Everything is coming up roses for our favorite Mac maker these days. In this case, a rose by any other name is just a pile of cash.

Mac sales are at record levels. Market share is growing. iTunes dominates. iPod dominates. iPhone is stirring the competition. Profits are at record levels. And Apple’s stock price is nearing an all time high, and four times what Dell is worth.

The question burning a whole in my pocket is, what should Apple do with that $20-billion in the bank?

$20-billion is a lot of money, and most of it is hard-earned cash from iPod sales, software profits, Mac sales. It was just a decade or so ago that Apple was down to their last billion dollars.

Don’t look now, but Apple is swimming in cash, more than any other U.S. tech company other than Microsoft. The Windows maker doesn’t just swim in cash, they manufacture it.

What should Apple do with some of that $20-billion? The speculation has run rampant the past year. Some expected Apple to team with Google and buy some wireless bandwidth for future cell phones. That didn’t happen.

Others speculated that Apple’s new, and relatively cheap, acquisition of a $280-million chip designer meant that Apple would design their own CPUs. Apple’s Steve Jobs squelched that idea.

Of course, there’s the bi-monthly rumor that Apple will buy Adobe. Or, Sony. Or France. Or, open more stores.

What should our favorite Mac, iPod, iPhone, and software maker do with all that cash?

Microsoft seems intent to get into the online advertising space and compete with Google and Yahoo in search and ads, so far, unsuccessfully. Does Apple need to be in the online advertising space, or have its own search engine?

No. That’s not a core competency for Apple. It is for Google, relatively for Yahoo, but doesn’t appear to be a competent enterprise for Microsoft who continues to lose money on nearly every venture except Windows and Office.

$20-billion is a lot of money. Adobe’s stock is in the dumpers recently, pushing the market valuation down to about, oh, I’m sure it’s somewhere around, um, $20-billion, give or take a billion or two.

While that sounds plausible, Apple, should it decide to devour Adobe, would do so in a stock swap, not through a cash payout.

Some of that $20-billion or so in cash has come about because Apple doesn’t pay Steve Jobs very much money, especially considering what he has done to re-invigorate the company in recent years. Maybe they could give Steve a bonus or a raise.

That would still leave nearly $20-billion in the bank. What else?

Apple isn’t much for acquisitions, especially big ones. It’s not the company culture to devour and conquer. Or, is it conquer and devour.

Does Apple need the money to begin manufacturing their own Macs, iPods, and iPhones? Not likely. Apple’s far east manufacturers do incredible work and keep retail prices low enough that shoppers stand in line to buy Apple products, yet Apple makes margins that are the envy of the industry.

Apple is not likely to go after Yahoo! and no other software company comes with the same cache and chic as Adobe, tops in a very short list of potential acquisitions.

R & D. Research and development. Any increase in R & D would come out of current earnings, so it’s unlikely that Apple will double or triple research investment-- except for a new building or two… or three.

I keep coming back around to Adobe. They’re the graphic software king, and only Apple gives them a run for their money. Microsoft hasn’t made much of a dent in Adobe’s cash cow territory, either.

Between Apple buying Yahoo! or buying Adobe, I would go with where Apple’s strength lies-- software. Apple will buy Adobe (not for cash, though).

What’s on your shopping list for Apple? An acquisition? A new business venture? Or, just more of a stockpile of money?

Jobs hates debt. (Maybe he should run for President?) Tech companies are sensitive to burn rate and how fast cash can disappear. Maybe that’s why they fight paying out cash as dividends. As long as SJ is at the helm, I’d expect Apple to keep accumulating. There was a time where Jobs relented and chose to chase volume and market share over margins. Their cash cushion certainly would lend itself to tightening margins and lowering prices dramatically. Although the stock price could suffer short term. Absent dramatic price reductions, Apple is at least moving in the right direction (RAM upgrades on the latest iMacs are more in line with prices elsewhere).

The Adobe thing has certain appeal. Can you imagine holding that over MS’s head? You continue Office for Mac and we’ll continue Photoshop for Windows. As you indicated, however, buyouts are typically done using stock swaps. Interesting, but I doubt Jobs has much interest in their software.

There is a point where shareholders start demanding dividends. And tax law intervenes when cash hoards are excessive. Faced with that, Apple could certainly initiate a stock buyback plan and continue to look for investments in its future, such as chip designers, new technologies, and promising start-ups such as they did with Akami.

They could do all of this and still have a nice cushion. I imagine debt-free Apple will keep enough cash to weather any storm. Those 200+ stores around the U.S. and abroad could be a huge drain on cash if the economy takes a dramatic turn for the worse. Not long ago in the prior industry downturn, SJ said Apple would INNOVATE its way through. They certainly did and reaped the benefits. Today, they can continue to innovate and expand and take risks without putting Apple in peril.

Apple is showing remarkable discipline. Of course, great success in every product line may play a part in that. When the cash rolls in it’s easy to look successful and disciplined.

I read somewhere that Apple has been slow to move Blu-ray into Macs. I’m sure that’s by design. Blu-ray may be the last of the CD/DVD discs as movies and TV shows switch to online downloads. Guess who has the lion’s share of that market? Apple. They’re in no hurry to move Blu-ray along.

For big shopping, the only fish out there is Adobe, which could integrate into Apple quite well, and is an affordable acquisition. They won’t want Sony because Sony has troubles everywhere, and their media business would compete with Apple’s media customers.

I expect a lot of custom chip integration into future Apple products, Macs, iPods, and iPhones, and any other iDevice to further separate those product capabilities from competition. An integrated media chip would be nice.

Outside of Adobe who else is worth something AND affordable. Yahoo!  Where’s the synergy?

Apple won’t buy Yahoo as Apple has a deal with Google that acquiring Yahoo! might just upset Google.  I want them to design a minitower first.  I am sure they will acquire some company but I wouldn’t bet on Adobe.  My bet is they are saving it for their new campus that they want to build.