【每日阅读训练第三期——速度越障1系列】【1-19】经管 - ChaseDream

Apple’s cash pile: How to spend it

The tech giant should give cash back to shareholders

NOT long after Steve Jobs died last year, wags eulogised the Apple co-founder with a joke: “Ten years ago we had Steve Jobs, Bob Hope and Johnny Cash. Now we have no jobs, no hope and no cash.” Apple may no longer have Jobs, but it fills investors with hope and is brimming with cash. Its market capitalisation recently passed $500 billion, and it has a whopping $100 billion or so of cash on its balance-sheet.

That mountain of money is about to get higher. Apple aficionados are poised to snap up the new gadgets that the company unveiled on March 7th. These include a new iPad, the latest in the firm’s wildly popular range of tablet computers, and a revamped Apple TV device.

If the new iPad, which boasts a super-sharp screen and lightning-fast connectivity, wins friendly reviews, it will give a big boost to Tim Cook, Jobs’s handpicked successor. But the extra cash it delivers will also increase pressure on Apple’s boss and board to explain what they plan to do with the company’s embarrassment of riches. Last month Mr Cook admitted that the firm has more cash than it needs for its operations. It’s a nice problem to have.

The obvious solution would be to give cash back to shareholders, either via dividends or share buybacks. This is a surprisingly sensitive subject. Mr Jobs was obsessed with hoarding cash, not least because of Apple’s near-bankruptcy in the mid-1990s. Returning money to shareholders would mark a big departure from the revered founder’s philosophy. Another reason Mr Cook will want to tread carefully is that some pundits see a tech firm’s decision to start paying dividends as a signal that its glory days are behind it. One oft-cited example is Microsoft, whose growth slowed after it began returning cash to shareholders in 2003.

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Apple is unlikely to suffer a similar fate. Demand for its iGizmos seems insatiable. That is why it needs to come up with ways to invest more of its cash sensibly. Tim Bajarin of Creative Strategies, a consulting firm, reckons Apple could ramp up its forward purchases of components and set up its own semiconductor factories, to give it a tighter grip on a critical link in its supply chain. It could open more physical stores—though their sales would only add to its cash pile. And it may have to fork out more on lawyers’ fees to fight patent lawsuits and deal with other problems, including allegations that it colluded with publishers to fix the price of digital books.On the acquisition front, the firm has long shunned megadeals, preferring to swallow smaller firms with technology and people it covets. That policy is unlikely to change, though Apple may well accelerate its deal-making tempo. Among its likely targets are firms that offer video and other entertainment content, and others with data that could enhance services such as Siri, its virtual personal assistant.

On the acquisition front, the firm has long shunned megadeals, preferring to swallow smaller firms with technology and people it covets. That policy is unlikely to change, though Apple may well accelerate its deal-making tempo. Among its likely targets are firms that offer video and other entertainment content, and others with data that could enhance services such as Siri, its virtual personal assistant.

None of this would put much of a dent in $100 billion. So Apple will probably start handing cash back to shareholders later this year. Working out how to do so will take time, not least because the firm holds much of its money outside America in order to avoid hefty US corporate-tax rates.

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Some Apple fans fret that if the company decides to pay regular dividends, it could end up regretting it. “Apple needs to watch out for dividend addicts,” says Aswath Damodaran, a finance professor at New York University who owns Apple stock. Such shareholders, he adds, will be obsessed with extracting as much cash as possible from Apple rather than with its mission of making mind-blowing products. Perhaps. But the point of shares is that they confer ownership. They are valuable only because shareholders expect—and are entitled to—a share of profits. Apple may have trouble finding a good use for its cash, but its shareholders will not.

Limits on Rare Earth Exports Get China in Trade Dispute

The United States, European Union and Japan have called for talks with China under the dispute settlement system of the World Trade Organization. They want to discuss China's export limits on rare earth metals and two other minerals, tungsten and molybdenum. WTO rules give talks sixty days to work. If they do not settle the dispute, a WTO panel can then be requested to help reach a settlement.

Rare earth metals are used in the manufacture of almost every high-technology device -- from mobile phones and computers to batteries for electric cars. And demand is only growing.

China says it follows WTO rules in exporting the minerals. In twenty ten, China mined about one hundred thirty thousand metric tons of rare earth metals. That was about ninety-seven percent of world production.

But information from China's government and the United States Geological Survey shows that China has reduced its export limits sharply in the past two years. Critics say this unfairly helps Chinese companies in the production of high-technology products. And, they say, it is a violation of World Trade Organization rules.

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This week, President Obama explained why the United States is involved in the case.

BARACK OBAMA: "This case involves something called rare earth materials, which are used by American manufacturers to make high-tech products like advanced batteries that power everything from hybrid cars to cell phones. We want our companies building those products right here in America. But to do that American manufacturers need to have access to rare earth materials, which China supplies. Now, if China would simply let the market work on its own, we'd have no objections. But their policies currently are preventing that from happening, and they go against the very rules that China agreed to follow."

President Obama added that the United States has a productive economic relationship with China. But he said he would take action if American workers or businesses were facing unfair trade policies.

China says it has restricted rare earth exports to meet needs at home. And it says its policy helps limit the environmental damage caused by over-mining.China now faces a slowing economy. In February, the nation had its biggest trade deficit in ten years. Experts expect China's central bank to increase the money supply to aid economic growth. At the same time, inflation remains a threat

China now faces a slowing economy. In February, the nation had its biggest trade deficit in ten years. Experts expect China's central bank to increase the money supply to aid economic growth. At the same time, inflation remains a threat

On Wednesday, Chinese Premier Wen Jiabao discussed the need for reform. He said China "must continue to strike a balance between maintaining steady and robust economic development, making economic structural adjustments and managing inflationary expectations."
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China axes Bo Xilai from Chongqing after scandal

China wraps National People's Congress As a son of a revolutionary veteran and an official with a solid, albeit controversial record, Bo was considered a strong contender for promotion into the Standing Committee of the party's Politburo, whose nine members decide how to how run China.

China deals with wealth gap In autumn this year, the Communist Party Congress will convene in Beijing to confirm sweeping changes in this 1.37 billion-strong nation.What in the world Held every five years, it will set national priorities and choose a new set of leaders.

What in the world Held every five years, it will set national priorities and choose a new set of leaders.

Wealth gap opening in China The stage is set for the race to the top.

That race is opaque, mostly decided inside the leadership compound in Zhongnanhai by various factions and vested interests -- conservatives, reformers, party apparatchiks, technocrats, regional leaders, army officers and princelings -- or taizi, referring to the children of veteran officials.

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越障

Schumpeter

Slaves to the smartphone

The horrors of hyperconnectivity—and how to restore a degree of freedom

“THE SERVANT” (1963) is one of those films that it is impossible to forget—a merciless dissection of the relationship between a scheming valet (played by Dirk Bogarde) and his dissolute master (James Fox). The valet exploits his master’s weaknesses until he turns the tables: the story ends with a cringing Fox ministering to a lordly Bogarde. The film was an indictment of the class structure of Harold Macmillan’s Britain. But it is hard to watch it today without thinking of another fraught relationship—the one between businessfolk and their smartphones.

Smart devices are sometimes empowering. They put a world of information at our fingertips. They free people to work from home instead of squeezing onto a train with malodorous strangers. That is a huge boon for parents seeking flexible work hours. Smartphones and tablets can also promote efficiency by allowing people to get things done in spare moments that would otherwise be wasted, such as while queuing for coffee. They can even help slackers create the illusion that they are working around the clock, by programming their e-mail to be sent at 1am.

But for most people the servant has become the master. Not long ago only doctors were on call all the time. Now everybody is. Bosses think nothing of invading their employees’ free time. Work invades the home far more than domestic chores invade the office. Otherwise-sane people check their smartphones obsessively, even during pre-dinner drinks, and send e-mails first thing in the morning and last thing at night.

This is partly because smartphones are addictive: when Martin Lindstrom, a branding guru, tried to identify the ten sounds that affect people most powerfully, he found that a vibrating phone came third, after the Intel chime and a giggling baby. BlackBerrys and iPhones provide relentless stimuli interspersed with rewards. Whenever you check the glowing rectangle, there is a fair chance you will see a message from a client, a herogram from your boss or at least an e-mail from a Nigerian gentleman offering you $1m if you share your bank details with him. Smartphones are the best excuse yet devised for procrastination. How many people can honestly say that they have never pruned their e-mails to put off tackling more demanding tasks?

Hyperconnectivity exaggerates some of the most destabilising trends in the modern workplace: the decline of certainty (as organisations abandon bureaucracy in favour of adhocracy), the rise of global supply chains and the general cult of flexibility. Smartphones make it easier for managers to change their minds at the last moment: for example, to e-mail a minion at 11pm to tell him he must fly to Pittsburgh tomorrow. The dratted devices also make it easier for managers in one time zone to spoil the evenings of managers in another.

Employees find it ever harder to distinguish between “on-time” and “off-time”—and indeed between real work and make-work. Executives are lumbered with two overlapping workdays: a formal one full of meetings and an informal one spent trying to keep up with the torrent of e-mails and messages.

None of this is good for businesspeople’s marriages or mental health. It may be bad for business, too. When bosses change their minds at the last minute, it is hard to plan for the future. And several studies have shown what ought to be common sense: that people think more deeply if they are not constantly distracted.

What can be done to keep smartphones in their place? How can we reap the benefits of connectivity without becoming its slaves? One solution is digital dieting. Just as the abundance of junk food means that people have to be more disciplined about their eating habits, so the abundance of junk information means they have to be more disciplined about their browsing habits. Banning browsing before breakfast can reintroduce a modicum of civilisation. Banning texting at weekends or, say, on Thursdays, can really show the iPhone who is boss.

Together we can outsmart our phones

The problem with this approach is that it works only if you live on a desert island or at the bottom of a lake. In “Sleeping with Your Smartphone”, a forthcoming book, Leslie Perlow of Harvard Business School argues that for most people the only way to break the 24/7 habit is to act collectively rather than individually. She tells the story of how one of the world’s most hard-working organisations, the Boston Consulting Group, learned to manage hyperconnectivity better. The firm introduced rules about when people were expected to be offline, and encouraged them to work together to make this possible. Many macho consultants mocked the exercise at first—surely only wimps switch off their smartphones? But eventually it forced people to work more productively while reducing burnout.

Ms Perlow’s advice should be taken seriously. The problem of hyperconnectivity will only get worse, as smartphones become smarter and young digital natives take over the workforce. People are handing ever more of their lives over to their phones, just as James Fox handed ever more of his life over to Dirk Bogarde. You can now download personal assistants (such as Apple’s Siri) that tell you what is on your schedule, and virtual personal trainers that urge you take more exercise. Ofcom, Britain’s telecommunications regulator, says that a startling 60% of teenagers who use smartphones describe themselves as “highly addicted” to their devices. So do 37% of adults.

The faster smartphones become and the more alluring the apps that are devised for them, the stronger the addiction will grow. Spouses can help by tossing the darned devices out of a window or into a bucket of water. But ultimately it is up to companies to outsmart the smartphones by insisting that everyone turn them off from time to time.