“According to a new report by Asymco this week, Apple is currently investing in both equipment (and machinery) at a rate which is considered particularly abnormal than what the company has done in this regard in the past,” Aaron reports for RazorianFly.
“Noting that by watching this trend he can effectively “assess approximately when and for which products [this] investment [is] allocated,” Asymco’s Horace Dediu highlights that Apple’s quarterly spend on PP&E by line time moving into the second quarter of this year appears to show exponential growth of the firm’s investments in machinery, equipment and internal-use software,” Aaron reports. “The question is: What is Apple investing so much in this production for? — The Apple television, new Macs, the next-generation iPhone, a “smaller” 7-inch iPad? …None of the above?”
“The sheer size of this reported investment could suggest the company is gearing up to launch a new class of product, just as it did with the introduction of the iPhone in 2007 and iPad in 2010,” Aaron writes. “That said, it’s totally plausible that such investment in production could also be needed for a revamp to the firm’s entire product line. In this case scenario, such a jump in investment would make a lot of sense.”
Read more in the full article here.
MacDailyNews Take: Something wicked this way comes.
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liquid metal everything?
A reanimated liquid metal Steve Jobs!
No brain science or rocket surgery needed to figure this out. Since the iPhone was introduced in 2007, and the iPad in 2010 1 thing has been clear: Apple is selling everything they produce. If they produce more, they can sell more.
With China opening up, along with many other markets, they need to produce more to meet the demand. Doesn’t matter if its more iPhones, iPads, iNewDevice, iNewProductClass, its all the same. They need more production capability to meet growing demand.
I know it makes sense for Apple to buy up any needed equipment to ensure they can meet production goals, but how much longer before they start building the plants to house it and begin manufacturing their own components?
On a whim I just bought Liquid Metal stock; it’s at $.26. Not a big risk. Last time I bought stock it was Apple at $39. Hope LQMT does as well.
You might want to think about selling that stock now:
This guy is a numbnut. The rate of investment in PPE by Apple is not “abnormal” if he read Dediu’s analysis. What’s unusual is that Apple is behind on its estimated PPE spend for this year.
“numbnut” if I was you I would go back to Asymco and read through his Apple analysis for the last few years – he’s the real deal and has cut a swathe through the empty, shilling anal-ysts, with critical faculty and spot-on projections for Apple and competing manufacturers.
It will make you more intelligent
“Noting that by watching this trend he can effectively “assess approximately when and for which products [this] investment [is] allocated,”
No, he cannot. All he can see is that Apple is gearing for SOMETHING- but he has NO clue what. More MacBooks? HDTVs? More iPads? iPhone 5? As I said, no clue. Move along people, nothing to see here…
What the hell is this:
highlights that Apple’s quarterly spend on PP&E by line time moving into the second quarter of this year appears to show exponential growth of the firm’s investments in machinery, equipment and internal-use software
What is “line time moving”?? And “exponential growth”: Does he even know what that means? Sounds like a lot of hyperbole to me…
Whatever it is, it’s making me smile.
Every quarter it is the same thing. “If we could have made more than we would have sold more.” Maybe Apple is addressing the problem.
It is not just about what Apple is making and selling now. Jonathan Ive stated that what Apple is about to release is what he feels is the most important exciting product to date.
Personally I hope they’re investing in some critical ability to achieve a particular trade dress, such that slavish copiers can’t get there from here.
But realistically, I think it’s more about controlling the entire process, both for practical reasons and to cut down on leaks.
There was a report recently (sorry, can’t find it) that apple was “helping” it’s manufacturers by doing the machinery/equipment purchases and related tasks to shift the risk of this considerable investment so as not to burden the manufacturers (who get stuck with outdated or non-modifiable equipment when products change). Apple has the resources to do this (and can use the depreciation tax advantages) and it will enable apple and the manufacturers to move more quickly when changes and new lines need to be brought on-line. Or, relocated to another country that doesn’t think it owns your trademarks (china-iPad).
Apple has for some time been hit by product shortages in the iPhone and iPad markets, particularly upon launches of a new model. New and more manufacturing equipment would make sense to alleviate this problem, plus, Apple now carries 3 different iPhone models and 2 iPad models. If Apple plans to move the iPhone 3GS into lower end markets and developing countries, it needs more equipment and also more production space for the new iPhone 5 if it maintains 3GS, 4, and 4S production (perhaps the 4 goes away).
The real question here is how quickly does Apple want to introduce new products into the world market at the same time, rather than the typical staggered rollouts of the U.S./Canada first, followed by Europe, Australia, Asia, etc. as has been done in the past.
The final answer may simply be China. If Apple is truly on the verge of a contract with China Mobile, then it may simply need nearly double the production capacity than it had before.
The Apple Thought Control device – finally.