At Apple's conference for the presentation of financial results, Tim Cook, the company's COO and Steve Jobs' replacement, said that 3.9 billion dollars from Apple's reserve will be used to sign contracts for components intended for Apple products. The company has a monetary reserve of almost 60 billion dollars, the reserve based on which Apple shareholders recently commented saying that it should be divided into dividends and paid to the shareholders. Apple took note of this attitude and it seems that you will invest less than 10% of the reserve in concluding contracts similar to the one in 2005 that guaranteed them flash memories for the iDevices we use today.
Apple had very big problems with the delivery of iPad tablets last summer due to the fact that LG could not produce enough LCD screens to meet the demand coming from the company. In December 2010 it was rumored that Apple together with Sharp and Toshiba would invest 1.2 billion dollars in an LCD factory, but none of the companies confirmed the information. Apple has lost quite a lot because of these problems with the production of LCDs and there is a chance that the company will invest in an LCD screen factory to have a constant flow of components around the launches.
At the beginning of the conference the other day, CFO Peter Oppenheimer stated that part of this 3.9 billion dollars has already gone to certain companies, more precisely 650 million dollars have already been paid in December and he estimates that in the first part of this year another 1.05 billion dollars will be paid. Nobody knows exactly where Apple will invest this money, but it would be more than extraordinary if we didn't have to wait a month to buy an iPhone or an iPad tablet.
"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 prepayment 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."
