What Billion-Dollar Secret is Apple Hiding?

Is Apple (NASDAQ:AAPL) creating a secret supply chain that fixes manufacturing problems? Is there a new product clandestinely under production that the company wants to spring up on the world unannounced? Is there a manmade colony in space that only Apple knows about?

That last theory is too far-fetched, but considering the excitement Apple usually generates, the possibility of the first two of those being true is almost as exciting.

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Apple has been increasing its capital spending at an incredibly brisk pace, according to a research by Asymco analyst Horace Dediu, and it’s not obvious to anyone what the dollars are getting drowned in.

“My observations for over a year have been that Apple is increasing its capital spending to such a degree that it is neither fish nor fowl,” Dediu wrote in his report. “It operates data centers but presumably does not operate fabrication plants. And yet it spends more than Intel (NASDAQ:INTC) and Google (NASDAQ:GOOG) combined.”

Dediu estimated that Apple’s spending had increased in the just-ended fiscal year to $10 billion, outgrowing Amazon (NASDAQ:AMZN), Google, Intel, and Microsoft (NASDAQ:MSFT). At this rate, Apple’s spending could soon rival Samsung’s $22 billion a year charge, the analyst estimated.

According to Dediu, one hypothesis has been that the expenditure goes on data centers or on real estate for spaceship campuses, but that can be dismissed on the fact that those can’t cost that much and, even if they did, the spending would be gradual. In fact, Apple may possibly be working on creating semiconductors or other mechanical components, he suggested. The company may be keen on controlling all aspects of the development and production of its high-value products.

“The capital is being deployed almost silently and, though vast in scale, barely gets a mention from analysts,” Dediu added. “Not even a single question has been raised at any earnings call about this spending.”

Any guesses?

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