Lost in the pomp and circumstance of the unveiling of the newest iDevices lies a rather surprising fact: Apple (NASDAQ:AAPL) is a strong income play. That's impressive, considering that Apple only reinstituted its dividend two years ago after abandoning payouts in 1995. Steve Jobs, after returning to the company in 1997, never reinstituted the dividend even after Apple overcame the turbulence leading to CEO Gil Amelio's ouster.

Tim Cook became CEO after Jobs announced his resignation due to health-related issues. Cook quickly moved to make Apple a more shareholder-friendly company, especially in terms of its dividend. Cook enacted a split-adjusted quarterly payout of $0.054 per share. Within two years that figure has increased to $0.067, good for an annualized growth rate of 11.4%. Here are two things income investors need to know about Apple's dividend going forward.

Future increases might be difficult, although Apple is flush with cash
Many investors are familiar with Apple's huge cash pile, which stood at nearly $165 billion as of the last fiscal quarter. With all that money, it seems as if Apple could easily increase a dividend payout that totaled $11 billion over the last 12 months. However, this total is misleading when it comes to dividends, which Apple must pay with domestic cash; that number was only $17 billion before the company's $12 billion debt issuance in April.

Of course, Apple can repatriate as much of its cash anytime it wants. That, however, would incur the marginal tax rate of 35%. In the meantime, the company has used the debt markets to add to its domestic cash and take advantage of historically low rates. In the short term that's fine, but it isn't a long-term fix for returning cash to shareholders.

Dividends aren't even the most impressive way Apple's returning cash
There's no doubt that Apple has become more shareholder-friendly under Cook. In addition to its dividend, the company is returning cash through its massive share repurchase program. The chart below offers proper context:

Source: Apple's 10-Ks. All figures are in millions. Left Y-axis denotes dollar figures and right Y-axis are shares outstanding.

Since establishing its dividend in its fiscal fourth quarter of 2012, Apple has returned nearly $72.2 billion to shareholders. However, the majority of that has been through share repurchases rather than dividend payments. Spending over $50 billion has lowered Apple's basic weighted average shares outstanding by nearly 8.5% on a split-adjusted basis, from 6.6 billion shares outstanding to slightly over 6 billion. Dividends during that period came in at $21.3 billion; that's impressive, but lowering the share count nearly 10% in less than two years is outstanding.

Stock buybacks help income investors in two distinct ways. First, by retiring shares, the company can raise its per-share dividend payouts faster than its overall cash outlay because fewer shares are outstanding. That's also true for earnings; a company that is retiring shares can grow its earnings per share quicker than net income.

And that is what Apple has done: On a split-adjusted basis, the company increased its net income 12.3% last quarter on a year-over-year basis, and increased EPS by 20.6% due to fewer shares outstanding.

Final thoughts
Many rightly consider Apple a growth stock. However, lost in the talk of Apple's growth opportunities is its tremendous income potential. Tim Cook is focused on returning capital to shareholders through both dividends and share repurchases. And while the company faces modest difficulties in regards to cash repatriation, Apple has been through far worse in its journey to become the largest company in the U.S.

Jamal Carnette has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.