Thursday in CE: Apple Talks Massive $350B Investment, Batterygate, Reduced Notch
Apple is making huge headlines today and it has everything and nothing to do with a new product launch.
Firstly, let's talk the eye-watering $350,000,000,000 investment they are injecting into the U.S. economy over the next five years and where it all comes from.
Firstly, Apple will pay $38 billion in foreign repatriation tax payments. They announced on Wednesday it will bring back hundreds of billions of dollars from overseas to fund investment in the U.S. and likely increase its capital returns. The new tax law, a one-time affair, constitutes a 15.5% tax rate to all foreign cash, regardless of where it is and if it comes back to America.
"Apple, already the largest US taxpayer, anticipates repatriation tax payments of approximately $38 billion as required by recent changes to the tax law. A payment of that size would likely be the largest of its kind ever made," the company said in the release.
The next $30 billion will end up as capital expenditures over the next five years including the creation of 20,000 new U.S. jobs, a $10 billion allocation for domestic data centers, and possibly a second HQ (a lá Amazon.) $5 billion will head to the Advanced Manufacturing Fund, which was created last May, transforming $1 billion to $5 billion.
Finally, $55 billion will bolster purchases from domestic suppliers and manufacturers. That spending forecast is up from the $50 billion Apple spent at 9,000 domestic suppliers and manufacturers in 2017.
After quick math, there is still a big chunk missing. So where is the last piece to the puzzle? Realistically, it is probably wrapped up in more domestic and purchases from suppliers and manufacturers over the five-year span that Apple referred to with their expenditure ventures.