Apple reveals how it's planning to use the surplus cash

Apple decided to use the $97.6bn cash on its balance-sheet to pay dividend, for the first time since 1995, and buy back some of its shares.

The company confirmed it will pay a quarterly dividend of $2.65 per share starting from July which is a dividend yield of 1.7 per cent on the current share price. Apple will buy back up to $10bn of its own shares starting in the company's next financial year.

There have been a many speculations as to how the money will be used. The cash had been held for a long time mainly because of Apple’s near-bankruptcy in the mid-1990s. Also, Steve Jobs was not a supporter of dividends. Another reason for Mr Cook’s cautious approach to paying dividends may be the Microsoft’s experience. The firm suffered a slower growth as soon as it began to return cash to shareholders in 2003. Some therefore view the decision to start paying dividends as a signal that company’s glory days are over. Parting with money is therefore a big step for the company to take.

On the other hand the dividend rewards shareholders and opens ownership of Apple shares to a wider range of funds, as most ‘value-oriented’ funds are not allowed to buy stocks which don't pay dividends.

Apple’s share prices continue to rise thanks to this decision. With the new iPad sales boosting company’s wealth is growing at enormous rate. Three million iPads were sold in the first three days at $400 gross profit per unit making up for the $10 billion return to shareholders.

As Tim Cook ensured in his statement:  ‘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.’

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The new Apple iPad has been unveiled!

Apple has unveiled an updated iPad tablet with a high-definition screen and faster communications. These were the two most important expectations set for the device. At an event in San Francisco on Wednesday Tim Cook unveiled the third updated version of the tablet which he referred to as the ‘new iPad’ instead of giving it a specific name. It will become available on March 16 in the US and nine other countries: UK, Canada, Germany, France, Switzerland, Hong Kong, Singapore, Australia and Japan.The product looks and feels like iPad 2 although slightly heavier and thicker. Rupert Goodwins stated on his technology website: ‘Unless you are a big Apple fan it will look like any other iPad.’ Its starting price is also the same: $399 for the Wi-Fi only models, or $659 for models with Wi-Fi and 4G connectivity. The price of the iPad 2 is dropping to a starting price of $329. Apple tries to appeal to its users by the variety of technological improvements instead of the low price in its attempt to stay ahead of competitors.

The main features of the new iPad include HD retina display- an unusually sharp display, support for the 4G connectivity known as LTE (10 times faster than 3G found in the iPad 2) and a faster microprocessor chip with improved graphics performance that helps run realistic-looking videogames. It therefore seems like this new improved tablet is designed more as a tool for the creative class. The device important to Apple’s efforts to increase control over the number of activities consumers are able to do digitally. The new iPad proves that mobile devices such as tablets can in the future replace personal computers performing the same number of operations. Tim Cook talked on Wednesday about the ‘post PC era’; where PC is just a device not the centre of our technological world, and Apple’s dominance of it. He highlighted the company’s capability to create a broad range of digital devices that had become central part of consumers’ lives.

This launch is the first major event for Apple since the death of Apple co-founder Steve Jobs. Now Apple Executives need to show why all these innovations are worth it. Although the changes are not radical they seem to have met the expectations of technical analysts and Apple followers that have been speculating about the new device for months. Most technical experts are impressed by the improvements and believe the new iPad will sell well. However, others express their disappointment that Apple failed to include haptic touch-feedback technology in the display or access to the iPhone 4S’ voice-controlled Siri ‘intelligent assistant.’ So far there is no explanation as to why the device has not been given a specific name, like expected iPad 3, which may confuse the purchasers. It may be in connection to the trademark dispute raised by Proview but the only reason given was ‘because we don’t want to be predictable’.

Also see: ‘We have something you really have to see. And touch.’ Technological Updates

Since the introduction of the first iPad in 2010, the firm grew rapidly taking over the tablet market. Despite many disputes and lawsuits, Apple continues to dominate the market, having sold over 50 million iPads so far. More than 83 per cent of all U.S. tablet users choose iPad according to eMarketer. The company, however may face a challenge from Microsoft once tablets running Windows 8 system go on sale as the improvements introduced are not considered enough to ensure Apple’s lead in the market.

During the event, Apple also mentioned that a new version of its Apple TV device with higher-resolution video would go on sale March 16. The product enables viewers to get Internet video on traditional TV as well as purchase movies via iTunes across Apple devices. The event was closed by Mr. Cook announcing that there is still more to come this year.

Also see: Apple worth more than most countries in the world! | Apple remains in the centre of patent and trademark disputes | Patent disputes: protecting manufacturers or threatening innovation 

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