Apple Plans to Invest $10.5 billion in Supply Chain Technology
Apple has a new urgency for next year: it will invest a record $10.5 billion in machines and robots to fine tune the mass production of iDevices and other products. The spending goes for acquiring equipment “to polish the new iPhone 5c’s colourful plastic, laser and milling machines to carve the MacBook’s aluminum body, and testing gear for the iPhone and iPad camera lens,” according to people familiar with the company’s plans, speaking with Bloomberg.
To get a jump on rivals like Samsung Electronics Co. and lay the groundwork for new products, Apple is spending more on the machines that do the behind-the-scenes work of mass producing iPhones, iPads and other gadgets. That includes equipment to polish the new iPhone 5c’s colorful plastic, laser and milling machines to carve the MacBook’s aluminum body, and testing gear for the iPhone and iPad camera lens, said people with knowledge of the company’s manufacturing methods, who asked not to be identified because the process is private.
The sources reveal that Apple is after exclusive machinery deals. In fact, Apple can pretty much afford to secure cutting edge technology. With $10.5 billion projected to be spent on robotics and machinery, Apple will outspend the majority of its rivals, but will fall below Samsung’s $22 billion.
As the Bloomberg report highlights, the manufacturing process begins with Jony Ive and his industrial design team. After a product idea is born, the team develops large-scale methods for getting the products built.
Apple engineers often spend weeks at facilities in Asia making sure the parts and equipment they buy or make are working properly, people familiar with the work said. The company has hired robotics experts and its website has several job openings for engineers who can operate high-end manufacturing equipment.
We don’t have to go too far back in time to see that Apple is ready to shell out money for getting access to the latest technology: the company recently signed an agreement with GT Advanced to build a facility in Mesa, Arizona, for the latter to manufacture sapphire glass. And Apple has prepaid GT Advanced $578 million just to make sure it gets exclusive access to the final technology, which ultimately could aim to make sapphire glass more affordable.