Component issues since April?
From Apple's 10-Q filing with the SEC (by way of MacCentral...):
[quote]As part of the 10-Q filing, Apple said that it's having some problems acquiring components from an unidentified Asian supplier. The company made a US$100 million prepayment to the supplier in April for components that Apple was to use in its manufacturing over the following nine months; Apple said that by the end of June, about $83 million of the deposit had remained unused. Apple admitted that the supplier's situation could put some of Apple's own deposit at risk, but there's a light at the end of the tunnel: their contract calls for Apple to be refunded the money at the end of January if it's not used.<hr></blockquote>
Wouldn't be CPUs, since IBM and Moto aren't Asian... probably not LCDs, since the iMacs seem to be fine... wouldn't be the current RAM, since all machines seem to be okay there...
My guess? DDR RAM... which would indicate a new mobo.
[quote]As part of the 10-Q filing, Apple said that it's having some problems acquiring components from an unidentified Asian supplier. The company made a US$100 million prepayment to the supplier in April for components that Apple was to use in its manufacturing over the following nine months; Apple said that by the end of June, about $83 million of the deposit had remained unused. Apple admitted that the supplier's situation could put some of Apple's own deposit at risk, but there's a light at the end of the tunnel: their contract calls for Apple to be refunded the money at the end of January if it's not used.<hr></blockquote>
Wouldn't be CPUs, since IBM and Moto aren't Asian... probably not LCDs, since the iMacs seem to be fine... wouldn't be the current RAM, since all machines seem to be okay there...
My guess? DDR RAM... which would indicate a new mobo.
Comments
<strong>Or it would indicate problems with the XServe, and, in fact, Apple has had problems fulfilling the first 4,000 orders.</strong><hr></blockquote>
Hadn't heard that, but it would make sense.
But... $17million for 4000 sets of RAM? Er...
<strong>
Hadn't heard that, but it would make sense.
But... $17million for 4000 sets of RAM? Er...</strong><hr></blockquote>
No, but $17 million for RAM for all servers over the next 9 months... enh, I suppose it's still a lot of money.
Hmm.
<strong>
No, but $17 million for RAM for all servers over the next 9 months... enh, I suppose it's still a lot of money.
Hmm.</strong><hr></blockquote>
Yup, and it was a total of *$100million*.
Only $17million had been spent *so far*.
So either there's about $4k of RAM in each XServe, or...
All paraphrased of course, but that whole section of the SEC filing is worst-possible-case explanations etc. 'Gosh, we have non-cancelable leases for our buildings for at _least_ five more years, and that will run us $500 million, so this is conceivably a potential liability if we switched to x86 and no one bought them for $50000 & we had to close plants by the dozens....'
My guess is the money went to Quanta, who (at least used to) construct the iMacs.
Check the full thing:<a href="http://www.edgar-online.com/bin/cobrand/finSys_main.asp?formfilename=0000912057-02-030796&x=19&y=7"; target="_blank">Edgar Online Apple SEC filing</a>
Nothing particularly worrying (like 200+ 'subcontractors' with names like EnronAAA, EnronAAB...) in there, though it's pretty clear that the pc market/world economy could use a little kick.
The rumored '2b missing' from Apple's filing was money moving from 'Cash + cash equivalents' to 'Short term investments', and there's a paragraph that basically says: accounting rule changes make us call this and that 'short term investments' now, though historically we've called it 'cash equivalent'.
<strong>I don't think anyone here is particularly worried about Apple losing the money (even if that is what the filing is about). The interesting thing is that someone who was supposed to be supplying lots of parts of some kind is not doing so, yet there doesn't appear to be any shortage of Apple's current hardware. One possible conclusion is that this missing component is holding up some future hardware. Either that or whoever it is is selling something like RAM for which Apple has plenty of alternative suppliers.</strong><hr></blockquote>
What I'm saying is the comments about 'potential problems' aren't stated that way in the filing. It doesn't say 'Supplier failing to produce' in there anywhere. Nor does it say 'component maker problems' If it's Quanta (who makes iMacs, yes?) they spent 17 million in April, May and June building iMacs. Six months left -> somewhat more money left over than predicted. (Though it's not specified that they expected to spend at a perfectly constant rate.)
Oh, here:
Â*Â*Â*Â*Â*Â*Â*Â*"In AprilÂ*2002, the Company made a $100Â*million prepayment to an Asian supplier for the purchase of components over the following nine months. In return for this deposit, the supplier agreed to supply the Company with a specified level of components in the three consecutive fiscal quarters ending DecemberÂ*28, 2002. If the supplier fails to supply the agreed upon level of components in any of those three fiscal quarters, the Company may cancel the arrangement and receive the amount of the prepayment not utilized plus a penalty. Approximately $83Â*million of this deposit remained unused as of JuneÂ*29, 2002, and is reflected in the condensed consolidated balance sheets in other current assets. The amount of the prepayment not utilized by the Company on or before DecemberÂ*31, 2002, is refundable to the Company by JanuaryÂ*31, 2003."
Note the _IF_ at the start of the third sentence.
It's being reported as if that _IF_ does not appear & this is a serious component problem. The last line does _NOT_ read 'Because we consider them delinquient, the return of the remaining $83 is expected in Q4 along with the sizable penalty, which you see reported on line XXXYYY.'
It's also possible to say that 83 million is greater than 2/3 of the original 100, yet three months have gone by... That still doesn't say 'component shortage' so much as 'we haven't asked for them to produce at full speed'. Or perhaps there was a ramp-up period. We aren't privy to the actual plan.
This is just a stock statement 'We gave them money, and we hope they don't steal it/go bankrupt/whatever, so we marked it in the 'asset' column, not the 'unforseen losses' column.'
<strong>Don't tell anyone but I heard a rumor that the supplier in question is "Kim Kap Sol Plastics Manufactory Limited".
muhaha.... LOL!!!!!! nice hit, tonton...
<strong>
The rumored '2b missing' from Apple's filing was money moving from 'Cash + cash equivalents' to 'Short term investments', and there's a paragraph that basically says: accounting rule changes make us call this and that 'short term investments' now, though historically we've called it 'cash equivalent'.</strong><hr></blockquote>
Are you saying it's confirmed that $2B were converted from cash to short term investments?
<strong>
Are you saying it's confirmed that $2B were converted from cash to short term investments?</strong><hr></blockquote>
Noooooooo... the $2B was in 'cash equivalent'.
Certain easily liquidable investments are considered 'cash equivalent' in accounting procedures.
Recent scandals have tightened the procedures, so that companies are reporting them as 'short term investments'.
Nothing has actually changed but how they are reported.
The $2B was not cash to begin with.
<strong>
Noooooooo... the $2B was in 'cash equivalent'.
Certain easily liquidable investments are considered 'cash equivalent' in accounting procedures.
Recent scandals have tightened the procedures, so that companies are reporting them as 'short term investments'.
Nothing has actually changed but how they are reported.
The $2B was not cash to begin with.</strong><hr></blockquote>
Okay, I understand now - thank you for the clarification.