Slate throws Apple a $100B idea, suggests iBank

In an interesting -- not to say wildly speculative -- essay, Slate Magazine's Karim Bardeesy says that Apple should take some of its $28 billion and start a bank.

During Wednesday's conference call, Apple CFO Peter Oppenheimer made it clear that the company was looking to keep its cash right where it is. Anecdotal evidence suggests that now might not exactly be the best time to get one's feet wet in high finance, but Bardeesy does make a few interesting points.

First, if Apple takes $15 billion of its own cash, at "regulated reserve ratios," Apple could offer $100 billion in loans. Couple that with the company's tech savvy and trustworthy brand, Bardeesy says, and you're looking at an opportunity to "revolutionize the industry."

Second, Bardeesy suggests creating an internet-only bank, taking deposits from everyday people -- via an iPhone fund transfer app, of course. He says the rise of Internet banks isn't unprecedented: just look at how popular they were in Iceland! (Ignore for now those banks' participation in the total collapse of Iceland's banking system.)

And how about a slice of that sweet, sweet government bailout? Apple can have some -- if it's a bank. "Goodie side benefits to banking status include access to some of that TARP money and a steady revenue stream to smooth out any bumps in retail demand for other Apple products," he writes. Contradictorily, in his final sentence, Bardeesy chides the banking industry for "pocketing taxpayer billions while sending nary a penny [his] way." You can't have it both ways, buddy.

In sum, Bardeesy admits that "Apple has prided itself on sticking to its knitting and not indulging in diversionary acquisitions or enterprises." He claims, however, that "an exception can be made when economy and country are at stake and profits are on the table."

Can it? Really?

Thanks to everyone who sent this in.

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Source: http://www.thebigmoney.com/articles/saga/2009/01/21/core-com…

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Odds and ends Apple Financial

In an interesting -- not to say wildly speculative -- essay, Slate Magazine's Karim Bardeesy says that Apple should take some of its $28...

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mike

Funny, except, who the F is taking out loans in a down Economy. Did this guy graduate college? You take out a loan to expand the business (hence, obsession with interest rates). No one is growing businesses (esp. small businesses) these days.

Apple is a CE company. Banks? What? No.

Lastly, why the F would NEW bank get bailout money? They wouldn't. Sweet!

Slate is pretty cool, but this guy's a clown.

January 26 2009 at 9:14 AM Report abuse Permalink rate up rate down Reply

James Z

Suuuure.
Side benefits! Like taking our money from the bail out!

Then they make products with our money and we go and buy them. With more of our own money!

Yeah huge big back lash for Apple there.

January 24 2009 at 2:42 PM Report abuse Permalink rate up rate down Reply

aaron

Great idea. That worked out really well for Ford.

January 24 2009 at 11:49 AM Report abuse Permalink rate up rate down Reply

Matt

We'd have another copyright war on our hands. Apple Bank is a local bank with branches here in NYC. Though technically I think it's called Apple Bank for Savings.

January 23 2009 at 11:11 PM Report abuse Permalink rate up rate down Reply

Chris

This is why writers/journalists should never offer suggestions. They have no clue how the real world works.

January 23 2009 at 7:34 PM Report abuse Permalink rate up rate down Reply

Norbert

I love that bank idea. Paying with your iPhone is the next big thing. Apple will rule the world... but then Apple should build a bank store where everyone can set up his own bank.
Imagine - you could even build your own currency. There would be thousands of currencies around: green money, ethical money, religious money, corporate money, gold based money, local money, speculative money. Each currency with its own rules how to get it and how to spend it.

January 23 2009 at 6:24 PM Report abuse Permalink rate up rate down Reply

Michael

Does anyone remember when Apple *did* offer loans? I wouldn't call it a good move to go back to that system, it didn't seem to work.

January 23 2009 at 5:23 PM Report abuse Permalink rate up rate down Reply

Alva Elver

Fools! 'iBank' already exists!

http://www.iggsoftware.com/ibank/

January 23 2009 at 3:32 PM Report abuse Permalink rate up rate down Reply

SubGenius

I like the idea of Apple offering financing for its computers.

January 23 2009 at 3:29 PM Report abuse Permalink rate up rate down Reply

glad

I hope the Slate writer Karim Bardeesy wasn't getting paid for such a dumb idea or I guess he was just kidding around, right? What next Microsoft to set up it's own chain of coffee shops with free wifi and doughnuts! Obviously this guy does not follow the economy (look at GM's venture into financial services). it's lame and how come Warren Buffet hasn't set up his own bank or maybe a few of those Texan billionaires?

Let Apple keep its cash pile where it is safely under the bed as times will get tougher and they may need to dig into it. Apple is a great example of how a good business should be run, good margins, big cash pile and NO DEBT, unlike many of the businesses who are going to the wall as they have NO cashpile, low margins and too much debt.

January 23 2009 at 3:26 PM Report abuse Permalink rate up rate down Reply