• Your favorite

    Apple

    ,

    iPhone

    ,

    iPad

    ,

    iOS

    ,
    Jailbreak
    , and
    Cydia
    site.
  • What's Apple Spending $4 Billion On?


    During the earnings call yesterday, Apple Chief Financial Officer Peter Oppenheimer and current Chief Operating Officer Tim Cook both mentioned that the company had sealed $3.9 billion US worth of contract deals ensuring that they would have access to components over the next two years. Though Cook kept the details of the deals secret because it is "something I don't want our competition knowing," he said it was "focused in an area that we feel is very strategic," and compared it to Apple's earlier decision to pre-purchase a billion dollars of RAM. Some observers are speculating that the deal is for components related to the anticipated Retina Display for iPad 2.

    In 2005, with the iPhone and iPad still on the drawing boards, Apple paid $1.25 billion to Hynix, Intel, Micron, Samsung and Toshiba to guarantee supplies of NAND flash memory through 2010. As a result, Apple was able to push out millions of iPhones, iPods and iPads even through frequent supply shortages. Cook compared this new prepayment to that deal, saying "We think that was an absolutely fantastic use of Apple's cash," and the company "constantly look[s] for more of these." In one acknowledgement that may provide a hint, he said that "in the past several quarters, we've identified another area and come to recent agreements."

    Oppenheimer said in his remarks that Apple paid out $650 million under its agreements for this mystery part this past quarter, and that the company is planning to spend another $1.05 billion in payments next quarter. The industry has been buzzing with rumors of deals with Toshiba and Sharp, which are both LCD vendors. Oppenheimer noted that the prepayments were for "these payments consist of both prepayments and capital for processes and tooling," which would be consistent with a new high-res screen - something that Apple could legitimately call a "Retina Display" - in a 9.6-inch form factor. With the supply of flash memory guaranteed, and rumors of high resolution displays leading the list of expected announcements for the iPad 2, it's not unreasonable to think that Apple may have gone a long way towards cornering the market for LCD components.

    Source: AppleInsider
    This article was originally published in forum thread: What's Apple Spending $4 Billion On? started by Paul Daniel Ash View original post
    Comments 23 Comments
    1. hoekapika's Avatar
      hoekapika -
      cool
    1. krosis's Avatar
      krosis -
      Since some people are firm in their belief that a double resolution display is impossible, I ask what other things could it be?

      They said they expected DRAM prices to drop due to excess supply.

      They had a flash deal, and even if it's done, flash memory prices have been artificially high the last year, and are expected to halve by the end of 2011.

      The SoC industry and the nature of licensed chip IP along with several designers and manufacturers doesn't lead to a situation like this.

      The case? The camera? The glass? None of these seem like difficult to obtain items that would require a 4B investment and process retooling.

      What other expensive components that go into Apple devices could it possibly be but a display?
    1. Zeropoint00's Avatar
      Zeropoint00 -
      Steve Jobs is going to be cryogenically frozen next to Walt Disney until they find a cure for cancer....that's worth 4 billion....
    1. krosis's Avatar
      krosis -
      Quote Originally Posted by Zeropoint00 View Post
      Steve Jobs is going to be cryogenically frozen next to Walt Disney until they find a cure for cancer....that's worth 4 billion....
      You really think he wants to have to wake up, and come back to an Apple that's been running for years without his leadership AGAIN?
    1. RICO_'s Avatar
      RICO_ -
      Quote Originally Posted by hoekapika View Post
      cool
      Really? One word responses like this are a rough equivalent of a "first" comment. Did u even read the article?
    1. feidhlim1986's Avatar
      feidhlim1986 -
      Quote Originally Posted by RICO_ View Post
      Really? One word responses like this are a rough equivalent of a "first" comment. Did u even read the article?
      And responses pointing out one word comments are far more useless.

      The $4Bn is probably to secure components for iPad 2 and iPhone 5 to ensure supply can meet demand.
    1. Zeropoint00's Avatar
      Zeropoint00 -
      Quote Originally Posted by krosis View Post
      You really think he wants to have to wake up, and come back to an Apple that's been running for years without his leadership AGAIN?
      Sure why not? He did it once and made the company huge. Why not do it again just for fun?
    1. MOJO5873's Avatar
      MOJO5873 -
      Quote Originally Posted by Zeropoint00 View Post
      Steve Jobs is going to be cryogenically frozen next to Walt Disney until they find a cure for cancer....that's worth 4 billion....
      Lol. That makes sense.
    1. jvoni's Avatar
      jvoni -
      Quote Originally Posted by krosis View Post
      Since some people are firm in their belief that a double resolution display is impossible, I ask what other things could it be?

      They said they expected DRAM prices to drop due to excess supply.

      They had a flash deal, and even if it's done, flash memory prices have been artificially high the last year, and are expected to halve by the end of 2011.

      The SoC industry and the nature of licensed chip IP along with several designers and manufacturers doesn't lead to a situation like this.

      The case? The camera? The glass? None of these seem like difficult to obtain items that would require a 4B investment and process retooling.

      What other expensive components that go into Apple devices could it possibly be but a display?
      What about power supply? New battery type? Aside from the display, battery life is one of the most important components, short battery life means unhappy users, long battery life means a leg up on the competition!
    1. dread0g's Avatar
      dread0g -
      Apple is making steve a robotic body! they'll call it iRobot! it going to be there biggest hit yet! Lol!
    1. RICO_'s Avatar
      RICO_ -
      Quote Originally Posted by feidhlim1986 View Post
      And responses pointing out one word comments are far more useless.

      The $4Bn is probably to secure components for iPad 2 and iPhone 5 to ensure supply can meet demand.
      Somebody has to do it.

      And responses pointing out the response pointing out one-word comments followed by a blatantly obvious and half-hearted attempt at a relevant post are even more useless. :-D

      Hey how about we wait and see what the money was spent on instead of throwing out speculation and guesses which tend to be wrong more often than right.
    1. Snozberries's Avatar
      Snozberries -
      My guess is the new battery scenario. I vaguely remember a past post about the batteries powering the Inl' space station and how apple might want to incorporate that type into it's future devices. the funny part is that we won't know what the purchase was for another 3-5 years!
      Good Job(s)!!
    1. Lombardo Joe's Avatar
      Lombardo Joe -
      I'll take a better battery! But even if you throw $4b around... The technology for a solid battery to power something like an A4 device isn't really even around yet.
    1. stellan0r's Avatar
      stellan0r -
      Quote Originally Posted by Snozberries View Post
      My guess is the new battery scenario. I vaguely remember a past post about the batteries powering the Inl' space station and how apple might want to incorporate that type into it's future devices. the funny part is that we won't know what the purchase was for another 3-5 years!
      Good Job(s)!!
      You probably mean the nickel-hydrogen batteries that are used. I would guess something like that, maybe just more modern. Like the miniature fuel-cells (that don't need a recharge for quite a while) scientists are working on for quite some time. An exclusive deal for a new long-lasting high-power solution would be worth $4bn.
    1. krosis's Avatar
      krosis -
      I don't think it's a new power supply circuit (those are already pretty good), but new battery technology is an interesting thought.

      Although to be honest, Apple mobile hardware has been at the leading edge of the battery race for quite a few years. Is that something that even needs an upgrade? I suppose if they could take out weight while maintaining capacity it would be an improvement, but Lithium batteries are already towards the front when it comes to power/weight ratio.

      If they made an investment to put them ahead of their competitors, shouldn't it be in an area where they are slipping behind?
    1. EskimoRuler's Avatar
      EskimoRuler -
      I'm sure about the battery improvements, like the post above me, that's not something that they are behind on, they're leading it. The screen would be another area that would need improvement for the iPad and macs, but I think the Mac screens are amazing right now.
    1. whereswaldo's Avatar
      whereswaldo -
      I think you answered your own question in the second paragraph
    1. awesomeSlayer's Avatar
      awesomeSlayer -
      The iPad 2 is having some major improvement.
    1. feidhlim1986's Avatar
      feidhlim1986 -
      Maybe it's the electricity bill for the huge datacenter Apple built
      Or buying a stock of 3D displays for iPods and iPhones
    1. jaxx8028's Avatar
      jaxx8028 -
      Quote Originally Posted by krosis View Post
      You really think he wants to have to wake up, and come back to an Apple that's been running for years without his leadership AGAIN?
      all i have to say is...Illuminati (pay close attention to the picture)