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RumorTT: Apple spent $2 billion bailing out the struggling Sharp

RumorTT: Apple spent $2 billion bailing out panel supplier Sharp.

@anthony256
Published Thu, Nov 8 2012 5:33 AM CST   |   Updated Mon, Oct 19 2020 8:14 PM CDT

With Samsung and Apple taking up most profits in the mobile sector, it leaves just scraps to the rest of the market, thus most companies are struggling right now. One of these companies is Sharp, and it looks like Apple analyst Horace Dediu may have discovered something quite worthy of a RumorTT post.

RumorTT: Apple spent $2 billion bailing out the struggling Sharp | TweakTown.com

The analyst looked into Apple's 2012 capital expenditures and found some spending which was much higher than Apple previously disclosed. Dediu noticed that Apple had spent $2.3 billion more than it had forecast on "product tooling, manufacturing process equipment and infrastructure".

Dediu believes that the Cupertino-based iDevice maker bailed Sharp out, who were in serious financial issues earlier this year:

Circumstantial evidence points to the asset being production equipment (or even a whole plant) previously owned by Sharp. Sharp is a key supplier of screens to Apple but is also in financial distress. Sharp has also been the object of an intended investment by Foxconn [Hon Hai]. That deal fell through as Sharp's finances deteriorated. My guess is that these attempts to shore up Sharp are directed by Apple to ensure both continuity of supply and a balanced supplier base (offsetting Samsung, another supplier.) If Sharp were to enter into some form of bankruptcy, the key plant(s) used in producing screens for Apple might be "up for grabs" by creditors and they might be taken off-line, jeopardizing Apple's production capacity, irrespective of contractual obligations. I believe that Apple's late and unprecedented expenditure was to secure this asset. I further believe that the financing for this deal was done through a swap of "pre-orders".

NEWS SOURCE:macrumors.com

Anthony is a long time PC enthusiast with a passion of hate for games built around consoles. FPS gaming since the pre-Quake days, where you were insulted if you used a mouse to aim, he has been addicted to gaming and hardware ever since. Working in IT retail for 10 years gave him great experience with custom-built PCs. His addiction to GPU tech is unwavering.

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