Silicon Valley: Apple is having a massive year. Even with the world grappling for computer components and major changes in executive management, the company recently smashed analyst forecasts. What’s behind this cash tsunami? An incredible surge of interest for the new iPhone 17 and the unveiling of a surprisingly cheap $500 (or around ₹41,500) MacBook laptop the MacBook Neo.
Apple posted some staggering figures from its last quarter. Apple earned a whopping $111.18 billion. So much revenue was enough to cause the company’s shares to surge almost 4% in aftermarket trading.
Company CEO Tim Cook said that the iPhone 17 is in “off the charts” demand. But the real game changer in the market is the MacBook Neo.
Available for a student-friendly price of $500, this laptop is Apple’s attempt to take on the low-end laptop market dominated by Google’s Chromebooks. As it turns out, consumers are more than willing to buy an Apple laptop if it doesn’t mean blowing out their life’s savings. The Mac generated sales of $8.4 billion, well above the forecasts.
It’s not all plain sailing, however.
Making millions of high-tech devices means millions of tiny computer chips. The whole world of technology is competing for the same highly specialised chips used in Artificial Intelligence. Apple is stuck in this worldwide jam. Cook said there is “less flexibility” in the supply chain these days, which means they just can’t get enough parts to make all the iPhones that people want to own.
And the parts that go into the computers to provide memory are in short supply and are getting costlier. This will begin to eat into Apple’s revenues as we start the summer.
So, what does a company with a lot of money and some supply chain problems do? It returns the favour to shareholders.
Apple just announced a staggering $100 billion (around ₹8.3 lakh crore) buyback. It’s a textbook move to placate the market, and it comes at a time when the company is gearing up for some musical chairs.
Apple is in the midst of a transition, including a new CEO. At the same time, Apple’s Chief Financial Officer, Kevan Parekh, is changing the way the giant piggy bank works. Rather than burn through their cash until it matches their debt, Apple is going to hang onto more cash.
Having more cash on hand will make it easier to deal with any surprises. And since they just demonstrated that they can make more than US$100 billion even with a supply-chain disaster, that looks like a good plan too.
