“What’s often left out in this discussion on Apple’s supposedly idle cash hoard is the fact that Apple actually has been spending a lot of money — just not in the areas that people have been paying attention to,” Sterling Wong reports for Minyanville.
“Apple has actually spent some $21.1 billion on capital investment — or the purchase of manufacturing machinery and equipment — since the introduction of the iPhone, including some $8 billion in 2012,” Wong reports. “At a January earnings call, UBS Securities analyst Steven Mulunovich even noted that Apple ‘spent almost as much as Intel does.’ Asymco’s Horace Dediu quipped that though Apple doesn’t do high-profile acquisitions, it in effect ‘buys the equivalent of one Yahoo every three years.'”
Wong reports, “For the current fiscal year, Apple has even upped its capital expenditure spending to $10 billion. But where exactly is the money going? … As Dediu noted, Apple’s sky-high level of capital spending is ‘unusual for Apple’s competitors in phones, PCs or tablets [like Amazon, Google or Microsoft. It’s on a level matched only by semiconductor heavyweights’ like Intel and TSMC… Is the company spending on a planned transition from aluminum to Liquidmetal? Or is it new fuel cell technology?
Read more in the full article here.
[Thanks to MacDailyNews Reader “Jersey-Trader” for the heads up.]
Related article:
Adam Lashinsky: What Apple’s earnings really mean, and what’s that $9 billion in ‘equipment’ for? – January 24, 2013
Or I suppose it could be on vending machines for the new corporate donut. The point being that those 2 guesses are but pisses in the wind.
This isn’t pissing in the wind. It’s a theory based on facts and logic.
Since 1998, Apple has tried to differentiate itself in both hardware and software. The iPhone is characteristic of this attitude, as evident in the higher cost of build materials from the iPhone 4 on up.
And for fuel cells, Apple got approval to have laptops with fuel cells aboard airplanes.
“This isn’t pissing in the wind. It’s a theory based on facts and logic.”
It’s both
Perhaps the vending machines are made out of Liquidmetal and powered by fuel cells.
Liquid metal tooling machines…
Previous $21 billion was spend of equipment for few display manufacturers, as well as drilling machines for Pegatron, and other subcontractors.
Apple owns equipment that is used by most of its subcontractors; this gives them both technological advantage and the lowest prices.
This years $10 billion versus last year’s $8 billion makes no indication that it has anything to do with LM (too pricey, alas). Besides, specifically for LM the equipment would be founding/casting/moulding, rather than tooling.
Those “data centers” are a big part of Apple’s future. We know that the facilities exist, and where they are located, but we don’t know what’s inside. They may not be data centers, but “AI centers” for whatever Siri becomes ten years from now.
Another likely extension for Apple is into “personal robotics.” Things like Liquidmetal and fuel cells are just new materials and components. Not that interesting, in the big picture, and probably NOT where most of that mystery cash was spent.
Correct along with their new Campus and Stores and Remodel Jobs as well ……
Nah those data centers are just full of servers with random 1s & 0s. They will do nothing but blink and beep a lot, according to the idiots that say Apple can’t innovate anymore.
Apple disclosed only 5 of their data centers because they could not be hidden.
• The first old on in CA
• the billion dollar data center in Maiden, NC w/ largest solar panel and fuel cell system (not needed there)
• another one now running in Nevada
• one in Prineville, Oregon
• another in Hong Kong
Apple is developing solar panel and fuel cell technology with patents for the server farms in undisclosed locations around the world without stable power. Know one is looking for these. Why?
Note: You can’t stream data that isn’t stored somewhere. Also, small countries without the resources of the United States may want to set up their own PRISM facility in their country. Apple can help them with that too!
It has been reported on numerous occasions that Apple buys much of the manufacturing equipment used in its supplier’s factories. That would account for the high spend level.
The reason for this is less clear. But I can speculate.
Perhaps there is some IP in how the equipment is configured and used and they don’t want their suppliers to use the equipment to manufacture competitors products. Apple may also want the flexibility to move the equipment to a different supplier should they manage to negotiate a better deal elsewhere.
That’s a very good, and interesting, point (including your speculation).
great points
in addition Cook mentioned Apple purchased about 15 companies recently
What if Apple had a mini manufacturing clean room where they could fabricate prototypes as designed? Where they could experiment with the manufacturing process itself? Where they could try out tweak after tweak on reference designs before they finalize them? Where they could manufacture completely off the wall devices to understand and experience ideas and visions in functional and three-dimensional manifestations.
These are capabilities that few if any companies have at their disposal and would help to ensure that the products they actually bring to market would be truly unique.
In fact, I would be surprised if Apple were not investing in these types of bleeding-edge capabilities.
They do have that.
Cubert is right, Jony Ives has a bat cave where he does in fact produce prototypes – aluminium also
Yes, he has machines that can turn aluminum into aluminium.
Wall Street continues to say Apple smartphones are outdated designs, therefore Apple’s spending on expensive, special machines are a waste of money as far as Wall Street is concerned. I just hope consumers continue to appreciate Apple product build quality. I just hope Apple knows what is doing. Apple’s stock is continuing to struggle while the money is flowing like water in the rest of the market.
And of course, as many of us continually point out, all Wall Street wants is Apple’s MONEY.
Truth is a meaningless term on Wall Street. 👿
Troll Alert,
“Politically I call myself a ‘Positive Anarchist’ in that I believe in maximum choice. But I also believe in maximum responsibility for our choices, therefore being positive as opposed to irresponsible or negative.” – Derek Currie
http://mac-security.blogspot.ca
Membership here / members logged-in do not have any more credibility over anyone else posting anonymously.
These abusive individuals are no more genuine or trust worthy with their comments or posts then the rest of us. They are no more factusal or righteous either. We all have a choice and we all have the freedom to express your own opinions – that is the nature of this blog.
If another person disagrees with you, there should be no punishment or insults deserving to you. There should be no negative remarks or name calling. There should be respect no matter what.
Unlike, Derek who feel it is his god given duty to weed out those he feels are trolls. Simply based on his own judgement or choice to disagree, with remarks that are inflammatory, extraneous, or off-topic and by which he admits his intent is to provoke others with an emotional response or of otherwise disrupting normal on-topic discussion. That contradicts his own definition of himself.
His words and actions and his believes tend to be rather warped. If he can not respect others and their posts without responding in a kind and well mannered way… he only degrades himself to the level of troll. And not that of one who polices other trolls.
Sorry for the interruption.
Thank you for reading.
Troll Alert, you are getting to be annoying. Stop posting duplicates. Thanks for reading this.
it’s a miracle, I gave Melvin five stars.
See? Feed the trolls and this is what happens. 😆 😆 😆
.nosrep ekaf a sa ytilibiderc orez evah uoY .ekil uoy lla llorT .lla ti syas “drawoc suomynonA” 😯
Zakaj Vprašanje “Glej”? Ali ste prepričani o sebi?
MDN please filer out duplicated copy-paste posts that cross post the exact same thing across multiple boards. Thanks.
This is it! “Soon we will our have sharks with frickin’ laser beams attached to their heads”
Gotta throw of Samsung/Google spies that read stuff here.
They bought the Panama Canal. Who else could afford to widen it? Good margins.
Death ray, hollow volcano and a Persian cat.
Apple: Motivated to keep its secrets away from its fake, parasitic ‘competitors’.
Real competitors with Apple are ALWAYS welcome!
Real competition with Apple would be welcomed.
However, not one company has been able to deliver because they are incapable of any thinking differently.
The computer market was flooded with laptops netbooks and towers… Apple took a gamble by focusing its energy on the cellphone industry. That spin, put the world on edge. Yet, Apple then exposes it’s real intention, with iPad, an assault on the netbooks sector. Using the well tested solution and lessons learnt from iPhone; Apple unleashes it’s master plan. Surprisingly, iPad was so successful that its presence in the market actually effected the entire pc industry beyond its initially project – to challenge the netbooks. And engulfed the entire industry with one product. Perhaps a fluke? But if so, it’s a fluke still going strong.
I don’t consider Blackberry (Rim) or Metro (Windows 8) honest or real competitors at all. Why, simply that the resulting products are imitations. These imitations generally look and function pretty much as Apples. A competitor would not walk in the foot steps of a leader, it would gamble it’s energies in a totally different approach. After iPad, Microsoft should have though of a project like Google Glass as a competing product to iPhone or iPad. Something that radically expresses innovations in user experiences and emerging technologies – not a clone. Samsung should have saw Siri AI before Apple and offered a phone with out a touch screen. Gambling on change and calculated trust in technologies that go beyond where Apple was at the time of iPhone. But no, they took the easy way out. “If you can’t beat them join them – copy.”
As for secrecy, I think that is a given, why would any company with a real big idea, pave the road of enlightenment for any other company to share in? That just goes against the principles of doing anything in the business world.
Would IBM freely expose every step they are taking with ‘Watson’? Hey, guys, we are having some troubles with the programming, but so far, look what it can do, yeah, its not packaged nicely either, our apologies, but, well we just wanted to let the world see what we are up to. Please feel free to comment or better yet, rob us with our eyes wide open. Of course not, secrecy is most important as some products never ripen to ever get the chance to pick. And other ideas, might need years for technical advancements and materials top allow mass production to occur.
It sure isn’t going toward any updates to iWork. IWork ’09 give me a break. The interest they earn in a day could cover it
Buy Office for Mac and quit yer winning.
That’s what we did.
But when I state that Office for the Mac is the best office suite available, an unusual number of people here, absent of facts or data, claim it can’t be so.
iWork needs about a decade of enhancements in order to replicate the power of Excel or Word, and Cook can’t seem to be bothered to do ANYTHING to serve professional Mac users. If I was Apple, I would have purchased Wolfram years ago and integrated it into the best mathematical/scientific/presentation/graphic suite imaginable. Apparently Cook can’t seem to find the cash.
In order of bending over backwards to serve, this is Cook’s list:
1) Wall Street
2) his private bank account (presumably located in Ireland or an even lower-taxed island)
3) Apple headquarters largesse
4) iOS users
.
.
.
25) Apple employees
.
.
.
100) Foxconn employees
.
.
.
150) Mac OS power users
151) educational customers
152) enterprise users
153) Mac users outside of 1st-world capital cities.
Sorry, folks, but Apple is all grown up and acting like just another arrogant corporation. Stop pretending that Cook gives a care about offering us the best possible computing experience. Apple hasn’t substantially or fundamentally improved its OSes, hardware, or applications for at least 2 years; for some product lines, close to 5 years.
Proof? There is a single green light on the MacRumors Buyers’ Guide. It’s for a de-contented iPod Touch. The report reads, “Teardown of New 16 GB iPod Touch Reveals Few Internal Changes”.
The WWDC had better blow us away, because if not, linux or hackintoshes will very likely be in our future.
Mike totally on the money. As for the 16 gb iPod touch. I was thinking. What better place to test the screen size debate for the iPhone (besides a choice of iPhones) than to test with a bigger touch. But no. That would be to easy. There is a ton of competition these days cook seems to miss that entirely. He better reveal something mind blowing. Like Final Cut Pro 8.
I agree mostly with your post.
Thanks Mike for share your viewpoints.
That is what this blog is about.
Free thoughts, opinions, either side, better understandings.
I am starting to think, Tim really was meant to be the mediator, that Steve Jobs couldn’t decide on Johny or Scott as CEO so took the middle ground for the short term.
Tim Cook has promised many things but nothing to date has been as he said would be, “Mind Blowing”, not yet anyways.
WWDC is under a lot of pressure from every side and yes, it better blow us all away because Apple really is lacking it’s luster.
Good point. I wonder if this isn’t some handshake agreement with Microsoft in order to allow it to be compatible with office products. Just don’t make it too good.
Troll Alert,
“Politically I call myself a ‘Positive Anarchist’ in that I believe in maximum choice. But I also believe in maximum responsibility for our choices, therefore being positive as opposed to irresponsible or negative.” – Derek Currie
http://mac-security.blogspot.ca
Membership here / members logged-in do not have any more credibility over anyone else posting anonymously.
These abusive individuals are no more genuine or trust worthy with their comments or posts then the rest of us. They are no more factusal or righteous either. We all have a choice and we all have the freedom to express your own opinions – that is the nature of this blog.
If another person disagrees with you, there should be no punishment or insults deserving to you. There should be no negative remarks or name calling. There should be respect no matter what.
Unlike, Derek who feel it is his god given duty to weed out those he feels are trolls. Simply based on his own judgement or choice to disagree, with remarks that are inflammatory, extraneous, or off-topic and by which he admits his intent is to provoke others with an emotional response or of otherwise disrupting normal on-topic discussion. That contradicts his own definition of himself.
His words and actions and his believes tend to be rather warped. If he can not respect others and their posts without responding in a kind and well mannered way… he only degrades himself to the level of troll. And not that of one who polices other trolls.
Sorry for the interruption.
Thank you for reading.
Quit it, TA. Just quit it. Take your crusade against DK elsewhere.
I think the problem with FF&E expenditures is that it gets dated fast… You may feel less likely to obsolete your own products because you want to keep makimg money off of the expensive equipment you’ve bought, etc.
There’s a balance. I wonder how much more spending on this is being done under Cook compared to Jobs.
We have seen a couple moves by Apple to push manufacturing of products to a level that is either too expensive or too difficult to duplicate. While this has resulted, in some cases, of product availability problems (iPhone5) it has seemed to stop the almost exact duplication of apple’s products by others – particularly the iPhone5 and the iPad mini.
I would guess that Apple is doubling down on advanced (and cool) manufacturing techniques to stretch out their design/build lead in order to go where nobody can follow.
I think it’s really exciting and can’t wait to see what comes out of all that capital investment.
It’s funny how Wall Street thinks higher-quality products are a waste of time. There’s always this Wall Street attitude of how consumers should settle for “just good enough” products. How building high-quality products only eats into profits. I want to see Apple go where other companies can’t follow but Wall Street believes any Apple product can be duplicated at lower costs where consumers won’t be able to tell the difference.
I don’t know how discerning consumers are in general. Are consumers just as happy to have a product of lesser quality just so they don’t have to pay as much? Maybe they don’t mind if a product breaks, so they can buy a new one every so often. I don’t think in those terms but maybe most consumers are. I’d rather have a costlier, solid product and keep it for a long time than have some cheaper new products with all the latest features. I’m totally biased towards Apple products because I’ve owned so many of them since the first Mac 128 and they’ve always lasted me for years relatively free of problems.
It’s too bad Apple is spending all that money and still can’t manage to move the share price higher. Every time Amazon spends money on something, the share price gets a nice pop. With Apple, it’s just the opposite.
It is spending on technology and equipment to secure the future smooth roll outs of new products.
$5 billion and counting on the world’s most inconveniently shaped office building.