Asymco: The new age of Capital Intensity

“Given the patterns over the last six years, it might be possible to classify a company’s core business by just looking at its CapEx: The services group showing growth but relatively stable patterns and the components group showing more volatility, macroeconomic sensitivity and an overall higher level of spending, especially as a percent of sales,” Horace Dediu writes for Asymco. “The question that pops up then is in what category does Apple fall?”

“My observations for over a year have been that Apple has been increasing its capital spending to such a degree that it is neither fish nor fowl,” Dediu writes. “It operates data centers but presumably does not operate fabrication plants. And yet it spends more than Intel and Google combined.”

Dediu writes, “In its fiscal year 2012 Apple spent about $10 billion while during the same time frame Samsung spent nearly $22 billion. However, Apple has begun to bump against Samsung’s spending level on a quarterly basis. I consider this extraordinary evidence of an extraordinary shift in strategy.”

Much more in the full article – highly recommeneded – here.

[Thanks to MacDailyNews Readers “Fred Mertz” and “Dan K.” for the heads up.]


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