Apple lays out $11 billion in purchase commitments
Many out there think Apple should go on an acquisition spree with its $65.8 billion in cash. Others think that Apple should issue a dividend to its shareholders. I tend to agree with the first line of thought (especially when it comes to buying patent portfolios), but at this moment in time, it's good that Apple has been sitting on all that cash on hand.
As All Things D points out, Apple has upped its purchase commitments an astounding 39 percent to $11 billion. The increase in purchase commitments will allow Apple to secure supply chain investments, such as critical components for the iPad 2 and future iPhones. Demand for hot components, like flash memory and touchscreens, has soared in recent years thanks to the glut of smartphones hitting the market. If any company wants to stay ahead, it needs to make sure that it can actually build any killer products that it comes up with.
This is where Apple's massive amount of cash comes in handy. When shortages do occur, such as what happened after the Japan tsunami, Apple doesn't have to mess around with securing loans to lock down components. As Tim Cook said at Apple's financial conference call last week, "The iPad has the mother of all backlogs, but we're working very hard to get [it] out to customers as quickly as we can." Having all that available cash on hand will enable Apple to keep up with demand where other, "poorer" tech companies may not be able to.
Subscribe to Newsletter
Software Updatesmore updates
- Apple Remote Desktop updated with Yosemite support
- OS X Yosemite 10.10.2, iOS 8.1.3 updates now available
- Sports Illustrated 120 SPORTS channel comes to Apple TV
- Logic Pro X update brings AirDrop support, new effects, tools, and more
- Parallels Access 2.5 released, adds file manager, computer-to-computer remote access
- The Google Translate iOS app is about to get a lot smarter