6 Things Apple Can Do With Its Cash Hoard

Apple now has a truly , and it's making investors edgy. The company apparently has $97.6 billion, leading TechCrunch to practically beg the firm to start buying back its own stock (a way to raise prices for other existing stock owners.)

The world's number-one electronics company doesn't play the market like that, though. It didn't get to number one by serving shareholder and Wall Street demands for short-term cash, so it's not going to fritter away its money on stock buybacks or dividends. Apple sees the cash hoard as a weapon to improve its long-term strategic position through targeted investment. Dividends aren't targeted.

The company also isn't set up to swallow large acquisitions. One of Apple's strengths is its unusual corporate culture, with a combination of a strict hierarchy and iron-walled silos. Apple can absorb smaller firms into the "Apple way," but to swallow something like Facebook would burn off a lot of energy on integration that could better be spent making stuff people will buy.

Apple got to number one, in part, by making smart bets on technologies and seeing them through in the long term. Apple's strategy is working. Let me repeat that: Apple does not want to radically change its strategy, because Apple's strategy is working. That said, here's how Apple could invest its cash and still stick to its own way of doing things.

Invest early in new technologies. There are a few areas where mobile devices still need radical change, and we've been seeing early versions of those technologies peek out at CES. Fuel cells, for instance, could be one solution to recharging batteries. Sunlight-readable screens would be a big boon for tablets. Various antenna companies are working on creating radio systems that could support a wide range of LTE bands, enabling Apple to make fewer versions of the iPhone for more markets. By snapping up and perfecting one of the core technology companies involved (Qualcomm's Mirasol unit, for instance, or Pixel Qi) over the next few years, Apple could leapfrog its competitors.

Corner a key component market. Apple has done this before, making a five-year bet on flash memory that paid off handsomely. Making big advance deals for hardware that its competitors want could let Apple sell its products cheaper than other firms, and could also put the squeeze on competitors' plans. Could Apple corner the market on hard drives when there's a shortage, for instance?

Develop exclusive manufacturing techniques. There's some speculation that Apple originally came up with a new iPhone 5 design, but had to scrap it because the world's factories couldn't build it. If Apple invests in pure manufacturing, patenting machine tooling systems that can create cases impossible by any other means, it'll have a radical industrial design that Samsung physically wouldn't be able to copy.

Invest in a new product line. Apple's supply-chain strategy includes exclusive, long-term contracts with multiple factories and parts suppliers. If Apple is really going to break into the TV market - and I'm not saying it will - then the company will look at its new product holistically, from the large LCD panels down to the wires connecting your mandatory cable set-top box. That would suggest secret investments or multi-year money commitments to a broad range of suppliers.

Sign content deals. The missing link in any Apple TV strategy is content. TV and movie studios, addicted to their monthly revenue from cable providers, have been very unwilling to offer a broad range of current content on streaming services that might lead users to cut their cable-TV cords. But everyone has a price. With $97 billion, Apple could make content providers a deal they couldn't refuse, disrupting the industry so that in the long term they're more dependent on Apple than on the cable firms for their viewership and revenue. Apple could then turn the screws on them further down the road.

Build the cloud. Jon Gruber at Daring Fireball, who I treat as a sort of unofficial Apple spokesperson since he's capable of explaining the company's motives when the PR team won't - says that "iCloud is as central to Apple's next 10 years as the digital hub strategy was to the previous 10 years." If that's true, there are some possibilities to invest cash to improve Apple's cloud position. Big data centers are a must, but what if Apple builds its own fiber backbone? Apple doesn't want to become an ISP directly to homes and businesses, but a move that would make its cloud speedier than competing Web services would set the company apart.