The $137 Billion Dollar Problem

At least one analyst thinks Apple has a tough couple of years ahead of it:

As for Apple’s Capex requirements, [Peter] Misek expects costs to double in the next two years, adding an additional $10 billion a year to the bottom line. High on the list of responsibilities is the possibility that Apple may have to finance the build-out of chip fabrication facilities as its current suppliers, specifically TSMC, are lacking the capital to expand production to nominal levels. It was reported in January that TSMC had been contracted to manufacture the A6X SoC used in the fourth-generation iPad, and is rumored to be spearheading production of next-generation A-series chips for future iOS products.

Also of concern in regard to a rise in capex spending are display manufacturing and costs related to iCloud data centers.

Apple is also forecast to make an aggressive push into burgeoning wireless markets like India and China, the former being a largely prepaid subscribership.

These are problems most companies would love to have — provided they were also sitting on Apple’s $137,000,000,000 nest egg. Apple of course has both.

I don’t doubt the competition will increase over the coming years. Apple had a nice run where its old competitors (Microsoft, then the PC OEMs, and also Sony) just didn’t get it. Google and Samsung are faster learners.