Horace Dediu of Asymco.com has done a detailed analysis of Apple's Capex and come to the conclusion that Apple is planning to double production of iOS devices in 2012.
OK, thanks for the link - great to see Asymco's analysis. However, I don't have a clue why he thinks production of iOS devices would require Apple to increase Capex. Duh, Apple doesn't manufacture anything themselves. How basic is that?
It looks to me more like purchase of lots of servers. Are those typically Capex? They only last a few years.
Apple will never build a foundry, their business model is to invest in machinery equipment operated by overseas partners like Foxxcon. Building their own fab goes against the way they have been doing business all these years and may be counter productive. That money is probably set aside for product expansion or some legal content negotiations.
OK, thanks for the link - great to see Asymco's analysis. However, I don't have a clue why he thinks production of iOS devices would require Apple to increase Capex. Duh, Apple doesn't manufacture anything themselves. How basic is that?
It looks to me more like purchase of lots of servers. Are those typically Capex? They only last a few years.
Apple profitably uses some of they huge cash mountain to finance and own a lot of the specialised machines and equipment used in producing Apple products. It reduces their outsourcees finance requirements and costs and therefore Apple's costs and it gives them ownership and control of the machines so the competition can't use them!
Yes, servers do count as Capex amortised over three years. If you read through the article and comments you will see that they discuss costs for servers but come to the conclusion that only a small part of the budget for machinery and equipment is for servers and that most of the budget is for manufacturing equipment and machines.
Naw. It has already been earmarked for thermonuclear war with Google.
That is, if you can believe what Steve has said. He has been lauded for saying one thing and doing another more than once by posters here.
The cost of the litigation in the IP thermonuclear war is petty cash for Apple but is going to be very, very expensive for robber baron Google and their hoard of copycat pirates.
My hope is that the solar farm will reap substantial cost savings over time. Substantial enough to impact Apple iCloud operating expenses. It can't only be about being greener
If so, another competitive advantage
i think apple's stock holders are perfectly content at the moment.
The investors speculate about Apples war chest of 80+ billion in their accounts, it's now being put to use by the company to expand its physical infrastructure. And to think they don't have to get loans or investors as joint collaborators for this expansion.
This is the way a good business is run.
Common sense says that if you make investments with the cash you have on hand, you will more easily handle the downside risks. Too many businesses now seem to be making investments with credit, and then needing a bailout when that investment fails.
That's why Apple's financial footing is rock-solid.
This building is actually an elaborate front for a large underground 'umbrella corporation' esque bunker city. Come December 20th 2012 all VIP's will relocate here before the apocalypse.
Apple profitably uses some of they huge cash mountain to finance and own a lot of the specialised machines and equipment used in producing Apple products. It reduces their outsourcees finance requirements and costs and therefore Apple's costs and it gives them ownership and control of the machines so the competition can't use them!
Wow, I knew Apple's financing of suppliers' equipment was unusual, but I never imagined that Apple actually OWNED all that equipment sitting in some supplier's factory!
In fact, I still find it hard to believe. That is kind of like owning the engine in your employee's car, as a way to help him get to work. And when you fire the employee you have to take the engine out. And the engine weighs many tons. And there are dozens or hundreds of them. And they are somewhere in China. And possession is 9/10 of the law. Etc etc.
I believe that Apple probably financed the equipment as part of an contract/agreement for exclusive Apple-related utilization. Despite what he says, I don't think Apple actually owns it.
Comments
Horace Dediu of Asymco.com has done a detailed analysis of Apple's Capex and come to the conclusion that Apple is planning to double production of iOS devices in 2012.
http://www.asymco.com/2011/10/27/the...s-ios-volumes/
OK, thanks for the link - great to see Asymco's analysis. However, I don't have a clue why he thinks production of iOS devices would require Apple to increase Capex. Duh, Apple doesn't manufacture anything themselves. How basic is that?
It looks to me more like purchase of lots of servers. Are those typically Capex? They only last a few years.
OK, thanks for the link - great to see Asymco's analysis. However, I don't have a clue why he thinks production of iOS devices would require Apple to increase Capex. Duh, Apple doesn't manufacture anything themselves. How basic is that?
It looks to me more like purchase of lots of servers. Are those typically Capex? They only last a few years.
Apple profitably uses some of they huge cash mountain to finance and own a lot of the specialised machines and equipment used in producing Apple products. It reduces their outsourcees finance requirements and costs and therefore Apple's costs and it gives them ownership and control of the machines so the competition can't use them!
Yes, servers do count as Capex amortised over three years. If you read through the article and comments you will see that they discuss costs for servers but come to the conclusion that only a small part of the budget for machinery and equipment is for servers and that most of the budget is for manufacturing equipment and machines.
That money is probably set aside for product expansion or some legal content negotiations.
Naw. It has already been earmarked for thermonuclear war with Google.
That is, if you can believe what Steve has said. He has been lauded for saying one thing and doing another more than once by posters here.
Naw. It has already been earmarked for thermonuclear war with Google.
That is, if you can believe what Steve has said. He has been lauded for saying one thing and doing another more than once by posters here.
The cost of the litigation in the IP thermonuclear war is petty cash for Apple but is going to be very, very expensive for robber baron Google and their hoard of copycat pirates.
Let all the pirates walk the plank
My hope is that the solar farm will reap substantial cost savings over time. Substantial enough to impact Apple iCloud operating expenses. It can't only be about being greener
If so, another competitive advantage
i think apple's stock holders are perfectly content at the moment.
The investors speculate about Apples war chest of 80+ billion in their accounts, it's now being put to use by the company to expand its physical infrastructure. And to think they don't have to get loans or investors as joint collaborators for this expansion.
This is the way a good business is run.
Common sense says that if you make investments with the cash you have on hand, you will more easily handle the downside risks. Too many businesses now seem to be making investments with credit, and then needing a bailout when that investment fails.
That's why Apple's financial footing is rock-solid.
Apple profitably uses some of they huge cash mountain to finance and own a lot of the specialised machines and equipment used in producing Apple products. It reduces their outsourcees finance requirements and costs and therefore Apple's costs and it gives them ownership and control of the machines so the competition can't use them!
Wow, I knew Apple's financing of suppliers' equipment was unusual, but I never imagined that Apple actually OWNED all that equipment sitting in some supplier's factory!
In fact, I still find it hard to believe. That is kind of like owning the engine in your employee's car, as a way to help him get to work. And when you fire the employee you have to take the engine out. And the engine weighs many tons. And there are dozens or hundreds of them. And they are somewhere in China. And possession is 9/10 of the law. Etc etc.
I believe that Apple probably financed the equipment as part of an contract/agreement for exclusive Apple-related utilization. Despite what he says, I don't think Apple actually owns it.