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Thread: Apple Cash Helps iPhone Maker Dominate Electronics Supply Chain

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  1. #1
    MMi Staff Writer Michael Essany's Avatar
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    Default Apple Cash Helps iPhone Maker Dominate Electronics Supply Chain


    If you've ever seen the reality show "Hoarders," you can probably visualize how Apple has a very similar condition. But rather than clinging to useless possessions, Apple is known for hoarding its cash. Yet, when the opportunity presents itself, Apple's hoarding condition subsides and the "big spender" propensity takes hold.

    An interesting report from Bloomberg this week shows that Apple's massive cash reserves (which the company protects like a lion shielding her cubs from a predator), continues to give Apple a huge advantage over its competitors. How so? Apple is using its cash to exert substantial influence across the global electronics supply chain.

    One example of how Apple hoards its cash and then spends it like a drunken sailor (no offense to drunken sailors) to set back the competition is the story of how the little green light came to be next to the MacBook webcam. According to this week's report, this fixture represented a significant manufacturing headache that ultimately required Apple to purchase $250,000 laser machines to drill the miniscule holes through metal.

    What did Apple do? The company purchased “hundreds" of these machines and began to leave the market temporarily void of this important equipment. The same thing happened during the winter of 1998. According to the details presented in the Bloomberg report:

    To ensure that the company’s new, translucent blue iMacs would be widely available at Christmas the following year, Jobs paid $50 million to buy up all the available holiday air freight space, says John Martin, a logistics executive who worked with Jobs to arrange the flights. The move handicapped rivals such as Compaq that later wanted to book air transport.
    Apple's mild but savvy manipulation of supply chain electronics components has obviously worked very well for the company. What remains to be see, however, is if new Apple CEO Tim Cook will be just as savvy in this enterprise as Steve Jobs once was. During Apple's earnings call last month, Cook stated: "I’m not religious about holding cash or not holding it. I’m religious about a lot of things but not that one. We’ll continually ask ourselves what’s in Apple’s best interest. So it’s a topic for the board on an ongoing basis."

    Source: Bloomberg

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    iPhoneaholic s0ulp1xel's Avatar
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    iPhoneaholic truenorth's Avatar
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    Is it just the modmyi app I'm using to read the article, or is punctuation - specifically the apostrophe - really bad in this article? It should be "we'll", "I'm", "what's" and "it's".
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