Apple Could Pay Cash for Dell

Apple Could Pay Cash for Dell

Eleven years ago, Michael Dell, CEO of Austin, TX-based Dell Computers was asked what he would do if he were CEO of Apple Computers. His answer: “I’d shut it down and give the money back to the shareholders.”

It’s hard to know what Steve Jobs would say if he were asked the same question today, because he rarely speaks to the press. But if he wanted to, he could do the very same thing for Dell, Inc. shareholders tomorrow and still have about $10 billion left in the bank.

Apple reported nearly $25 billion cash-on-hand at the end of FY2008 Tuesday and Dell had a market cap of about $24 billion with $9 billion cash of its own at the close of trading on Thursday, graphic indications of the changed fortunes of the two companies over the past decade or so.

Mr. Dell retains a considerable advantage over Mr. Jobs in personal wealth, however, with a Texas-sized net worth of $17.3 billion compared to Jobs’ mere $5.7 billion.

Looking at the chart above comparing the price movements in the stock of the two companies in the past ten years, you have to wonder what they’ve been up to down there in Austin, don’t you?

Via Fortune

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  • Bryan Walls

    Though perhaps ironic, there is no reason I can think of that Apple would want Dell.

    How ’bout instead for Apple to buy a bank? They’re cheap and insured by the government.

    iBank could be integrated into MobileMe. Online banking at your fingertips from any machine. The iPhone or touch for instant payment at any cooperating store. Micropayment for web purchases integrated for other sites, like the iTunes Store does now. Maybe iBalance as part of iLife, an Apple-designed Quicken replacement?

    Apple could loan out some of that cash on hand, too.

    What else might Apple buy in this buyers market?

  • Wayne Kilburn

    Watch for Apple to use their reserves to put their cash reserves to work by acquiring talent and assets that they can’t quickly build internally. $25 billion is a whole lot to be left inactive. And, these are the times when financially strong companies can position themselves for the future by selectively buying weaker assets.

  • Dreyfus

    Hm, most “experts” agree that the financial crisis will be with us for most, if not all, of 2009. Dell caters to a lot of businesses and most of them can easily reduce replacement cycles (from 3 to 5 or even 6 years). Without “upgrading” to Vista the old hardware will do for quite a while longer (no resonable IT head will go through that excercise anyhow, with Windows 7 being scheduled for 2009) – the same OS was good enough for more than 6 years.

    Chances are that quite a few companies (and Dell being a top candidate) will be cheaper 18 months from now. Why burn money just to buy something that is not competitive and not generating synergy effects and destined to loose value. You would not expect them to buy Palm either?!

About the author

Lonnie Lazar

Lonnie Lazar is a writer-musician-web designer-attorney. He writes about Apple for Cult of Mac and Mac|Life, and about VoIP and telecommunications for Voxilla. Follow Lonnie on Twitter @LonnieLazar, join the Cult of Mac on Facebook, and find Lonnie's photos on Flickr.

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