These observations are not my opinions, they are well sourced historical facts from a time when I was steeped in pioneering globally distributed systems, massive object-relational data warehouses, building wireless mobile computing solutions, and some of the first SaaS products over the Web.
Keep dancing. But you don't do it well. None of that background, although impressive, qualifies you for the knowledge you claim about Apple's history. Especially since what you have previously spouted was deliberately skewed.
Apple didn't have anything close to $1.2 billion available to "run the business" (let's see if you can pay engineers or vendors with depreciation). They were about as financially strong as GM was last fall.
Depreciation is never allowed to be considered CASH... and it isn't liquid by any means... no matter how much you want to pretend that's where Apple's cash was located. You're blowing smoke.
Exactly where does the negative amount for depreciation enter into CASH? Let's look at the 10Q assets:
Looking there I see CASH and CASH equivalents of 1.018 Billion and short term investments of .212 Billion... That easily makes 1.240 Billion in liquid assets.
In addition, there are .336 Billion in finished goods, some of which historically can be counted as liquid assets, depending on past sales rates.
Other assets such as Accounts Receivable (one way of hiding lack of real sales that represent cash) went DOWN... so they were making more cash sales rather than credit sales.
Looking at the liabilities we find that money owed to banks (borrowed) is DOWN while long term debt remained about the same.
Where are they hiding all this red ink that supposedly reduced their cash holdings? If what you say is true, the SEC would have had all of Apple's BoD up on charges. They didn't. Ergo, it is you who is distorting the facts.
As to the three interlocking agreements between Apple and Microsoft that settled the Quicktime lawsuit (which could have resulted in huge losses to Microsoft), the following paragraphs are taken from Sections 5 and 6, Paragraph 5.6 and 6.6 respectively of the Preferred Stock Purchase Agreement between Apple Computer Inc., and Microsoft Corporation dated August 5, 1997:
" 5.6 PATENT CROSS LICENSE AGREEMENT AND TECHNOLOGY AGREEMENT. The Company [Apple Computer, Inc.] shall have executed and delivered the Patent Cross License Agreement and Technology Agreement substantially in the forms attached hereto as Exhibit A and Exhibit B, respectively.". . .
6.6 PATENT CROSS LICENSE AGREEMENT AND TECHNOLOGY AGREEMENT. The Purchaser [Microsoft Corporation] shall have executed and delivered the Patent Cross License Agreement and Technology Agreement substantially in the forms attached hereto as Exhibit A and Exhibit B, respectively.
In other words, the sale would NOT take place until the Patent Cross License Agreements were in place. Which makes it very clear exactly what is going on here—the settlement of the lawsuit.
Incidentally, the attached exhibit for MS's licensing of Apple patents had blanks were the amounts of the licensing costs to Microsoft were to be inserted while the exhibit for Apple's licensing of MS patents had no such costs attached... but the actual two final agreements were placed under a court ordered seal.
Is that enough of a "smoking gun?"
As further evidence of who lost and who won, Paragraph 4.7 of Section 4, explicitly states that the purchaser knows that these shares are sale restricted! Stress mine:
"4.7 RESTRICTED SECURITIES. The Purchaser understands that the Shares to be purchased by the Purchaser hereunder are characterized as "restricted securities" under the Securities Act inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under the Securities Act and applicable regulations thereunder such securities may be resold without registration under the Securities Act only in certain limited circumstances. The Purchaser is familiar with Rule 144 of the SEC, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. The Purchaser understands that the Company is under no obligation to register any of the Shares sold hereunder except as provided in the Registration Rights Agreement.Whow... that's some limitation on MS's "investment." I can smell the cordite from here...
In addition, some reports indicate that Microsoft had to pay up to $2 billion to Apple in licensing fees over the next five years... and Apple's books seem to show that kind of income coming from undisclosed sources.
"What wasn't widely reported about the July 1997 agreement was the subtle mention of other payments Microsoft agreed to make in addition to investing a paltry $150 million in stock. That amount was never publicly disclosed, but Apple's financial records suggest it was substantial.Despite losing $850 million the year before, over a billion dollars in 1997--of which around 600 million was related to buying NeXT, and suffering a billion dollar drop in revenues between 1997-1998, Apple mysteriously managed to maintain its investments and actually accumulated cash.
It wasn't until 1998 that Apple began selling off its shares in ARM, and those sales took place over several years. Prior to that, how did Apple manage to spend nearly two billion dollars more than it earned across two years, lose 14% of its income, and still manage to sit on the same $1.2 billion in cash without pawning anything?"—Source.
And another:
". . . Apple was ready to finally win a much bigger suit (1997) based on Microsoft's theft of QuickTime technology (via Canyon). Steve Jobs used this leverage to get Microsoft to do a patent "swap" where Microsoft pays Apple $500M-$2B over 4 years, and Microsoft also coincidentally bought some Apple stock ($150M) and started playing nice. Microsoft agreed to make Mac Apps for the next few years, and some other PR moves. Of course the press only reported the parts that reflected well on MS."—Source.
Somehow, Apple maintained itself during the build up of the iMac, all the way to the release of OS X in 2001.
With Apple, he steadfastly clung to total design and manufacturing control over the hardware and OS. If he had been a little less myopic in this area, he would have thrown everything into porting the Mac OS to the Intel platform ahead of Microsoft's anemic Windows wrapper around DOS, and Jobs / Apple would have owned the desktop future - crushing Microsoft's primary profit engine. But, Jobs was obsessed with total control of the platform stack - including going to war against commodity hardware manufacturers where everyone but Steve Jobs could plainly see they could never win the battle - and it cost him his job and almost bankrupt Apple."
He did??? More of your revisionist Apple history, UncommonNONsense. He did not have a chance to do it. Steve Jobs was not employed at Apple during that entire period—1985 to 1997—and in fact did not return to Apple until just before the release of Windows 98. It would be hard for an ousted Jobs to direct ANYTHING that Apple did during this period. Your scenario is trumped by the almost 12 year time span between Jobs ouster and the financial difficulties Apple was experiencing in 1997. His decisions had NOTHING to do with Apple's financial problems. Licensing MacOS to third party clone makers had everything to do with it.
You might also note that Steve Jobs got over-ridden on the pricing of the original Mac. Jobs wanted to sell it for $1699... but Sculley insisted on $2499, thus missing another opportunity to grab the initiative. That was the start of the disputes that eventually lead to Jobs resignation (not fired) from the BoD.