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?

[Digital Daily]

Rene Ritchie
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Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.