Apple Makes First Investment in Its New Advanced Manufacturing Fund

On Friday, Apple, Inc. (TSX:AAPL) announced that it has dipped into its new $1 billion Advanced Manufacturing fund, investing $200 million in specialty glass manufacturer Corning Incorporated (NYSE:GLW). Apple and Corning have had a business relationship since the iPhone was first released, and Apple has furthered this relationship by giving Corning this injection of capital to further its R&D budget, assisting with the capital necessary to support continued innovation Apple has sought from Corning over time.

Apple is a company hardwired for innovation, and this investment speaks volumes about how the tech giant thinks about innovation from an ecosystem perspective. In investing in its suppliers and manufacturing concerns, Apple has placed its faith and trust, as well as its money, on the line with respect to the success of Corning. If Corning does well, Apple continues to reap the benefits – with this investment, Apple’s profits are even more closely tied to those of Corning, making new innovation at Corning over the course of the next few new iPhones a greater likelihood.

Apple never ceases to amaze me, and I anticipate investors may see more surprises from the largest company in the world (by market capitalization). The realities of competition in the smartphone space are such that continuous incremental improvements are required for any company to perform well and gain market share. With Apple’s track record of impressive innovation with respect to phones, more is expected from this company. I anticipate the remaining $800 million will also be put to good use in the near-term, as Apple continues to roll out new ideas for its pipeline of products, partnering with its suppliers to make these ideas reality.