Apple commits $3.9 billion to secret long term component contracts

13

Comments

  • Reply 41 of 70
    palegolaspalegolas Posts: 1,339member
    Quote:
    Originally Posted by josephwinters View Post


    uhm, question...



    I thought carbon fiber was very unfriendly when it comes to recyclability, renewability, and carbon footprint...



    I think all the carbon fiber patents are quite dated from the apple labs... perhaps something they were considering prior to adopting aluminum across the lineup...therefore probably shouldnt be taken into consideration..



    Looks like carbon fiber is pretty recyclable.

    http://en.m.wikipedia.org/wiki/Carbo...edirected=true

    I think it can crack though on high impact, not like metals that kinda bends, or liquid metal that kinda bounces/ absorbs.



    However this investment I have a feeling is based on existing technology, as he was mentioning flash storage as an example. HD displays seems like a safe bet, since Apple needs this, and there'll be hot demand from the whole industry for these. Other parts tha are are specific to Apple, A4 processor and apple batteries and such are already safe.

    The day when a new generation of batteries goes into production, like fuel cells and what not, then I expect Apple might consider prepaying for that as well.
  • Reply 42 of 70
    Quote:
    Originally Posted by Lochias View Post


    It's just you. The number ($3.9 billion) is in the title and in the first sentence of the story. The number was spoken by CFO Peter Oppenheimer:



    During the September and December quarters, we executed long-term supply agreements with three vendors through which we expect to spend a total of approximately $3.9 billion in inventory component prepayments and capital expenditures over a two-year period.



    We made approximately $650 million in payments under these agreements in the December quarter, and anticipate making $1.05 billion in payments in the March quarter.



    Thank you for posting this.



    Please do not expect AI commenters to actually use their brains. Sadly, many of us apparently do not.
  • Reply 43 of 70
    melgrossmelgross Posts: 33,238member
    Quote:
    Originally Posted by MacRulez View Post


    Rare earth.



    Hmmm! The earth I'm standing on is pretty rare. After all it's the only earth I'm standing on when I'm standing on it.
  • Reply 44 of 70
    celcocelco Posts: 211member
    Rare Earth is a smart thought but something tells me its more complex than that...
  • Reply 45 of 70
    "From our point of view on design side, we design components where we believe we can innovate beyond the market." Gives example of A4 - they helped design/tweak it, got someone else to manufacture it.



    But seems the deal is more akin to their Flash deal: "we've historically entered into agreements with others to supply; largest one was with flash memory suppliers? because flash would become increasingly import across product line and industry."



    "In the past several quarters, we've identified another area and come to recent agreements."

    Describes deal as "similar to flash agreement, focused in an area that we feel is very strategic,"



    so - multi-vendor deal on a specific area. Doesn't that rule out deals for components created primarily from one provider (e.g. a Qualcomm dual band chip, or an A5 chip fabbed by Samsung?)



    Seeing as Apple has been known to have penned deals recently with display manufacturers, seems to tally.



    So help in manufacture levels of iPhone 5, iPad 2 with no real change to the screen tech (focus on say NFC for iPhone 5). Then double pixel density for iPad 3.

    Sure would be nice if they could have it for iPad 2 though. Using retina display just lifts your expectations of screen quality and resolution.





    Something I haven't seen anyone ask - what if iPad2 was current resolution, but could output at 2x resolution? That it could store, playback 1080p at 720p, but could output 1080p at 1080p?

    WHy go to the hassle of having such a souped up A5 chip? 4x the speed, but it's only going to be incrementally used, so iPhone 4's can run iOS 5.x also?
  • Reply 46 of 70
    wizard69wizard69 Posts: 13,377member
    First off not all the money is going to one place. A good portion is a long term investment though.



    In what you ask. Easy, the next generation of ARM based SoC beyond the coming 32nm chips we should see in iPad 2. Some of you may have noticed the recent announcement by ARM and IBM that they will be working together to bring ARM products to new process nodes all the way down to 14nm. This after a successful move to 32nm.



    Now I hear you saying yeah but Apple buys from Samsung. That is true but Samsung is part of the same alliance that ARM and IBM are in. My guess is that a billion or so will go to Samsung to build a next generation plant most likely targeting 22nm. This however is most likely two years down the road so we will be dealing with 32nm SoC for the next two years.



    This is much like the arraingement with LG inked sometime ago. We are just now seeing the results of that deal. One of the reasons I think we might actually see a 2X increase in display resolution is do directly to this deal. The current iPad screen is nothing special, LG could of had something similar in stock if it wasn't for the aspect ratio. the meat and potatoes from this deal has yet to be served.



    Any ways that is my take. The money will be sent in many directions with Samsung getting a good portion to get to 22nm real fast.
  • Reply 47 of 70
    Quote:
    Originally Posted by cameronj View Post


    Securing them is the key. I'd bet it's the high res LCDs that the iP4 and the iPad2 use.



    Maybe if they're really smart ...



    Now let me see ... Highest rated tech company, $60bn in the bank, sales of $26bn, profits of $6bn



    ... you know, and I might be sticking my neck out here, but I think perhaps that they are really smart.
  • Reply 48 of 70
    Quote:
    Originally Posted by wizard69 View Post


    First off not all the money is going to one place. A good portion is a long term investment though.



    In terms of not to one area, or not to one company?

    Doesn't the phrasing suggest it's one specific area, but it'll be spread out between companies that can help with R&D then make what they want?

    Wouldn't CPU / SoC deals already be in place and be multiyear - ie the deals for A4 design and fab probably also cover A5 at least. Screen fab is a rate limiting step for Apple it seems in producing iPhones, iPod Touchs (and probably also iPads).

    Not to limit it just to 3.5/10 inch screens - display companies could also be brought in for iMac/ACD sized screens, esp if Apple wanted to make a big old Apple TV (as opposed to ATV box). Why stop at 27/30"? Surely currently they don't go bigger, due to fabrication issues - they absorbed a hell of a lot of cost for the iMac 27" screen display. Which might be a point towards favoring them doing the same for iPad 2/3 doubled resolution "retina display" level screen. Perhaps
  • Reply 49 of 70
    That's what I'd put my money on.

    The SSDs in the Airs are small due to cost I'd think. Securing a bulk load not only secures a number of drives but allows the price to be pushed down meaning larger capacity drives can be used without increasing the RRP of a final product, say the 2011 Macbook Pro for instance
  • Reply 50 of 70
    I wonder if it could be solid state drives, ala the Macbook air?



    People generally seem to be raving about how fast the macbook air is too boot and run the Air normally shows us where Apple are taking the mac.



    E.g. using the aluminium body first debuted on the Air as did the lack of CD drive. Perhaps the next macs will also use SSD?



    Just a guess but it could make sense considering how expensive SSD's currently are. By investing in a dedicated production line, they could bring down the cost and secure supply. Also, they way they use SSD in the Air is not the same as normal SSD's, which normally are encased in one unit.



    We'll see...
  • Reply 51 of 70
    anonymouseanonymouse Posts: 6,677member
    Quote:
    Originally Posted by Celco View Post


    Rare Earth is a smart thought but something tells me its more complex than that...



    Yes, rare earth metals are important, but Apple doesn't use them directly, unlike components like flash memory. Also, simply paying money for them, unless you stockpile them outside of China, doesn't help much when the Chinese government decides to cut the supply, again. Possible, but more likely it's some sort of strategic component, and maybe one we don't even think much about today.
  • Reply 52 of 70
    djmikeodjmikeo Posts: 179member
    Apple is buying component that the competition "needs" in order to stay competitive with Apple. Aluminum, liquid metal, carbon fiber and such aren't those components because the competition can easily find inexpensive substitutions that the buyer is not concerned with. Most buyers are really knowledgeable about the difference between regular plastic and carbon fiber, so the advantage that Apple may have in that area would not prevent the competition from building a cheaper product.

    Now a battery that can provide 10+ hours of usage in a tablet, well that's hard for the competition to make, at any cost. THe new iPad2 may have even longer life and that is very important for commercial use. Currently, no one can compare with the current iPad, and Apple is not likely to let them catch up.

    The LCD would be another good example. Having a high resolution, 2048x1536 10" display is something else the competition would not be able to copy at a competitive price. As we've seen, the competition is barely able to match Apple's price using a 7" display compared to Apple's 10". Surely, low resolution 10" screens will start showing up, but when the buyer looks at the difference, the Apple advantage will be obvious.

    Lastly, as some of you have mentioned, having a world chip would provide a huge cost and marketing advantage. Not to mention if the chip was LTE as Apple is a forward thinking company.
  • Reply 53 of 70
    shaun, ukshaun, uk Posts: 1,050member
    Quote:
    Originally Posted by Lochias View Post


    It's just you. The number ($3.9 billion) is in the title and in the first sentence of the story. The number was spoken by CFO Peter Oppenheimer:



    During the September and December quarters, we executed long-term supply agreements with three vendors through which we expect to spend a total of approximately $3.9 billion in inventory component prepayments and capital expenditures over a two-year period.



    We made approximately $650 million in payments under these agreements in the December quarter, and anticipate making $1.05 billion in payments in the March quarter.



    Thanks for the post, that makes it much clearer.



    It's probably flash memory, displays and batteries as they represent the main product differentiators apart from the processor and OS. That way they can buy cheaper 128Gb flash drives together with the latest displays and battery technology ahead of the competition.
  • Reply 54 of 70
    desarcdesarc Posts: 642member
    LCD's, Flash Memory, Batteries, LiquidMetal, Dual mode GSM/CDMA chips, a controlling number of shares in MicroSoft, Unicorn Blood, Reality Distortion Fields, who knows... it's all speculation.
  • Reply 55 of 70
    I think Apple is funding the next generation of technology and fabrication in the fields of; batteries, super capacitors, photovoltaic displays and microprocessors. Apple would also need to fund the enabling technologies and equipment to mass produce and commercialize LiquidMetal in its products.
  • Reply 56 of 70
    Quote:
    Originally Posted by danielgomes View Post


    I wonder if it could be solid state drives, ala the Macbook air?



    People generally seem to be raving about how fast the macbook air is too boot and run the Air normally shows us where Apple are taking the mac.



    E.g. using the aluminium body first debuted on the Air as did the lack of CD drive. Perhaps the next macs will also use SSD?



    Just a guess but it could make sense considering how expensive SSD's currently are. By investing in a dedicated production line, they could bring down the cost and secure supply. Also, they way they use SSD in the Air is not the same as normal SSD's, which normally are encased in one unit.



    We'll see...



    I think you are right. SSD across all Macs, except for the Mac Pro. That could use a SSD for the OS + Apps, HDD for storage. I think the next revised product will be a MacMini with SSD. That, and the 'plastic' MacBook gets discontinued.



    And welcome to the forum.



    Cheers,

    Phil
  • Reply 57 of 70
    melgrossmelgross Posts: 33,238member
    Quote:
    Originally Posted by t0mat0 View Post


    "From our point of view on design side, we design components where we believe we can innovate beyond the market." Gives example of A4 - they helped design/tweak it, got someone else to manufacture it.



    But seems the deal is more akin to their Flash deal: "we've historically entered into agreements with others to supply; largest one was with flash memory suppliers? because flash would become increasingly import across product line and industry."



    "In the past several quarters, we've identified another area and come to recent agreements."

    Describes deal as "similar to flash agreement, focused in an area that we feel is very strategic,"



    so - multi-vendor deal on a specific area. Doesn't that rule out deals for components created primarily from one provider (e.g. a Qualcomm dual band chip, or an A5 chip fabbed by Samsung?)



    Seeing as Apple has been known to have penned deals recently with display manufacturers, seems to tally.



    So help in manufacture levels of iPhone 5, iPad 2 with no real change to the screen tech (focus on say NFC for iPhone 5). Then double pixel density for iPad 3.

    Sure would be nice if they could have it for iPad 2 though. Using retina display just lifts your expectations of screen quality and resolution.





    Something I haven't seen anyone ask - what if iPad2 was current resolution, but could output at 2x resolution? That it could store, playback 1080p at 720p, but could output 1080p at 1080p?

    WHy go to the hassle of having such a souped up A5 chip? 4x the speed, but it's only going to be incrementally used, so iPhone 4's can run iOS 5.x also?



    Some good points.
  • Reply 58 of 70
    penchantedpenchanted Posts: 1,070member
    Quote:
    Originally Posted by Shaun, UK View Post


    Thanks for the post, that makes it much clearer.



    It's probably flash memory, displays and batteries as they represent the main product differentiators apart from the processor and OS. That way they can buy cheaper 128Gb flash drives together with the latest displays and battery technology ahead of the competition.



    This was my first thought, especially because of the capex inclusion. Apple wants not only the best pricing but also guaranteed supply which is best assured with dedicated production lines.



    I also think there is money for further R&D included.



    I think Apple may be doing even more of these deals, most likely with Qualcomm and probably others - the whole Liquid Metal thing would take some investment for further implementation.
  • Reply 59 of 70
    melgrossmelgross Posts: 33,238member
    Here's something of interest. Two articles from the EETimes, a site I highly recommend to all here.



    http://www.eetimes.com/electronics-n...L_EETimesDaily



    Notice the article says for both logic and foundry operations. in other words, memory and cpu's.



    http://www.eetimes.com/electronics-n...L_EETimesDaily



    Apple is investing, as Cook said in manufacturing lines for production of product(s) for them. Hmmm! Where could this be?



    The link to the site home:



    http://www.eetimes.com/?cid=NL_EETimesDaily
  • Reply 60 of 70
    wizard69wizard69 Posts: 13,377member
    This is where I believe Samsungs long term goals lay: http://www.edn.com/article/512298-AR...p_to_14_nm.php. That is 14nm hardware. Of course there will be nodes in between. The question for us is will Apple push hard to skip 32 nm to move to 22nm. The performance and power usage considerations are huge and for the near future would allow for some incredible hand held devices.



    As a complete distraction one should look at all the job opening for engineers and technicians in up state NY. Either for Global Foundries or the ISDA.



    As to Samsung here is Ana talking away: http://www10.edacafe.com/video/Samsu...185/media.html. She has obviously mastered the art of answering questions without saying much. To highlight just now much this is breaking news here is another tidbit: http://www.voicesatsamsungsemiconduc...gy-forum-2011/ In any event consider dinning at http://www.edacafe.com/ if your hunger for process tech is strong. As far as Samsung it appears to have 32/28 nm ready to roll, thus my strong suspicion that Apple will deliver a new SoC that will likely more than double performance in a very similar power profile. some of the numbers I've seen for shrinks to these nodes are very impressive.



    Obviously considering Apples volume demands, it would not be uncommon for the companies to look at this transition as a partnership. Thus I would not be surprised at all to find out that Apple is throwing cash Samsungs way to secure capacity at this node and future nodes. I have a hard time believing that the entire 3.9 billion will go Samsungs way though. Previous release indicate that a few hundred million can take care of things like Flash and displays. In the end it is probably a safe way for Apple to secure production without building a fab itself.



    As to Samsung specific processes here is info form the horses mouth: http://www.samsung.com/us/business/c...r/foundry.html. Note the following:
    1. The 32/28 nm processes are ready to go!!! Or exactly "Samsung?s 32/28nm Processes for SoCs are Ready to Go". Note the obvious reference to SoCs.

    2. 20% Higher Performance

    3. 30% Lower Dynamic Power

    4. 50% Less Leakage Power



    What is very notable is that no matter where you look there is never ever a mention of Apple anywhere on these sites never. Apples secrecy mentality has yet to soften. In any event these numbers lead me to believe that iPad2 could be running dual core with both the GPU and the CPU in the next rev with only a minor increase in power which at the same time can be offset in other ways. Things are looking good.



    Quote:
    Originally Posted by melgross View Post


    Here's something of interest. Two articles from the EETimes, a site I highly recommend to all here.



    http://www.eetimes.com/electronics-n...L_EETimesDaily



    Notice the article says for both logic and foundry operations. in other words, memory and cpu's.



    http://www.eetimes.com/electronics-n...L_EETimesDaily



    Apple is investing, as Cook said in manufacturing lines for production of product(s) for them. Hmmm! Where could this be?



    The link to the site home:



    http://www.eetimes.com/?cid=NL_EETimesDaily



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