In a long-winded bit about components and the future during Apple's earnings call, Apple COO (and acting head honcho) Tim Cook talked about how, in 2005, they invested a lot in securing agreements and pre-payments for tons of flash memory—around $1 billion worth—because they thought it'd be important in the future. Well, he says, Apple's identified another area where they've started investing like they did with flash—agreements and pre-payments—where they feel they can innovate, but they're not ready to talk about what that area is. Iiiiiiinnnnterrrrresting.
Maybe crazy high-res displays? Hmm.
Update: Here's some exact quotes from the earnings call:
Tim Cook, CFO
On the operational side of the house, as you probably remember, we have historically entered into certain agreements with different people to secure supply and other benefits, and the largest one in the recent past is that we signed a deal with several flash suppliers at the end of 2005 that totalled over a billion dollars, because we anticipated that flash would become increasingly important across our entire product line and incredibly important to the entire industry, so we wanted to secure supply for the 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 have identified another area and come to some recent agreements that Peter talked about in his opening comments. These payments consist of both pre-pay and a capital for processing equipment and tooling and similar to the flash agreement. They're focused in an area that we believe is very strategic.
I prefer to not go into what spec area its in but its the same kind of thinking that lead us to both deals that lead us to the flash deal.
And here's what Peter Oppenheimer, CFO, said right before Tim:
During the September and December quarters, we executed long-term supply agreements with three vendors, for which we expect to spend a total of approximately $3.9 billion in inventory component pre-payment and capital expenditures over a two-year period. We made approximately $650 million in payments under these agreements in the December quarter, and anticipating paying $1.05 billion in payments in the March quarter.
Like I said, iiiiiinnnnnnnteresting. [Apple]