Apple’s Prepayments For Inventory Components Increase By $1.15 Billion

Ahead of potentially multiple product launches including the iPhone 5 and iPad Mini, Apple is reportedly securing a lot of component supplies resulting in increased expenses by $1.15 billion sequentially in the June quarter (via Apple Insider). Company’s growing prepayments were revealed in the company’s 10-Q filing and highlighted on Monday by analyst Maynard Um with Wells Fargo Securities. Apple’s prepayment for components reached 12.6 percent of Apple’s total sales, which according to the analyst, is the highest level seen by the Cupertino giant in the last four years.

Detailing from the source:

 Apple’s increases in inventory component prepayments have been followed by what Um called “a solid ramp-up in revenue” in the proceeding two or three quarters.

The significant growth in spending comes as Apple is rumored to be planning to launch a number of new products in the coming months. Most notably, the company is expected to update its iPhone this fall with a new sixth-generation model.

Other rumored products that could be introduced before the end of the year include a smaller iPad expected to have a 7.85-inch display, a new 13-inch MacBook Pro with Retina display, an updated iMac, a new iPod touch, and potentially even a redesigned iPod nano. If all of those products do, in fact, launch later this year, it would likely be the busiest holiday shopping season in Apple’s history

Apple Chief Executive Tim Cook said last week that widespread rumors of his company’s next-generation products had a negative effect on sales of existing products in the last quarter. Cook said he has the sense that there is “incredible anticipation” for Apple’s future products, while Chief Financial Officer Peter Oppenheimer said he and other executives are “excited about the new product pipeline.”

A recent survey has already revealed that there is an “unprecedented level” of demand for Apple’s next iPhone, even though the product has not yet been officially announced by the company.