[tw04]

>Why Apple maintains a cash reserve?

Because the company would have gone bankrupt in the late 90s had Microsoft not given them a loan (and it's likely the only reason MS did so was because they were facing monopoly scrutiny). Jobs swore that would never happen again and made sure everyone on his executive staff and board of directors was on the same page.

https://www.businessinsider.com/how-steve-jobs-took-apple-fr...

[larkost]

That is a bit of a mis-statement. Apple was in trouble at that time, but it was not on the brink of a bankruptcy (despite the constant use of the word "beleaguered' by the press), and Microsoft's investment did not materially affect Apple's ability to continue. The investment was intended as a show of faith from Microsoft (and turned out to be a good investment).

The far more important part of that announcement was the commitment of Microsoft to continue development of Microsoft Office for the Mac. That was the single biggest symbol that Apple was going to continue. Without Office the Mac was likely doomed to an ever smaller nitch, and everyone knew it. That one commitment on Microsoft's part cemented the Macintosh's place as a big player, and kept Apple from dwindling to the point where bankruptcy would have been a real worry.

[watersb]

IIRC, Steve Jobs stated that Apple had only 90 days of operating capital at the time they did the deal with Microsoft.

[tw04]

It’s really not. Their financial results for FY97 was a loss of $1 billion. That was after posting a net loss of $816 million for FY96. At the time of the Microsoft stock purchase it was down to $1.2 billion in cash… you can do the math on their runway had Jobs not quickly turned things around.