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Apple's dividend plan a break from Steve Jobs era

(Xinhua)

09:19, March 21, 2012

SAN FRANCISCO, March 19 (Xinhua) -- Apple's announcement on Monday about dividend payment and stock buyback may signal a shift of corporate thinking from the Steve Jobs era, analysts said.

On a conference call Monday morning, Apple executives declared that the company is going to initiate a quarterly dividend of 2.65 U.S. dollars per share sometime in the fourth quarter of its fiscal year of 2012, which begins on July 1.

The last time when Apple paid a dividend was in 1995, the year before Steve Jobs returned to Apple after he left the company in 1985 following a power struggle with its board of directors.

Also on Monday, Apple announced that it is planning a 10- billion-dollar share repurchase program over the next three years, which is scheduled to begin on Sept. 30, the start of its 2013 fiscal year.

Apple will pay about 45 billion dollars of domestic cash in the first three years for the dividend and share repurchase program, according to Peter Oppenheimer, the chief financial officer of the company.

The new program provided answers to the question of what Apple would do with its large stockpile of cash, nearly 98 billion dollars as by the end of 2011.

But it also represented a different direction for Apple under the leadership of Tim Cook, who took the role of the chief executive officer (CEO) in August in 2011 from Steve Jobs, the Apple co-founder who died on Oct. 5 last year.

"Apple would have never paid a dividend under Jobs," Gene Munster, an analyst from Piper Jaffray, was quoted by technology blog AllThingsD as saying.

"Apple paying a dividend is evidence that the company is making its own decisions, not just blindly following in Jobs's footsteps, " Munster noted.

Asked at a shareholder meeting in 2010 about why Apple hadn't paid a dividend, Jobs reportedly said dividends do not increase the value of the company for shareholders.

"Our goal is to increase enterprise value," he said. "Which would you rather have us be? A company with our stock price, and 40 billion dollars in the bank? Or a company with our stock price and no cash in the bank?"

While Cook's thinking on dividend seems different from that of Jobs, he also tried to assure investors that the company will remain committed to innovation and growth.

"We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You'll see more of all of these in the future," Cook on Monday said in a statement.

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