With a thirty-year bond yield, Apple enters corporate adulthood

Take off the pullover and put on a suit and tie – you aren't a tech stock anymore.

Last week saw Apple turning a final corner in its long development as a company. It is no longer just a tech stock – it's now a boring old blue-chip.

During its quarterly earning earnings call, the company increased its dividend by 15 per cent (it will now pay $3.05 a share every quarter), boosted the size of its share buyback plan sixfold, to $60bn, and, most interestingly, announced a bond issue to pay for it all. The company now intends to return $100bn in total to its shareholders by the end of 2015.

Today, Apple filed its draft prospectus for the bond issue with the SEC, confirming the durations it will be borrowing for and the banks in charge. Goldman Sachs and Deutsche Bank will be jointly overseeing the issue, which is of sets of two floating rate notes, due in three and five years, and four fixed-rate notes, in durations of up to thirty years. That's barely shorter than the entire lifespan of the company to date, making the investment a real punt in the dark for anyone buying into it.

We don't yet know how much of each duration Apple is planning to borrow, nor – crucially – the rates they are offering. But the plan looks likely to have very little to do with the typical reasons for corporate borrowing: Apple still has an enormous pile of cash, which means that investment isn't the name of the game.

Instead, the company appears to be using its extraordinary creditworthiness – as well as the ultra-low bond yields which are a sign of our times – to overcome an issue it has with that cash pile: most of it is kept overseas.

The US only charges tax on cash which has been "repatriated", so while Apple leaves money from overseas operations overseas, it doesn't have to pay any tax on it. It's waiting – as it has been for years, now – for a "repatriation holiday", when it hopes a future government will temporarily lift that tax to encourage the companies to bring cash home. Until then, if it needs money domestically, borrowing is as good as any other method. And if its rates are low enough, it might even make a bit of money on the deal.

But with dividends, bond yields, and share buybacks, Apple has entered a new – and dull – stage in its corporate progression. These aren't the actions of a high-growth tech stock; they're those of a company bedding in for the long-haul. Apple expects to be here in thirty years, and still be largely the same when it is, and its asking investors to bank on that. Fun for them, but the white-knuckle days are over for us.

Apple CEO Tim Cook at a presentation for the company. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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The Prevent strategy needs a rethink, not a rebrand

A bad policy by any other name is still a bad policy.

Yesterday the Home Affairs Select Committee published its report on radicalization in the UK. While the focus of the coverage has been on its claim that social media companies like Facebook, Twitter and YouTube are “consciously failing” to combat the promotion of terrorism and extremism, it also reported on Prevent. The report rightly engages with criticism of Prevent, acknowledging how it has affected the Muslim community and calling for it to become more transparent:

“The concerns about Prevent amongst the communities most affected by it must be addressed. Otherwise it will continue to be viewed with suspicion by many, and by some as “toxic”… The government must be more transparent about what it is doing on the Prevent strategy, including by publicising its engagement activities, and providing updates on outcomes, through an easily accessible online portal.”

While this acknowledgement is good news, it is hard to see how real change will occur. As I have written previously, as Prevent has become more entrenched in British society, it has also become more secretive. For example, in August 2013, I lodged FOI requests to designated Prevent priority areas, asking for the most up-to-date Prevent funding information, including what projects received funding and details of any project engaging specifically with far-right extremism. I lodged almost identical requests between 2008 and 2009, all of which were successful. All but one of the 2013 requests were denied.

This denial is significant. Before the 2011 review, the Prevent strategy distributed money to help local authorities fight violent extremism and in doing so identified priority areas based solely on demographics. Any local authority with a Muslim population of at least five per cent was automatically given Prevent funding. The 2011 review pledged to end this. It further promised to expand Prevent to include far-right extremism and stop its use in community cohesion projects. Through these FOI requests I was trying to find out whether or not the 2011 pledges had been met. But with the blanket denial of information, I was left in the dark.

It is telling that the report’s concerns with Prevent are not new and have in fact been highlighted in several reports by the same Home Affairs Select Committee, as well as numerous reports by NGOs. But nothing has changed. In fact, the only change proposed by the report is to give Prevent a new name: Engage. But the problem was never the name. Prevent relies on the premise that terrorism and extremism are inherently connected with Islam, and until this is changed, it will continue to be at best counter-productive, and at worst, deeply discriminatory.

In his evidence to the committee, David Anderson, the independent ombudsman of terrorism legislation, has called for an independent review of the Prevent strategy. This would be a start. However, more is required. What is needed is a radical new approach to counter-terrorism and counter-extremism, one that targets all forms of extremism and that does not stigmatise or stereotype those affected.

Such an approach has been pioneered in the Danish town of Aarhus. Faced with increased numbers of youngsters leaving Aarhus for Syria, police officers made it clear that those who had travelled to Syria were welcome to come home, where they would receive help with going back to school, finding a place to live and whatever else was necessary for them to find their way back to Danish society.  Known as the ‘Aarhus model’, this approach focuses on inclusion, mentorship and non-criminalisation. It is the opposite of Prevent, which has from its very start framed British Muslims as a particularly deviant suspect community.

We need to change the narrative of counter-terrorism in the UK, but a narrative is not changed by a new title. Just as a rose by any other name would smell as sweet, a bad policy by any other name is still a bad policy. While the Home Affairs Select Committee concern about Prevent is welcomed, real action is needed. This will involve actually engaging with the Muslim community, listening to their concerns and not dismissing them as misunderstandings. It will require serious investigation of the damages caused by new Prevent statutory duty, something which the report does acknowledge as a concern.  Finally, real action on Prevent in particular, but extremism in general, will require developing a wide-ranging counter-extremism strategy that directly engages with far-right extremism. This has been notably absent from today’s report, even though far-right extremism is on the rise. After all, far-right extremists make up half of all counter-radicalization referrals in Yorkshire, and 30 per cent of the caseload in the east Midlands.

It will also require changing the way we think about those who are radicalized. The Aarhus model proves that such a change is possible. Radicalization is indeed a real problem, one imagines it will be even more so considering the country’s flagship counter-radicalization strategy remains problematic and ineffective. In the end, Prevent may be renamed a thousand times, but unless real effort is put in actually changing the strategy, it will remain toxic. 

Dr Maria Norris works at London School of Economics and Political Science. She tweets as @MariaWNorris.