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Apple manufacturing expenses surge to $15.4B in Q3

updated 12:46 pm EDT, Fri July 25, 2014

Company ramps up ahead of fall launches

Data from Apple's 10-Q filing with the SEC indicates that Apple spent $15.4 billion on manufacturing and components during the June quarter, a 22 percent increase quarter-over-quarter, notes Morgan Stanley analyst Katy Huberty. Apple put another $5.6 billion towards other commitments including advertising, R&D, Internet/telecommunications, and product tooling/manufacturing equipment. Combined the company's commitments totaled $21 billion, a 36 percent increase quarter-over-quarter, and 46 percent year-over year. The former is said to be the highest sequential growth for any Apple Q3 since the build up to the iPhone's launch in the summer of 2007.

Huberty suggests that the jump is related to preparing a record number of iPhone units for a fall launch; some separate reports have predicted as many as 70 to 80 million. She also argues that it backs the idea of entering a new product category. Typically this is believed to be smartwatches, in the form of the iWatch.

Apple is also working on updated Macs and iPads. Ramping up expenses is likely unnecessary with those products however, since Macs are a now a relatively minor business, and the new iPads aren't expected to undergo any major changes.

by MacNN Staff




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