Thursday, September 10, 2015

An apple a day ... will keep the profits away?

Mirror, mirror, mirror on the wall
Which is the evilest company of all?
It depends.

It depends on how one defines "evil."  You think it is easy?  Think again.

Seriously, you think you have defined "evil" in a way that everybody can agree with?  Let me give you a simpler task.  We eat sandwiches, right?  Go ahead, define a "sandwich."

If you think there is something tricky about me asking you to define a sandwich, yes, you are correct.  Click here to find out more about that problem.  If defining a sandwich will be that difficult, now do you agree with me that defining "evil" is not going to be easy?

I find Apple to be a creepy and evil corporation.

Yes, for a few years I have had an iPhone.  But, that does not change my opinion that there is something creepy and evil about Apple. Its profits are the main reason why I think that way about Apple.

How profitable is Apple?  You want to know how much cash the company has sitting around?  You ready for this?  Are you seated?  Are you holding on to something so that you won't easily keel over?  Ok, here it is:
 As of last month, Apple had $203 billion in cash reserves.
Yes, it is two hundred and three billion dollars.  Of cash reserves.  BTW, a billion is a thousand million, right?  Which means the cash reserves are 203,000 million dollars.  Here, let me put it this way; it is $203,000,000,000.  And you thought zero has no value! ;)

Of course, this is not the first time (like here) that I am beating up on the company that liberals love; the same liberals who otherwise hate corporations!

It gets even more interesting:
keep in mind that $181 billion of that total (roughly 89%) is held outside the U.S.
Yep, Apple has enough lawyers and accountants who know every hole in the taxation Swiss cheese to keep the money far, far away from taxpayers in the country in which the corporation is headquartered.  If there aren't enough holes, then the corporation's hired hands create them, of course.

You still think Apple is a saintly entity?  Well then, how about this comment:
But one thing Apple absolutely shouldn't do is bring that cash back to the United States -- at least not yet. Because in doing so, Apple would incur a massive repatriation tax bill at a rate of 35%, or more than $63 billion.
Thankfully for Apple shareholders, management has promised that this isn't an option as long as America's repatriation tax remains at such a high rate.
I know, some of you readers are so pro-corporations and are finance wizards that you will want to interject here that America's tax policies are why Apple plays these offshore shell games.  Tell you what. it all depends on your definitions, like what Bill Clinton famously said!  Using my definition, Apple is one heck of an evil corporation.


Source

4 comments:

Bob Richardson said...

I share your view about Apple, from long ago. More recently I bought an iPod (after realizing there was no competition) so I could listen to my CD's at my cabin, after ripping them. I tried to register the iPod with Apple but could not do so without opening an iTunes account and giving a credit card number. I refused, and am proud to say all the music on my iPod has been ripped from my own legal CD's. Apple made it hell to do this from Windows Media Player, but I figured it out.

Sriram Khé said...

Good to see you here after a very, very long time, Bob. I suppose I will see you in the real world next month ...
Yes, Apple has built itself a technological empire with tentacles that reach and grab our credit cards in more ways than one ;)
I know you are like me--we use only PC laptops because they are considerably less expensive than the Apple versions. Actually, for my personal use it is a Chromebook--remarkably inexpensive.

Ramesh said...

Yeah its all about definitions. I have to say I completely disagree with your definition (and Bob's) of evil.

Your problem is about Apple holding cash outside of the US. Of course it will. If you have the stupid tax code that you have (and no other country on earth has this ridiculous concept of taxing global income), then its hardly surprising that any sensible corporation would keep its profit that it earned outside the US, outside. Remember , the profit is earned outside the US and is taxed in the country where it is earned. Please give me one good reason why I should pay a higher price for a product so that I can contribute to the taxes of the US government ??

On Bob's argument, I share his sentiments regarding distaste of Apple's commercial practices. Therefore I do not buy Apple's products too. In fact I hate their pricing policies and the fact that they care two hoots about India and launch their products here one year after it is launched in the US. But that doesn't make Apple evil. If I don't like their business, I can take my wallet elsewhere - that's all there is to it.

Sriram Khé said...

See ... it all depends on how we define anything ;)

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