What happens when you become so rich that you don't know what to do with your money? You got yourself a nice black Benz with a heated steering wheel. You travelled to New Zealand to view the spectacular coral reefs. You even got a house maid. Now what?
I'm drawing an analogy, of course, but the fictional scenario above is a rudimentary representation of where Apple finds itself now. The company has too much cash, which is lying around unproductively. The main job of a corporation is to provide value to its stockholders. This value comes mainly in the form of stock appreciation and dividends, the latter of which Apple has been slowly increasing. As a company's growth slows, it tends to invest less heavily into the business, and instead spews off dividends to investors.
Tech writers almost always recommend Apple spend its mountain of cash in the form of Research & Development and hiring, but this advice is lacking an understanding of what money can buy. Apple has classically spent less on R&D than competitors, but this has never stopped them from releasing the most popular and innovative products. Just like with anything, there is quantity and quality. Spending billions on R&D because you have billions to spend is not a winning strategy - it's unlikely to provide adequate returns in the form of revolutionary products and it won't provide investor's with the value they seek. This is not the pharmaceutical industry and Apple is no longer a growth stock (it is too big).
Many industry mavens also eagerly advise Apple to staff-up, especially now, since the latest iOS and OS X releases have been riddled with bugs. They seem to think that Apple possesses a machine that turns dollars into productive employees. I assure you, this is not the case, because if it were, Apple would be far richer than it is now. While I agree that Apple should hire more qualified employees (particularly in the App Store, Search, Maps, and iCloud teams), what Apple should do is not what Apple could do. Staffing up teams quickly is a recipe for disaster, especially at a company with such a unique culture as Apple. It can take months, if not years, for an employee to be assimilated into the company. Let's also not forget that this employee will also need to be trained by current employees, taking their productive time away from work. Fortunately, Apple seems to be trying to solve this problem. From what I've seen anecdotally on Twitter and the web, many top-notch individuals have been pouched to join Apple in the last few years, and particularly this year. It's worth pointing out though - we don't know how many have left Apple in the same period.
Apple has also significantly accelerated its massive stock buyback program in order to put its cash to productive use. Stock buybacks are a divisive thing; ask 10 investors if it's a good idea and you'll hear 100 opinions. Buybacks are extremely situational, and they might work for some companies while not for others. In the case of Apple, however, I think they are a good idea because those acquired shares can be redistributed to employees, old and new. It's notoriously hard to recruit great engineers in the valley, and no better incentive exists than cash and stock.
It's easy to write advice about what Apple should do with all of its cash, but it would be foolish to think that Apple is unaware about all these possibilities. At the same time, management myopia is defintely something Apple should steer clear of, as it was that thinking that turned BlackBerry into BlackBerry.