Apple Signs $3.9 Billion Supply Agreement

During a recent conference call with financial analysts, Apple COO Tim Cook said that they have secured a $3.9 Billion deal for long term SoC components for iOS devices. But when asked what the investment was for, Tim Cook didn’t say much.

What are you working on Apple?

During the conference call, which was transcribed by Macworld, he said "We've historically entered into certain agreements with different people to secure supply and other benefits. The largest one in the recent past has been, we signed a deal with several flash suppliers back in the end of 2005 that totaled over a billion dollars, because we anticipated that flash would become increasingly important across our entire product line and increasingly important to the industry. And so we wanted to secure supply for our company. We think that was an absolutely fantastic use of Apple's cash, and we constantly look for more of these. And so in the past several quarters, we've identified another area and come to some recent agreements that Peter talked about in his opening comments. These payments consist of both pre-payments and capital for process equipment and tooling. And similar to the flash agreement, they're focused in an area that we feel is very strategic. And so I'd prefer not to go into more detail about what specific area it's in, but it's the same kind of thinking that led us to those deals."

While Apple has been mum about the whole deal, we do know that the deal will involve some sort of technology which is not only innovative, but is also not in mass production as of today.

Published Date: Jan 20, 2011 11:04 am | Updated Date: Jan 20, 2011 11:04 am