>> if the company can create more value than shareholders, then removing cash from the company via a share buyback should reduce share price.

Since Apple is simply hoarding the cash, we've already ruled this out -- Apple themselves admits they do not have any way to deploy the cash that would produce more returns than just stashing it in a 0.07% interest bearing account. The question then just comes down to how they disburse the cash (keep vs buyback vs dividends)

OK so in specific case of apple story is complicated by the onshore/offshore tax situation, but it could well be that they have more cash than they know what to do with - in which case returning it to shareholders makes sense instead of using it badly. But it is really not an obvious statement that buying back shares actually returns any value to shareholders.

In my view you really should qualify your earlier statement that "Buy-backs are more tax efficient because they increase stock price" as it is really not a generally true statement. If it was, I would be in the business of buying companies, then making them use any free cash to buy back some shares from me (my remaining shares then somehow go up in value), then selling the remainder back to the market. Free money, it would be great!

How about: Buy-backs are more tax efficient because they result in a higher stock price than an equivalently sized dividend.