In order to see why Apple doesn't need $178 billion of cash for its business, it is crucial to examine how Apple operates and thinks about products.

Apple has a functional organizational structure, not one based on product groups or some other type of hierarchy. That makes it easy for the company to shift attention to new products as needed. Despite having 46,000 non-retail Apple employees, Apple is a nimble company able to respond to changing market dynamics quickly and efficiently. Apple's strengths include allowing ideas to be born from close collaboration at a very early stage and offering an environment that fosters the nurturing of fragile ideas through the development process. Many larger companies are simply unable to capture this type of "start-up" mentality. For Apple, large scale M&A with a significant capital footprint does not fit too well in such a structure.

Neil Cybart spent the past seven years as a Wall Street stock analyst focused on financial companies and recently transitioned to writing about technology in general and Apple in specific. He brings with his writings all the knowledge and experience he gained as a analyst, and that lets him contemplate both Apple's current product lines as well as where the company might go in the future. In this edition of the iMore Experts column, he looks at Apple's cash reserve and how they can best put it use.

As Apple's cash levels have continued to increase, pundits have been quick to suggest that Apple buy large companies simply because it has the cash to do so. Typically, suggestions regarding what Apple should buy relate to the topic of the month. When AT&T was struggling to keep up with iPhone usage on its network, it was suggested that Apple buy a wireless service provider. As mobile apps and new social networks took off, it was said that Apple should buy the hottest social network or messaging platform at the time. Now, with rumors swirling around Apple getting into transportation, people are saying that Apple should buy Tesla for $30-$40 billion. Most of these suggestions fail to understand basic principles on which Apple operates and instead, rely on metrics such as revenues or monthly user data.

Even though large M&A is likely off the table, Apple remains an active acquirer of smaller companies. The strategy is clear: buy technology (and people) to fill holes in the current product line and roadmap. Said another way, buy companies that strengthen the value proposition of Apple products (both announced and not announced), without jeopardizing the culture. Over the past three years, Apple has purchased more than 35 companies. All of them were small and relatively easy to assimilate into Apple — including Beats, despite its large $3 billion price. Without a need for large M&A to chase future revenue growth, Tim Cook's comment about not needing all of Apple's cash becomes clear.

As long as Apple continues to return excess cash to shareholders, it is reasonable to assume that the process Apple has practiced to ship products over the past 15 years is still functioning. Jony Ive and his industrial design team will use their design process, honed over the past two decades, to solve real-world problems.

As we move out from the Apple Watch launch, Apple will once again be in a position to focus on new, industry-defining products. While there will likely be time gaps between these products, similar to the three years between iPhone and iPad, and the more usual five years between iPad and Apple Watch, it is fair to assume that Apple is already busy thinking about the next big thing.

We will likely see this planning process play out with Apple and the transportation industry. With rumors swirling that Apple is looking to design its own car, many have been quick to point to Apple's $178 billion of cash as a reason for Apple to simply buy an automaker.

In light of Apple's functional organization and design philosophy, however, it is much more realistic to see Apple accomplishing its goals in the automobile industry with much less cash — by investing in manufacturing and likely continuing to outsource, as is in the case with most of its gadgets.

Throughout the process, Apple will likely continue to shed as much excess cash as it can. If Apple's car plans don't end up materializing, the process will simply start over again as the pieces of the puzzle are already at Apple: culture, structure, motivation. Excess cash is not looked at as a motivator to sway away from core competencies.

Apple's business model and structure has enough flexibility to not only fund the largest buyback program in corporate history, but also sustain a business growing 20% a year. If Apple CFO Luca Maestri's biggest problem is having too much cash, no wonder he is considered the most admired CFO in America.