It is wonderful to see Apple investing money back to introudce more path breaking products. We eagerly await more innovative products from Apple.
Flash and Battery may be two main technology for thier investment.
For sure a deal like this would assure Apple 1) lowest costs 2) Assured supply in tight supply times and possibly 3) exclusive access to a new technology somewhere down the road but not necessarily in the 6-9 month timeframe
Both Flash & High Res display.
There are rumors on iPad2 coming with a 2048×1536 display. Existing state of the art for a 10" display is like 1280x800 which Moto is said to use on its upcoming Xoom tablet. So I guess, inorder to get the LCD vendors manufacture this kinda high res display , Apple put the money upfront for fab and pre-ordered all the output :)
Apple COO Tim Cook just finished a quarterly earnings call in which he said Apple has struck long term supplier agreements worth $3.9 billion over two years. The company already paid out $650m on the deal in the Dec. quarter and will pay another $1.05B in March. Cook said it was similar to Apple's 2005 flash deal but would not say if it was in flash, DRAM, LCD or what. The money is both pre-payment for components and used for process equipment and tooling. BTW Apple doesn't want to own or run a fab, he said. So what do you think they are buying? I bet its LCD.