Amassing more cash on hand than spending it provides a few things. Here are some theories…

1. At some point, their cash on hand and its interest will exceed the cost of operating the company. At that point, the company reaches a threshold where it can never die again, completely avoiding a scenario where they reach near bankruptcy like in 96/97, even if their product line fails and their innovation stalls.

2. Huge strategic acquisitions beyond the minor ones they’ve done. Arguably Apple is a hardware company and software company. They have operating systems, desktop grade software, and obviously solid hardware. What they lack is a huge web arm, the likes of Google, Facebook, Amazon, etc… Since most of that is lacking and there is little overlap in some cases, particularly Facebook (out of the 3 examples listed), there is little anti-trust and potential to acquire a strategic arm that could deliver more. Ignore what FB is, and look at potential of what it could “do” with Apple.

Some examples are a social cloud base OS. Imagine a platform that has social identity built in for application development. Imagine re-writing the phone system with a pure VoIP network base not on phone numbers but on identity with full privacy controls and block access. Instead of paying two plans (phone and data), you pay only one and wipe the entire phone system. These are ambitious things and there are probably a ton of other things you can do but to be able to control that and push towards a new era would be amazing.

3. It could certainly continue what it does and open an R&D division for advanced research beyond what it currently do, similar to a Xerox PARC of its own. It can lower cost of goods even more by locking in more and increase margins.

The possibilities are endless and to go short sighted on this would be poor judgement.

Don’t forget about us.

Not paying a dividend is the irresponsible path. The management distraction is the ever-growing cash horde and the lack of discipline it enforces.

They have to find uses of cash because it’s become irresponsible not to. I can’t wait till tomorrow till all of the ridiculous nonsensical notions that Apple can somehow make use of this money for >other< than entirely financial purposes get set aside.

At least some of it has to be returned to shareholders. Management runs the risk of becoming seriously undisciplined if they keep looking at their barely-interest-earning bank accounts and saying, "well, we have years of safety net, we don't really have to worry much". You should want Apple to worry.

No matter what they announce (and the smart idea is a dividend, the far-less good one is a buyback), they'll still maintain a huge cash horde with which to control enough of the supplier markets and maintain a rainy-day fund.

No acquisition Apple would ever contemplate would take a meaningful chunk of the firm's cash. Period.