Business

Apple's new cash record of $355 billion is 87% of Singapore's GDP

When Apple announced its second-quarter earnings yesterday, what really got the Internet buzzing was that its mountain of cash grew 13 per cent year-on-year to a new record of US$261.5 billion (S$355 billion).

Singapore's gross domestic product (GDP) for last year was $410.3 billion - so Apple's cash reserves are as much as 87 per cent of Singapore's economic output.

Put it another way, Apple could buy tech-based companies Uber, Tesla, Netflix, Airbnb and Twitter and still have US$29 billion left over, said CNBC.

This is thanks to years of huge profits from selling iPhones, iPads and apps from its store.

Apple has made few big acquisitions. Instead, it spends a few billion each quarter on fuel research and development.

It also stashes most of its cash overseas, where the money is not subject to US taxes. Chief financial officer Luca Maestri said yesterday that US$246 billion, or 94 per cent of its total cash, was outside the US.

CNN reported that non-financial US companies piled up US$1.84 trillion of cash at the end of last year, based on research by credit ratings agency Moody's. That is up 11 per cent from 2015 and nearly 2½ times the 2008 level.

The top five hoarders were all tech companies - Apple, Microsoft, Google parent Alphabet, Cisco and Oracle.

US President Trump is hoping to change all that with his promise to pass tax reform that will include a tax holiday to encourage companies like Apple to bring their cash pile home. - THE STRAITS TIMES

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