Apple can afford to be more generous
Apple, the world's most valuable company, also has long been one of the greatest cash hoarders. The iPhone and iPad maker, embarrassed by its hoard of almost US$100 billion, decided this week to change perceptions by paying its first dividend in 17 years. It is hardly an innovative way to offload a mountain of cash, but shareholders are naturally happy and there is a sense that at last the firm will start to act in a more equitable way. If its board truly has a conscience, it should next reward its contracted workers in China.
The US$45 billion in dividends over three years and US$10 billion in share buybacks announced by chief executive Tim Cook was an obvious way to deal with what he said earlier this year was 'more than we need to run a company'. With the launch on March 7 of the third generation of the wildly popular iPad, the cash on Apple's balance sheet is further ballooning. Despite the soaring wealth, though, the company has a culture of being tight-fisted. Breaking with that has been difficult, given the god-like status it affords its late co-founder Steve Jobs, whose obsession with stashing away was grounded in the company's near-bankruptcy in the mid-1990s before he rejoined.
Jobs' clever marketing of a string of innovatively designed products pulled Apple out from the doldrums. It surpassed the landmark US$500 billion market capitalisation level last month and climbed past Exxon Mobil to reach the top of the global tree in terms of value. Shareholders should expect, and have a right to, a return for their investment. But the Chinese working for Apple's dozens of contracting firms, the best known among them Foxconn, also deserve a share.
They are the ones, after all, who have laboured excessively long hours for US$17 a day to enable Apple's profits to soar. Many are well paid compared to counterparts in other mainland industries, but they can still not even afford the gadgets that they make. Although Apple is helping to improve their conditions, it should go a step further by showing its gratitude. An iPad, or even shares, would be a start.