iPad, iPhone Driving Apple's Chip Purchases: iSuppli

 
 
By Nicholas Kolakowski  |  Posted 2010-07-21 Email Print this article Print
 
 
 
 
 
 
 

Apple is poised to become the world's second-largest OEM semiconductor buyer in 2011, according to research firm iSuppli, and could take the No. 1 spot by 2012.

Apple could become the world's second-largest OEM semiconductor buyer in 2011, according to a July 21 note by research firm iSuppli, on the way to becoming the top global chip purchaser by 2012.

Apple's projected semiconductor spend of $16.2 billion for 2011 will place it ahead of Samsung, which is projected to spend $13.9 billion, and just behind leader Hewlett-Packard's $17.1 billion.

"An advancement in the rankings means that a company has been successful in introducing new products and that it is allocating more dollars in search and development-two factors that, incidentally, feed innovativeness as well," Min-Sun Moon, an analyst for iSuppli, wrote in the July 21 research note. "Apple's expected rise to No. 2...means that the company's investment in its new smartphone and tablet has paid off-and will continue to do so for some time to come."

Apple's semiconductor spend for 2010 will total $12.4 billion, for a growth rate of 54 percent. In order to reach second-place position in 2011, Apple will need to increase spending by another 30.4 percent. Unless HP makes an acquisition or merges with another firm, Moon added, Apple could take the number-one spot in 2012.

As Moon noted, Apple has seen its semiconductor purchasing fueled by demand for its products. The company sold 3.27 million iPads in the third fiscal quarter of 2010, along with 3.47 million Macs, 8.4 million iPhones, and 9.41 million iPods. Those shipments contributed mightily to Apple's bottom-line revenue of $15.7 billion and net quarterly profit of $3.25 billion.

Even though iPod sales have continued to see a quarterly single-digit decline-a phenomenon that Apple executives have at least partially attributed to cannibalization by the iPhone-products in other categories have seen uniform increases.

That level of demand, however, has put pressure on Apple's supply chain. Tim Cook, Apple's chief operating officer, suggested during a July 20 earnings call that the company had ramped up production for both its new iPhone 4 and iPad, and was attempting to move inventory through its channels as quickly as possible.

"Let me be very clear. We're selling every unit we make currently," Cook said.

Hours before Apple gave its third fiscal-quarter results, iSuppli published a research note suggesting the company would ship 12.9 million iPads in 2010, followed by 36.5 million in 2011 and 50.4 million in 2012.


 
 
 
 
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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