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To take that one step further why aren't Apple putting that money into building its own overseas manufacturing facilities and reducing its reliance on 3rd parti
by midnightclubbed 11y ago
To take that one step further why aren't Apple putting that money into building its own overseas manufacturing facilities and reducing its reliance on 3rd parties?
Building and running factories in China with the money it is making from Chinese consumers seems a more prudent choice than paying a chunk of US taxes so it can do share buy-backs?
- toomuchtodo 11y agoWhy doesn't Apple just buy Foxconn (or a majority stake)? This is not without precedent in other industries; owning the entire vertical would be hugely advantageous from a strategic perspective.
- brisance 11y agoBecause owning plant and equipment and capital assets is very risky; everything gets obsolete within months and now you're stuck with illiquid items that you have to amortize.
- toomuchtodo 11y agoCompared to capital that's fairly illiquid at the moment? Better to have a manufacturing base for your next products instead of sitting on capital that's earning close to 0 returns and that you're probably never going to repatriate to the US unless an unlikely tax holiday occurs.
- brisance 11y agoDisagree. The GT Advanced Technologies debacle is a concrete example. Sure Apple lost money on that one, but it would have been a bigger hit on their bottom line had they full invested in their own sapphire plant and tooling. In the big scheme of things, fighting a lawsuit with an external supplier is a small price ot pay as compared to missing an iPhone launch window.
- seanmcdirmid 11y agoApple wants to focus and develop its expertise in doing stuff with high margins (high-end hardware design and software development). To run lean factories would be a huge distraction to them, it makes sense for them to just let companies like FoxCon do it.