Apple shells out $3.9 billion to keep the spice flowing

It's good to be the king. Not content with raking in truckloads of cash and being among the world's highest-valued companies, Apple is now throwing its weight around to secure supply of display panels for the iPad and iPhone families... to the tune of $3.9 billion.

iSuppli reports Apple spent that much in long-term supply agreements with LG, Sharp, and Toshiba's display manufacturing arms. The $3.9 billion covers "inventory component prepayments and capital expenditures during a two-year period," and iSuppli reckons Apple may be providing cash the three companies "can use to invest in the production of IPS and LTPS LCD panels."

The market research firms adds that Apple is paying up to avoid shortages amid the fast-growing smartphone and slate markets. Explains iSuppli's Vinita Jakhanwal:

With sales of smart phones booming, and a flood of new entrants into the tablet market this year, competition among original equipment manufacturers (OEMs) for available supplies of high-end small and medium displays has reached a fever pitch, straining availability of critical types of displays. Because of this, Apple has moved to invest some its enormous cash reserve in securing the supply of advanced displays.

Enormous those cash reserves are. According to the Wall Street Journal, Apple has $50 billion in cash on hand. With that kind of money, the Mac maker seems to be in a unique position to sidestep component shortages—something its smaller competitors might be hard-pressed to do.

Tip: You can use the A/Z keys to walk threads.
View options

This discussion is now closed.