Apple has announced a plan to start handing back some of its cash hoard of almost $100bn to shareholders.
The company is to pay its first dividend to shareholders since 1995, three years before Apple started its record breaking run of new releases, which began with the iMac in 1998.
Tim Cook, the firm's chief executive, said Apple would start paying a quarterly stock dividend of $2.65 a share beginning in July, and said Apple's board had authorised a $10bn share buyback.
It helped Apple shares close above $600 for the first time. They rose 2.7% in New York to $601.10, in the process helping the S&P 500 finish within 10% of its historic closing high reached in October 2007.
"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," said Cook. "Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program."
During a conference call on Monday, less than two weeks after the launch of the latest iPad, Cook was pressed about future releases.
Cook refused to be drawn, but said that the decision to pay money back to shareholders would not alter Apple's focus on innovation. "These decisions will not close any doors for us," he said.
Apple is now the most valuable company in the world, with a market capitalisation of close to $546bn. Only six firms have ever been worth more than $500bn: Apple, Cisco, Exxon Mobil, General Electric, Intel and Microsoft.
At the end of December the company had been sitting on cash, cash equivalents and short-term and long-term marketable securities worth about $97.6bn.
Speculation about a dividend and share buyback had been mounting for some time. Some analysts had feared this would be a turning point for Apple and that its years of massive growth may be coming to an end. In the quarter running up to Christmas, Apple more than doubled its profits from the same period the year before, as sales of iPhones and iPads continued to soar.
Initial reaction to the announcement was subdued, with Apple's share price rising just over 1.2% to $593.83 a share in morning trading.
Colin Gillis, an analyst at BGC Partners in New York, said the announcement was in line with expectations, but added that Apple now faced a period of intense competition as Amazon, Samsung and others looked to take market share in tablets.
Apple passed the $500bn mark at the end of February, and Gillis calculates that so far the six other firms to reach that mark have lasted 90 to 180 days above that level.
"The competition isn't going to roll over, and they'll compete on price," said Gillis. Apple has traditionally charged a premium for its products.
But other analysts said Apple's latest move would help it attract new shareholders more interested in gaining income from dividends. Stanley Wu, an analyst at Sterne Agee and Leach, said: "Long term, there are a great number of funds in the US that want yields, and this should help them expand their shareholder base."
He said it would put further pressure on Google to start paying a dividend.
