Apple Planning Surge in Retail and Cloud Spending in 2012

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.

asymco capex ios unit sales
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)

Top Rated Comments

orfeas0 Avatar
147 months ago
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 :rolleyes: <--).
Score: 3 Votes (Like | Disagree)
GiantSteve Avatar
147 months ago
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.
Score: 3 Votes (Like | Disagree)
justinfreid Avatar
147 months ago
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. ;)
Score: 2 Votes (Like | Disagree)
FrizzleFryBen Avatar
147 months ago
Throw more money at North Carolina! We can use the jobs, even if they are temporary construction.
Score: 2 Votes (Like | Disagree)
solomania9 Avatar
147 months ago
Apple and iCloud are gonna make it rain...
Score: 2 Votes (Like | Disagree)
RobertMartens Avatar
147 months ago


ShoulD be interesting to see what's in store (see what I did there?) for the retail stores, maybe theyll offer some new services?
Which? Do you mean the big D at the end of should, or the missing ' in they'll?

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You know it! That is why I will NOT sell my AAPL stock for at least 5 years, even though I am 71. AAPL is going places!

Hopefully you'll be staying put.

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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?


.

Geesh, that means by 2020 every person on earth will have to buy 2 iPhones a year. I'm up for it, but is everyone?
Score: 1 Votes (Like | Disagree)

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