Apple ensuring supplies with $11 billion in purchase commitments
Apple has upped their previous $7.9 billion in purchasing commitments to a whopping $11 billion.
That’s a 39 percent increase and a record for the March quarter. Why the sudden uptick? Two reasons, most likely: The tight supply environment caused by recent calamities in Japan and the expected increases in iPad shipments.
Apple COO, Tim Cook previously said they were selling every iPad 2 they could make, comments echoed in previous conference calls about the original iPad and iPhone 4 as well. Analysts have asked Apple why they still can't meet demand for their most popular products. These extra billions should go a long way towards answering that.
What it will mean for competing manufacturers and products and that don't have Apple's cash and economies of scale is uncertain. They can probably match price but can't match margin at those prices, further increasing Apple's profit lead and ability to make pre-payments such as these.
With close to $70 billion in the bank, Apple's probably just begun to lock in supply deals.
Any bets on whether or not they can make enough iPad 2s this quarter?