Apple component prepayments increase by $1.15 billion as new products loom

“With persistent rumors of a new iPhone, smaller iPad and new iPods set to launch soon, Apple saw its prepayment for inventory components increase by $1.15 billion sequentially in the June quarter,” Neil Hughes reports for AppleInsider.

“Apple’s increasing expenses were revealed in the company’s 10-Q filing and highlighted on Monday by analyst Maynard Um with Wells Fargo Securities,” Hughes reports. “Growing by $1.15 billion, prepayment for components reached 12.6 percent of Apple’s total sales, which he noted is the highest level seen by Apple in the last four years.”

Hughes reports, “Um said the growth in expenses is a strong sign that Apple is securing component supplies ahead of potentially multiple product launches. He noted that historically, Apple’s increases in inventory component prepayments have been followed by what Um called “a solid ramp-up in revenue” in the proceeding two or three quarters.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]

Related article:
Apple ‘iPhone 5′ and ‘iPad mini’ event planned for September 12, iPhone 5 release on September 21, say sources – July 30, 2012


  1. While Apple certainly concentrates on best possible pricing from suppliers, I am sure they are able to use pre-payments as a way to help obtain that pricing structure in addition to securing supply. Too many companies of their size would want not only best price but 120 day payment terms and with no commitment on volume. Think about how that all worked for automotive suppliers.

  2. *Apple shareholders did without dividends as their cash pilled up.
    *Apple now gets a better price and supply guarantees that others don’t because they afford to prepay.
    *Apple shareholders benefit in the long run.

    Steve had it right all along.

    1. A 2% dividend (especially when Apple was in the $300/400s) wouldn’t have changed a thing in regards to their ability to get the pricing and supply that they get. Think before you spout off nonsense.

  3. This is Tim Cook’s genius at work. Inventory and supply chain management. He was the best in the business when he worked for Compaq back in the day.

  4. “…prepayments have been followed by what Um called “a solid ramp-up in revenue” in the proceeding two or three quarters…”

    I think this tortured statement langusge sure must be referring to the next (or upcoming) quarters.

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