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And it's not like Apple waltzes in and just stuffs all the RAM that's lying around into a shopping cart. One of their uses of their cash reserves is to pre-comm
by microtherion 5y ago
And it's not like Apple waltzes in and just stuffs all the RAM that's lying around into a shopping cart. One of their uses of their cash reserves is to pre-commit to buying the components they need far in advance.
In principle, it seems to me that this shouldn't be causing component shortages — on the contrary, it should reduce planning uncertainty for component manufacturers.
- Gibbon1 5y agoThe fact that some companies have contracts for reoccurring scheduled delivers of parts means when the SHTF it's going to be really bad for those that don't. If Apple has a contract to buy 10% of a manufacturers capacitors. But then material shortages drops the manufacturers capacity in half. Apple's share is now 20% and anyone without a standing order is SOL.
- lotsofpulp 5y agoThe situation would be the same if Apple did not have a contract, since they can afford to pay a higher. The contract lets manufacturers more easily invest in future capacity.
- bluGill 5y agoNo, without the contract Apple would have to pay more per part. The contracts are x for $y. They do have clauses for price increases so Apple might be paying more, but not what they would pay without the long term contract. I don't have insight into Apple ,justthis is how contracts work in general
- lotsofpulp 5y agoMy comment was to note that Apple would still end up with 20% of the production since they can afford a higher price. So the same situation in terms of allocation with or without a contract, in contrast to what I thought Gibbon1’s comment implies.