Neil HughesThe half-billion dollar investment came early on in the September quarter, so it was not officially revealed in Tuesday's Q3 results. However, Apple COO Tim Cook and CFO Peter Oppenheimer discussed the purchase during the earnings conference call.
"We view flash as a very key component for us," Cook said, "because as you know we use it so many of our products."
As Cook pointed out during Tuesday's conference call, Apple products make up a significant portion of the flash memory devices on the market today, including the iPhone, iPod touch, iPod nano and iPod shuffle.
In 2005, Apple paid $1.25 billion in advance to Hynix, Intel, Micron, Samsung Electronics and Toshiba to secure the supply of NAND flash memory. The previous long-term supply agreement runs through 2010.
Details were not made available on Tuesday's conference call as to the terms of the new agreement with Toshiba.
During the earnings call, Cook was asked whether the company would do any other long-term deals with suppliers. The COO said there are currently no plans on the table, but that he wouldn't "close that door."
"We are always open to doing additional deals," he said, "with the right terms and conditions."
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31 Comments
That's a lot of money gone......in a flash.
A lot of companies are so hamstrung with debt and limited access to additional credit that they can barely run their business much less being able to take advantage of opportunities. Apple is pretty much unaffected by the current credit crunch. Their cash hoard is definitely a competitive advantage.
Now if only other business and individuals could just learn that lesson and not just survive from one loan to the next...
I totally forgot they invested that much, but it makes sense to secure the necessary supplies. I think it helps the bean counters too, so they know the cost of supplies without worrying about how the market for those supplies shift. It probably helps the supplier a lot too to be able to plan at least some of the production ahead of time.
We can't really speculate too much as to if the flash is for a new product. It makes sense to me that they would pre-pay for the higher capacity flash for devices like the 64Gb iPod Touch and next year's 64Gb iPhone. Maybe the Mac Net(book) too.