of possible monopolistic practices or market collusion.
I don’t agree with Nader on this. Apple’s marketshare pales in significance to the Android monopoly, but Google doesn’t make much money on Android, so Nader doesn’t have much to complain about regarding the search engine giant.
Apple is just an easier target.
Nader on NPR regarding Apple’s continued wealth increases.
The kind of income that the Chinese workers are making, under tremendous pressure by their contractor, is really not a living wage, even in China
That’s hard to argue against, but Apple remains one of the better manufacturers when it comes to improving lives of those living in the supply chain and working for manufacturing partners.
So, what’s my beef?
While they know how to make enormous money with their overpriced iPhones, they don’t know how to productively use it
Sure, lower prices for iPhones would be nice, but Apple could be accused of some sort of monopolistic practice if they dropped prices and two hundred Android competitors went out of business. It’s supply and demand and what the market bears.
The problem I see with Apple riches is how much of the company’s profits go to the rich, and not back into the company to create the next great thing. Shareholders reap a growing stock price and increased dividends. They also reap a growing stock price when Apple buys back stocks to reduce the number of shares on the market, which, supposedly, helps drive up the price for remaining shares.
That does not always work, but for Apple it has.
The beef again?
Apple under Steve Jobs revolutionized a number of industry segments; the original Mac, the original iMac, Apple Stores, the iPod and iTunes, the iTunes Music Store, iPhone, the App Store, iPad.
Other than spend a few hundred billion dollars on share buybacks and dividends, Tim Cook’s product line since Jobs died in 2011 has been… insert drum roll here… accessories for iPhone.
Beats headphones, Apple Pay, Apple Music, Watch, AirPods, and what else? Where’s the next great thing?