Apple Bailed out Sharp with $2 Billion Investment

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An analyst says Apple, hoping to get rid of its supplier and rival Samsung invested heavily in the manufacturer Sharp. In financial difficulty, it could not hold the production with inputs from Apple.

It is closely examining capital expenditures Apple for 2012 and 2013 that the analyst Horace Dediu discovered a most unexpected detail. During the last quarter, Apple has invested more than $ 2 billion to ensure the durability of Sharp whose financial situation is at the brink. Horace Dediu for, which is hard to follow these investments every quarter from Apple, the huge war chest would have allowed  Sharp to be “on life support.” Investments were advanced one year to allow Sharp to hold the output.

Circumstantial evidence points to the asset being production equipment (or even a whole plant) previously owned by Sharp,” Dediu said. “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).

For the analyst, there is no doubting the fact that Apple and Sharp have found partners at a time when the American giant, engaged in numerous legal battles with Samsung, looking for new suppliers to ensure production of LCD panels.

Thus, the analyst reports that Apple spending on this sector were up more than $ 2.3 billion compared with its forecasts. Apple would have gone to buy the equipment and plant to Sharp, to avoid a bankruptcy puts into the hands of creditors, and that penalizes delay the launch of the iPhone 5.

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