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Apple to Spend $8 Billion on Retail, Infrastructure

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Apple to Spend $8 Billion

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NEW YORK - APRIL 03: An early customer emerges from the Apple store on Fifth Avenue with Apple Inc's new iPad on April 3, 2010 in New York City. Hundreds lined up in front of the technology company's flagship New York store to be among the first in the world to acquire the device. The much heralded iPad looks to be a bridge between a laptop and smartphone. (Photo by Spencer Platt/Getty Images)

Apple will be spending $8 billion in 2012, mainly on its new headquarters, infrastructure and expanding retails stores.

The information, featured in the company's annual report, was highlighted by UBS analyst Maynard Um in a report to investors, GigaOm reported. According to documents filed with the Security and Exchange Commission:

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 company's annual report also goes on to say that Apple will open about 40 new retail stores in 2012, with three-quarters located outside of the United States.

The new stores are not only for selling Apple products, but will also be placed in more high-profile areas. "Certain stores have been designed and built to serve as high-profile venues to promote brand awareness and serve as vehicles for corporate sales and marketing activities. Because of their unique design elements, locations and size, these stores require substantially more investment than the Company’s more typical retail stores," the report said.

Part of the $8 billion will definitely be spent on Apple's new headquarters because they still have to build it, and Um anticipated that some of the money will go to upgrade and expand data centers and Apple's cloud operations.

It makes sense that Apple is expanding globally because that's where the money is, but we do have to point out that expanding retail is also typically a way for companies temporarily boost stock price. We'll see if Apple's profits stay high after an additional 40 stores with expensive leases.

 

Related Topics Apple, retail, UBS, Maynard Um, stores
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