Apple Planning Surge in Retail and Cloud Spending in 2012

[MacRumors]

Last week, Apple released its annual 10-K report, offering a summary of the company's financial performance and other items of interest for fiscal 2011. One interesting tidbit from the report is gaining some attention for its glimpse into the future, as GigaOM reports on a new research note from UBS analyst Maynard Um addressing Apple's planned capital expenditures (CapEx) for fiscal 2012. From the 10-K report:

The Company's capital expenditures were $4.6 billion during 2011, consisting of approximately $614 million for retail store facilities and $4.0 billion for other capital expenditures, including product tooling and manufacturing process equipment, real estate for the future development of the Company's second corporate campus, and other corporate facilities and infrastructure.

...

The Company anticipates utilizing approximately $8.0 billion for capital expenditures during 2012, including approximately $900 million for retail store facilities and approximately $7.1 billion for product tooling and manufacturing process equipment, and corporate facilities and infrastructure, including information systems hardware, software and enhancements.

The projected 74% increase in capital expenditures is evidence of Apple's commitment to both retail stores other infrastructure needs, many of which are related to Apple's cloud-based initiatives. On the retail front, Apple has noted that it is planning to open forty new retail stores during fiscal 2012, and is also planning to expand or replace a number of its existing stores that are too small to adequately serve customer demand. Other infrastructure needs include cloud-focused facilities like the North Carolina data center where Apple is building a solar farm and the new corporate campus in Cupertino.

Horace Dediu at asymco has taken a different look at Apple's CapEx within the context of iOS device sales, noting that sales have been been closely correlated with CapEx over the past several years. Dediu's conclusion is that the significant increase in budgeted non-retail CapEx points toward Apple expecting yet another year of 100% growth in iOS device unit sales.

(via Daring Fireball)

Article Link: Apple Planning Surge in Retail and Cloud Spending in 2012

 

[solomania9]

Apple and iCloud are gonna make it rain...

 

[Digitalclips]

Roll out of new Apple mapping by the end of 2012 I hope.

 

[likemyorbs]

Nice. iCloud really puts the cherry on top of the Apple experience. This kind of streamlining is what makes them grow.

 

[GiantSteve]

The cost of building a redundant cloud infrastructure is huge. You need several data centers the size of the North Carolina facility and they need to be geographically distributed. In addition to ensuring sufficient capacity it's necessary to mirror operations across multiple centers... this is the only way to ensure 24x7 operations that can withstand network disruptions and data center wide problems. Once this is in place iCloud can realize its full potential.

 

[3N16MA]

You have to spend money to make money.

 

[FrizzleFryBen]

Throw more money at North Carolina! We can use the jobs, even if they are temporary construction.

 

[vitzr]

Perfect! This will drive my stock even higher.

 

[Naimfan]

That's evidence of a company leveraging its current success to invest in its future.

Given Apple's track record, it's a very good sign.

 

[orfeas0]

Now let's hope for an apple store in Greece!

 

[Mattsasa]

Wait does this mean apple will be spending this much next year? Or consumers will?

 

[justinfreid]

Increased capital expenditure is required to support the ever burgeoning iOS customer base and, of course, to increase it.
A 74% increase is enormous and gives a sense of Apple's commitment to, among other things, keeping iCloud running strong and its customers satisfied.
I hope it speaks to Apple's increased commitment to cloud services - an area they have to compete in to keep iOS moving forward and a huge investment in R&D so one day people can purchase a Siri robot to really assist them.

 

[ovrlrd]

Meanwhile still no sign of iTunes Match coming out. Even though they said it would be by the end of October.

I am glad they are spending money on Cloud stuff but it would be nice if they would hurry up and get iTunes Match out the door.

 

[Fazzy]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_2_1 like Mac OS X; en-gb) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8C148 Safari/6533.18.5)

ShoulD be interesting to see what's in store (see what I did there?) for the retail stores, maybe theyll offer some new services?

 

[EnergonCube]

Now let's hope for an apple store in Greece!

I don't mean to be insulting, but can the people of Greece afford that right now? The financial situation over there seems rather dire.

 

[vartanarsen]

Steve would have never allowed this. He lived in a house without friggin furniture for Chripts sake.

 

[orfeas0]

I don't mean to be insulting, but can the people of Greece afford that right now? The financial situation over there seems rather dire.

Well yea, but that doesn't mean we can't buy laptops?
And in the last few years, more and more people are buying macbooks over here. Which means an apple store isn't a bad investment, it will sure help with the advertising. Everyone who uses one can't go back (except a few <--).

 

[basesloaded190]

Wait does this mean apple will be spending this much next year? Or consumers will?

Apple

 

[cvaldes]

Wait does this mean apple will be spending this much next year? Or consumers will?

This article is about capital expenditures, not revenue projections.

Reread the article. The answer to your question is there.

Hint: it's in the quoted block from the 10-K filing.

 

[TWSS37]

Apple

This article is about capital expenditures, not revenue projections.

Reread the article. The answer to your question is there.

Hint: it's in the quoted block from the 10-K filing.

Clearly you missed his point.

 

[Chupa Chupa]

Hopefully this is for a big round of international store openings. I think Apple has the major U.S. markets fairly saturated. I've lost count how many we have in the DC metro area but I have 4 stores within a 10 min drive of my house.

 

[milo]

I am glad they are spending money on Cloud stuff but it would be nice if they would hurry up and get iTunes Match out the door.

If it's not ready (and from tester reports, sounds like it isn't there yet) I'd much rather see them delay it until they really get it right. Just look at the recent hardware and software releases and the issues they had from rushing things out the door.

 

[TallManNY]

Even doubling the capital expenditures will leave Apple with tons of extra cash. I'm sure this extra $4 billion of expenditures will be made by Apple just from the profit on 4S before the end of this year.

Apple can't spend the money fast enough. It is time to pay a dividend to the shareholders.

 

[aristotle]

Well yea, but that doesn't mean we can't buy laptops?
And in the last few years, more and more people are buying macbooks over here. Which means an apple store isn't a bad investment, it will sure help with the advertising. Everyone who uses one can't go back (except a few <--).

Actually, you should be paying your fair share of taxes rather than spending your excess money on laptops. Greece is in a crisis right now because not enough taxes are collected.

 

[paul4339]

so that graph basically forecasting that Apple should be selling around 140 million iPhones in fy2012 (double from 2011)? and roughly 220 million iOS devices in total for fy2012?


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