Apple recently announced a 2012 first quarter net profit of $13.06 billion (http://www.apple.com/pr/library/2012/01/24Apple-Reports-First-Quarter-Results.html ), raising its total profit over the past four quarters to nearly $33 billion. That’s profit, not sales; sales amounted to nearly $128 billion.
The Cupertino California company, which has amassed a war chest of nearly $100 billion in cash, generated major publicity last week with their plan to spend $10 billion on yearly dividends and another $10 billion on later stock buy-backs. This plan will cut down their rate of cash growth. However, as long as sales and profits remain near their current levels, the company will finish 2012 with over $120 billion in the bank and will add another $13 billion to the total every subsequent year.
What on Earth can Apple possibly due with all this money?
You can be sure that Apple executives have heard from a lot of people with crazy ideas for how they should spend their money. Now it’s my turn.
My advice to Apple: Start your very own space program.
Let’s daydream a little. Imagine what could happen if Apple was even remotely interested in space exploration. Right away we must try not to roll around on the floor, laughing hysterically, because that would wake us from our happy little daydream. Most consumer electronics companies don’t show much vision, but Apple has a pretty good reputation in that regard. So, what if…
- Apple funded NASA. US taxpayers will invest $3.6 billion this year to fund NASA’s space exploration budget and another $4.5 billion to fund its science programs. If Apple bought NASA’s space exploration and science programs and raised the budgets by 80%, they still wouldn’t have to dip into their $100 billion bank account – even after the dividend and the stock buyback.
- Apple bought another planet. Investing $2 billion/year into a five year program to develop Mars settlement technologies would allow Apple to run an ongoing $1 billion/year program of Mars settlement. Even if the company spent five times as much during the technology development phase and ten times as much during the build phase (perhaps to construct ten separate settlements?), the company still wouldn’t have to dip into their bank account. Along the way, Apple would have earned the right to rename the fourth planet from the Sun (after all, apples are round, red things too).
- Apple built an outpost on the Moon. Constructing a small lunar outpost would be more expensive than a permanent Mars settlement (assuming a two-way transport requirement). However, the up-front technology development program would cost about the same: $2 billion per year over five years. The on-going yearly construction and maintenance budget would probably top $3 billion/year, which means Apple could only afford four lunar outposts without dipping into their savings account. Or… they could afford two lunar outposts and five permanent settlements on planet Apple.
- Apple bought advanced tickets to Mars from Elon Musk. Noted rocket builder Elon Musk recently made headlines with his prediction that a round-trip Mars ticket on a fully reusable transport system would only cost $500,000. Let’s add a 100% margin to help him pay for the massive investment into said reusable transport system… and Apple’s profits of $13 billion/year would buy 26,000 round-trip Mars tickets during each 2-year launch window. Since Apple only has ~60,000 employees world-wide, they could afford to send nearly half their workforce on a grand Martian vacation every two years.
Back to reality
That was a nice little daydream, wasn’t it?
While several estimates above are quite difficult to forecast (for example, no one knows exactly how much a private corporation would have to invest into up-front Mars settlement technologies, nor how much profit they would make from these technologies on Earth), the numbers should be accurate to within a ballpark’s distance. This whole thought-exercise reveals just how large a ballpark Apple has built.
If Apple sales, revenues, and profits falter, they would have to scale back their plans for galactic domination or dip into their $100 billion war chest. On the other hand… a 10% rate of return on their current savings adds up to $10 billion/year. Even if Apple profits totally disappear over the next few years, they could still fund a robust space program near the levels stated above.
Everyone repeat after me: “Mercury, Venus, Earth, Apple, Jupiter, Saturn….”