Second only, perhaps, to Google as the defining tech giant of this century, Apple has grown used to shocking the world. They’ve done it again in the past fortnight. Twice.
First, they announced a decline in year-on-year profits for the first time in a decade. Instantly their share price dropped and critics, sceptics and doom-mongers jumped forward ready to proclaim the collapse of the computer behemoth. Even as the cries of ‘the end is nigh’ were echoing across the internet, Apple announced a $17bn bond sale, one of the largest corporate bond sales in history.
A large proportion of Apple’s assets are held overseas and this bond sale will allow it to start moving that money back to the US without paying transfer taxes. Apple is offering bonds with lifespans ranging from three years to thirty years at more attractive rates than the vast majority of banks and governments, and the furore surrounding this sale meant that, when the $17bn went on sale this Tuesday, it was significantly oversubscribed.
Apple’s marketing strategy has always been a master class in understated efficiency – let the quality of the product speak for the company. This bond sale is a similarly masterful strike. Despite not being accustomed to having to react to negative coverage, this is crisis management at its most confident. Instantly, we’ve been reminded that Apple still retains such market dominance that investors are literally queuing up to lend money to them. And it ensured that key statistic was included in numerous articles – Apple has $145bn in cash. What is a decline of $2bn in annual net profit to a company with $145bn in cash?
However, it remains an interesting time for the company. Never again can Apple pride itself on being the only technology company without any debt. Reactive product releases and reactive financial strategies are becoming the norm when once they were non-existent. And this level of insight into Apple’s notoriously secretive business machinations feels unusually revealing.
No-one can say this is the end for Apple, Apple’s CEO Tim Cook continues to hint at the imminent release of another game-changing innovation and as far as capital barriers go, $145bn in cash certainly buys you room for manoeuvre.
So whilst it’s always fascinating to watch Apple undergo periods of reinvention, it remains a pleasure to watch this brand silence its critics and reaffirm its dominance with such ease. Crisis management at its most bullish.