Don’t raise your dividend, Apple!

Why the company needs to recklessly squander its cash hoard

Rob Walker, Yahoo News
Yahoo News

By Rob Walker

There’s been talk for months about what exactly Apple should do with its “hoard” of cash and investments, and it’s only gotten louder as that mountain has grown to a remarkable $137 billion. The company is now reportedly “poised” to increase its dividend, which plenty of its investors believe to be a sensible course. But forget the sensible course. Maybe what the company should do with that money is something crazy—or even better, a whole bunch of crazy things. 

A mammoth cash war chest sounds like a great and reassuring thing to have, because it “demonstrates that the company can innovate, acquire and move into other markets very easily,” TechCrunch noted earlier this year—before adding: “not that the company is actually spending a lot of unused money for those tasks.”

Exactly. In fact it seems like ages since Apple has made news for innovating, or even for being particularly interesting. Apart from the overly familiar rumors that it will get into the TV business, Apple-related headlines are all about patent disputes, supply chain controversies, badmouthing Samsung, apologizing for the weak execution of its me-too maps app, and of course hand-wringing about what to do with all its extra money. Oh, and the iPad Mini. Which is like an iPad but, you know, smaller. How thrilling.

Meanwhile, last week Matthew Yglesias at Slate praised the “animal spirits” of Google. It’s easy to snicker at expensive and weird-sounding efforts like driverless cars, sci-fi glasses, and rewiring Kansas City. “These are special kinds of investments that don't necessarily make a ton of sense,” Yglesias allowed, but society would be better off if more firms pursued projects that transcend the short-term bottom line. And besides, big crazy risks are what lead to big crazy payoffs. The iPod was not the result of cautious and sensible thinking, and that worked out pretty well for Apple.

And as it happens, the risk-taking spirit that helped create the iPod is alive and well, as The Economist recently noted in a mini-profile of that device’s co-creator, Tony Fadell. The bad news is that Fadell is no longer at Apple. He is now the head of Nest Labs, which is currently attempting to reinvent home energy by way of its stylish (in a decidedly Apple-y way) Nest Learning Thermostat.

Possibly it’s hard to imagine Apple itself jumping into the business of heating and cooling systems—but why is that? It doesn’t make a lot of sense for a search engine company to dabble in cars and fiber-optic cable projects, but it’s happening. And Nest Labs is simply a particularly stark example of how Apple sensibilities already find their way into surprising categories. Too bad for Apple that it’s happening by way of a completely different company.

Perhaps the much-anticipated Apple wristwatch will turn out to be so electrifyingly cool that it will breathe new energy into the company’s reputation, but even the rumors make it sound more like another iteration of what Apple’s been doing for years than a challenging surprise.

That’s why it is time for Apple to take some of that extra money and back a bold, crazy initiative, or five. Take on categories that don’t sound very Apple-y at all. Surprise us: High-speed rail! Domestic robots! Healthcare! And risk complete, humiliating failure.

It may not turn out to be money well spent. But if it changes the conversation about Apple back to one about unexpected design and technology breakthroughs, it will at least have been money well squandered.