The Star Online: Business
The Star Online: Business |
- Firm: Apple surpasses HP as largest buyer of chips
- Apple CEO pitches expansion to Calif. city council
- US stocks fall as Fed delivers mixed economic outlook
| Firm: Apple surpasses HP as largest buyer of chips Posted: 08 Jun 2011 04:55 PM PDT NEW YORK (AP) - Driven by the success of the iPhone and iPad, Apple Inc. has become the world's largest buyer of chips for computers and phones, a research firm said Wednesday. Apple bought $17.5 billion worth of chips last year, surpassing computer maker Hewlett-Packard Co. as the largest consumer, IHS iSuppli said. That was an increase of 80 percent from the year before, reflecting Apple's continuing sales surge. An iPhone contains about $80 worth of chips, according to iSuppli. The chips include the central processor that acts as the brains of the device, radio chips that let it talk to cell towers and the audio chip that converts the owner's voice into a stream of data. The finding that Apple is the No. 1 buyer cements its standing as a company that has the clout, and the cash, to buy chips and other crucial components such as touchscreens when other companies struggle because of supply constraints. As an example, Apple said in January that it had spent $3.9 billion on long-term contracts to secure supplies for the next two years of a "very strategic" component it wouldn't name. Few other companies are able to commit that much money. Last summer, high-tech manufacturers were scrambling to buy chips as sales started reviving after the recession and chip-makers had yet to ramp production back up. But Apple reported no chip supply problems; it blamed shortages of iPhones and iPads instead on limited assembly-line capacity. IPhones and iPads use large amounts of expensive flash memory, accounting for much of Apple's chip consumption. Apple sold 48 million iPhones last year, up 89 percent from the previous year. Meanwhile, PC industry sales grew 14 percent, iSuppli said. IPads went on sale for the first time last year. Samsung, Micron Technology Inc. and Intel Corp. are leading makers of flash memory. The $17.5 billion figure means more than a third of Apple's "cost of revenue" - expenditures excluding corporate overhead - went toward chip purchases last year. Samsung Electronics Co., which makes a wide variety of electronics, and PC maker Dell Inc. were the No. 3 and 4 chip buyers. No. 5 is Nokia Corp., the world's largest maker of phones. However, its output is dominated by cheap phones that don't use as many or as pricey chips as the iPhone. ISuppli expects Apple to extend its lead this year by buying chips for $22.4 billion, compared with $14.8 billion at HP. Latest business news from AP-Wire Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
| Apple CEO pitches expansion to Calif. city council Posted: 08 Jun 2011 04:53 PM PDT CUPERTINO, California (AP) - Its ubiquitous products have already invaded the tech marketplace, and now Apple Inc. is seeking a fitting new Northern California home: a massive spaceship-like structure that will house an estimated 12,000 employees. Apple CEO Steve Jobs made a surprise appearance at a Cupertino City Council meeting late Tuesday to announce plans for a major expansion. "Apple is growing like a weed," Jobs told the council, adding that space restrictions at the company's existing Cupertino headquarters have forced it to rent space in smaller buildings scattered throughout the city, located about nine miles west of San Jose. Jobs presented renderings of a proposed 150-acre (60-hectare) campus built around a gigantic circular building made almost entirely of curved glass, with a heavily landscaped center. "It's a little like a spaceship landing," he said of the futuristic design. Jobs also highlighted environmentally friendly touches such as a natural-gas-fired energy center that would serve as the site's main power source. Most of the parking would be underground, creating space for thousands of additional trees on the property, he said. Apple purchased most of the land from Hewlett-Packard Co., which plans to move out by next year. The new site would allow Apple to increase its workforce and consolidate far-flung staff in one location, Jobs said. He said the iPhone and iPod maker also would continue to use its existing headquarters, which accommodates about 2,600 employees. City officials appeared enthusiastic about the planned expansion. "Now that we've seen your plans, the word 'spectacular' would be an understatement," Councilman Orrin Mahoney said. "And I think everyone is going to appreciate what clearly is going to be the most elegant headquarters - at least in the U.S. - that I've seen." Asked how the expansion would benefit Cupertino, Jobs noted that Apple is already the city's largest taxpayer. If the company cannot continue to expand within city limits, it will be forced to move elsewhere, he said. City leaders were quick to discourage that prospect. "Apple is truly a technology of innovation, and our city staff and City Council looks forward to working with you and helping you succeed here in our community," Mayor Gilbert Wong said after pulling out his Apple tablet computer, an iPad 2, to show Jobs. Jobs said he hoped to submit formal plans for the new campus "fairly quickly," with the goal of breaking ground next year and moving into the space by 2015. Jobs' appearance at the council meeting, which elicited gasps and excited murmurs from the crowd, came one day after he gave the keynote address at a conference for application developers in San Francisco. The 56-year-old has been on medical leave for the past five months - his third in the past seven years - to deal with an unspecified medical issue. He has previously survived pancreatic cancer and undergone a liver transplant. Apple shares rose 20 cents to $332.24 on Wednesday. Latest business news from AP-Wire Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
| US stocks fall as Fed delivers mixed economic outlook Posted: 08 Jun 2011 04:52 PM PDT NEW YORK (AP) - Another lackluster economic report sent stocks down Wednesday, extending a weeklong slide. The Federal Reserve report, known as the Beige Book, showed the economy slowed in several U.S. regions for the first time this year. While seven of the Fed's 12 districts reported steady gains, the economy stalled in the New York, Philadelphia, Atlanta, and Chicago regions, the Fed said. Dallas was the only region to report accelerated growth. That was largely due to the effect of higher oil prices on the region's energy industry. The report added to concerns that have been building since mid-April that the American economy is stalling. High oil prices, bad weather and supply-chain problems following the tsunami and nuclear disaster in Japan have combined to dampen many investors' outlook for the rest of the year. And on Tuesday, Fed Chairman Ben Bernanke acknowledged that the U.S. economic recovery was "uneven" and "frustratingly slow," though he added that he expected growth to pick up in the second half of the year. That has left many investors on edge. "What Bernanke basically said was that we have to believe we're in a soft patch that will pass by itself," said Randall Warren, chief investment officer at Warren Financial Services. "That takes a lot of faith." The Standard and Poor's 500 lost 5.38, or 0.4 percent, to 1,279.56 on Wednesday. It was its sixth straight loss. The Dow Jones industrial average fell 21.87, or 0.2 percent, to 12,048.94. The Nasdaq composite slipped 26.18, or 1 percent, to 2,675.38. Energy companies were among the few stocks to gain broadly. Oil companies like Exxon Mobil Corp, which gained 1 percent, rose after oil settled above $100 a barrel. The jump in oil prices came after OPEC ministers made an unexpected decision to keep output at current levels. Investors had been hoping the cartel would increase output, which could have pushed down the price of crude. Signs that U.S. supplies were tightening also pushed up oil prices. The American Petroleum Institute said late Tuesday that U.S. crude inventories fell more than expected. Corporate news reinforced the glum outlook on the economy. Retailer Abercrombie and Fitch Co. fell more than 5 percent after the company said that it expects its second-quarter earnings to come in below first-quarter results. Network equipment maker Ciena Corp. fell 16 percent after reporting a larger loss and lower revenue than analysts had expected. And home builder Hovnanian Enterprises Inc. lost nearly 12 percent after it reported a large second-quarter loss late Tuesday. The yield on the 10-year Treasury slid to 2.96 percent as investors put money into more stable assets. Yields on bonds fall when their prices rise. Three stocks fell for every one that rose on the New York Stock Exchange. Consolidated volume was 4.1 billion shares. Latest business news from AP-Wire Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
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