Apple's Cash Is King In Tight Touch Panel Market
“Cash gives us tremendous security and flexibility. When you take risks, it’s like jumping up in the air, and it’s nice to know the ground will be there when you land.”
–Apple CEO Steve Jobs, February 2010
Here’s a good example of the tremendous security and flexibility afforded Apple by its massive cash reserves. Looking to secure a sufficient supply of the touch panels used in devices like the iPhone and iPad, Apple has reportedly signaled its willingness to pay more for them.
“To secure sufficient supply of touch panels used in the iPad and iPhone, Apple has talked with Taiwan-based makers, considering some room for them to hike quotes,” DigiTimes reports, adding, “In order to achieve its internal shipment goal of 40 million units of iPad in 2011, Apple has booked over 60 percent of the total touch panel capacity.”
That’s a wise move strategically. For while it might lower margins on some of the company’s hottest products, it will help to ensure their continuing availability after the recent disaster in Japan, which some worry will cause touch panel shortages. Plus, it raises the market price for components, putting further pressure on less cash-rich rivals.