The right thing for a company like Apple to do with extra cash (other than dividends and buybacks) is to invest it. There's only so much innovation it can do as a single entity… but as a VC firm (à-la Google Ventures) or as an LP (into Sequoia, KPCB, etc.) or as diversified fund (à-la Berkshire Hathaway) it can drive more value for its shareholder and more innovation through investing capital. Note, this is pretty much what Apple is doing.