Apple Will Start A $10 Billion Share Buyback From Fiscal 2013

Apple has been piling up a lot of cash with the immense success of its smartphones and tablets. For some time, a lot of us have been wondering exactly what will Apple do with all that cash. Now, Apple’s CEO Tim Cook has revealed plans of using a chunk of that on stock buyback which will start in fiscal year 2013. This initiative would be accompanied with a per-share dividend of $2.65 which will start a little earlier than the buyback, in Q4 this year.

So how much is Apple planning to use up in the stock buyback ‘project’ which is expected to last for some years. Apple expects to use up $45 billion on the aforementioned programs, which is a whooping huge amount. But then, given Apple’s pile of cash, this isn’t going to hurt the company one bit.

Tim Cook, Apple’s CEO, is well aware of the surplus that Apple has and the fact that it isn’t tied to an investment yet. In his words, ‘We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You’ll see more of all of these in the future. Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program.’

The new move may caused a lot of investors to grow concerned but Cook didn’t forget to placate all such concerns with a cool air of assuredness, ‘We have thought very carefully and deeply about our cash balance… these decisions will not close any doors for us.’

Finally, when asked about what Apple may be planning to launch in the future, Cook gave a rather vague, but meaningful answer ‘our pipeline if full of stuff.’

Image courtesy kynbit.

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