Apple's $10.5B Spending Spree on Robots, Lasers

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Nov. 13 (Bloomberg) -- Apple is putting a record $10.5 billion to work in new technology -- from assembly robots to milling machines -- that consumers will never see. Tom Giles reports on Bloomberg Television's "In The Loop. (Source: Bloomberg)

Announcing it will spend 10.5 billion dollars on new technology that most people will never, ever see.

Join me is tom giles.

10 point $5 billion, what are they spending it on?

A lot of new technology that is going to happen -- help them with their supply chain.

Lasers, robots, design and create the iphone and ipad.

The thing that will make the device is so special and singular actually specialized equipment.

Why they spending this chunk of money on the supply chain?

What you want to avoid when you are apple, you want to make sure you have all of the components at a time you need, when you are trying to get them into the hands of your buyers.

Right on the cusp of the holiday spending, it is a critical quarter.

They are facing a lot of competition from the likes of samsung.

At the compete with others for those critical parts.

They go to the actual suppliers and they say we will buy the machines for you.

We'll help you actually purchase the machine, this really expensive, specialized equipment to make sure we are the first was in line when we need the parts.

What about expenditures?

This is a company that has $150 billion in cash.

A lot of money to settle stop that are right below samsung.

. they are way ahead of people like hp.

We looked at bloomberg data and they are the second among the consumer electric companies.

What about how apple is different like getting really involved in manufacturing?

Exactly.

A lot of consumer electronics will go to a designer and say help us put together the design and specs for a new laptop or tablet or smart phone.

And then what happens is they will higher the contract manufacturer to design and build of that.

Apple is very different.

They do the design.

They get in with the suppliers and say we are going to tell you how we wanted this to look stop will be actively involved which is something steve jobs set in motion.

That was his mandate in many ways.

This exclusive deal they have with suppliers, how does that affect the suppliers and their relationship?

If i am apple and i linda yueh the billions of dollars that you need or i buy you the equipment, when you're going to crank out the machines a you are going to do the finishing touches, gas was first in line?

That isn't me.

You will have less capacity.

Or somebody else.

It really helps some.

Thank you so much.

Let's turn back to the markets.

We look to be getting back-to- back declines and equities after

This text has been automatically generated. It may not be 100% accurate.

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