Apple announced it will buy back another $100 billion of its own stock on Tuesday, as part of its quarterly earnings report.
When the GOP tax law was passed, there were fears that companies would use the extra cash to enrich shareholders, rather than employees — and this would seem to fuel those concerns.
Apple's chief financial officer, Luca Maestri, defended the buyback on an earnings call Tuesday evening, saying the company's stock is undervalued and arguing it has enough cash to satisfy multiple corporate needs.
When President Donald Trump's massive tax plan was announced, experts immediately feared the worst about how companies would spend the additional cash they'd soon have for deployment.
They figured corporations would choose to enrich shareholders through buybacks and dividends, rather than reinvest in their own businesses or create jobs.
Cost of Apple products through the years
Cost of Apple products through the years
Apple II (1977)
Cost Then: $1,298 Cost Now: $5,333
Compared to 1976's Apple I, the Apple II was a revelation. While the first Apple lacked a monitor, separate keyboard or casing, the Apple II included the whole package, complete with the introduction of five-color on-screen graphics.
Adjusted for inflation, you could buy a used car for what the Apple II costs, but its price tag had brought the budding company $7.8 million in sales by 1978 — about $30 million in today's money.
Cost Then: $2,495 Cost Now: $6,036
This is when the world started calling Apples "Macs."
Though dropping six grand on a computer today is cringe-worthy, the original Macintosh was considered the first relatively affordable computer with a graphical interface at the time. Its specs included a whopping 128 KB of RAM, 400 KB of storage, a floppy disk drive and a 9-inch monochrome display.
Cost Then: $6,995 Cost Now: $16,207
Apple no longer makes printers, but the LaserWriter was a huge initiative at the time. Its professional print quality aimed for the business market, and it was the first network-capable printer.
It also introduced the world to Adobe Systems, which provided the PostScript programming language that powered the machine. If the original price looked scary, it was, so Apple dropped it to $5,000 by fall 1986.
Cost Then: $700 Cost Now: $1,192
Developed while legendary Apple co-founder and former CEO Steve Jobs was away from the company, and famously derided by him, the tablet-like touchscreen Newton paved the way for the success of the PDA, and later, the iPad. This small, hand-held product didn't catch on at the time, but it played a role in inspiring today's "all-in-one" device design, and even featured ahead-of-its-time handwriting recognition capabilities.
Power Macintosh (1994)
Cost Then: $2,600 Cost Now: $4,282
The closest modern equivalent of the Power Mac, the Mac Pro, starts at $2,999. Of course, its specs are just a little different.
While the original Power Macintosh — which was sold as the Macintosh Performa 6110CD for home use — sported a 60 MHz PowerPC 601 processor, the Pro rocks a 3.5GHz, 6-core Intel Xeon E5 processor and its 8 MB of RAM are dwarfed by the Mac Pro's 16 GB of RAM.
iMac G3 (1998)
Cost Then: $1,299 Cost Now: $1,967
The introduction of the iMac in 1998 marked the first time Apple used its much-imitated "i" branding. At the time, the "i" in "iMac" stood for "internet," as the all-in-one desktop computer featured a built-in modem, which was uncommon when it launched. The first model came in a blue-green hue, called "bondi blue and ice" by Apple, but it later was available in a rainbow of colors. It marked the first major Apple work by iconic designer Jony Ive.
The iMac line looks a lot different — and less colorful — today, but it's still kicking, with 21.5-inch models starting at $1,099.
Final Cut Pro (1999)
Cost Then: Starting at $300 Cost Now: $450
With so much focus on slick hardware, it's easy to overlook the fact that Apple is a software company, too — unless you're a filmmaker who just dropped $300 on Final Cut Pro, that is.
The pitch remains the same today as it was in 1999: For one price, you get editing, compositing and effects in one professional software package. Apple positioned Final Cut as a "post-production studio in a box," though the philosophy changed a bit as numerous software expansions continued to add features.
Cost Then: $299 Cost Now: $442
AirPort started with multiple offerings, and the tradition continues. Introduced as a wireless networking solution for 802.11b connections, the AirPort Base Station looked like a tiny UFO, but you always could opt for an AirPort card to add wireless functionality to your Mac.
Today, you can get AirPort models spanning from the Express to the 3TB Time Capsule, ranging from $99 to $399.
Power Mac G4 Cube (2000)
Cost Then: $1,799 Cost Now: $2,567
The Power Mac G4 Cube's beautiful design couldn't offset the high price tag, which, consequently, led to its marketplace struggles.
By 2001, its entry-level price had been slashed to $1,299. The cube-shaped brains of the box live today in the form of the Mac Mini series, however. Though the Mini doesn't include a monitor, keyboard or speakers like the G4 Cube, it starts at a much more reasonable $499.
Cost Then: Starting at $399 Cost Now: Starting at $554
From 2001 to 2011, Apple sold 300 million iPods. Though the idea of a dedicated MP3 player seems outdated today, the at-the-time appeal of carrying 1,000 songs on the original, scroll-wheel-equipped model's 5 GB hard drive cannot be overstated.
The iPod line eventually included a wide variety of models — from the Nano to the Shuffle — but Apple has since consolidated its offerings to just the iPod touch, which retails for $199 or $299, depending on storage size.
Cost Then: $1,099 Cost Now: $1,338
Remember the early 2000s, when all the coolest tech products — from the iPod to the Wii — were glossy white? Yep, the MacBook was, too.
Starting a legacy that still thrives, the original 13-inch MacBook laptop was powered by a 1.83 GHz Intel "Core Duo" processor and featured a 13-inch widescreen display, complete with modern perks, such as a built-in iSight camera, USB ports and Bluetooth compatibility. Nowadays, an entry-level MacBook starts at a fairly comparable $1,299.
Cost Then: Starting at $499 Cost Now: $608
Before you can sell a billion, you've got to start with one. The iPhone might not have been the first all-in-one hand-held device, but its mainstream appeal and standard feature set established the baseline for the modern smartphone. If your current device has WiFi support, Bluetooth, a camera, glass screen, accelerometer and multi-touch, you probably can thank the iPhone.
In 2018, an iPhone 8 with a 4.7-inch display will cost you $699, meaning Apple actually has raised the price in this arena.
MacBook Air (2008)
Cost Then: $1,799 Cost Now: $2,191
Originally touted for its crazy-thin dimensions, the MacBook Air eventually caught up in terms of power and completely replaced the MacBook line from 2012 to 2015. Because Apple has had a full decade to get a better handle on squeezing more power into less space, modern MacBook Air laptops come at a much lower cost — in 2018, a 13-inch MacBook Air can be had for $999.
Cost Then: Starting at $499 Cost Now: $568
Microsoft introduced the tablet format in 2000, but it was Apple that finally got the tablet to catch on in 2010. Even Microsoft co-founder Bill Gates acknowledges that Apple "did some things better than I did," noting that Apple nailed it in terms of "timing," "engineering work" and "just the package that was put together."
Today, Apple offers standard 32GB model iPads from $329.
iPhone 6 (2014)
Cost Then: Starting at $549 Cost Now: $569
The iPhone 6 makes the list not necessarily for its feature set, but for its groundbreaking mainstream penetration. Between the iPhone 6 and 6 Plus, this model has sold more than 100 million units since its introduction in 2014, making it the best-selling iPhone to date.
Perhaps due to this ubiquity, you still can get a 4.7-inch iPhone 6s, the phone's more advanced update, straight from Apple for $449.
iPhone X (2017)
Cost Then and Now: $999
Buoyed by crazy hype and endless rumors, Apple premiered the iPhone X in 2017, using its curved Super Retina screen and facial recognition features to test the waters of a high-priced, premium smartphone market.
With reports suggesting that Apple aims to halve iPhone X output in the first quarter of 2018 because of weak holiday sales, the gambit might not have paid off. But with a quarterly revenue of $88.3 billion in the fiscal quarter ending on Dec. 30, 2017, the giants from Cupertino, Calif., probably aren't sweating too much.
Sure, the announcement boosted Apple's stock immediately — it was 3% higher in early trading on Wednesday — but it also fueled concerns that companies are spending their tax reform windfall with shareholders in mind, rather than employees.
Apple's chief financial officer, Luca Maestri, didn't seem particularly concerned on the company's earnings call on Tuesday. He rationalized the buyback authorization by saying Apple's stock is still undervalued, and said the firm is still sinking money back into its business.
"Our balance sheet and our cash flow generation are strong and that allows us to invest significantly in our product roadmap and still return a very meaningful amount of capital to our shareholders," said Maestri on the call.
Looking outside of Apple, UBS finds that corporate reinvestment — as measured by capital expenditures — has surged 39% so far this earnings season. That's outpaced net share buybacks (16%) and dividends paid (11%) by more than double, and is the fastest rate since 2011, according to the firm's data.
That should put investor minds at ease somewhat as they study the use of tax reform proceeds. There appears to be enough cash floating around to meet multiple needs at once — and it would seem Apple is trying to do just that.