Modern tech companies are most likely to be software related. But it was revealed by Bloomberg that the case is not necessarily true.
Apple and four other big tech companies that include Amazon, Google's parent company Alphabet, Facebook and Microsoft, have spent at least $80 billion combined on industrial equipment in 2017. This is roughly ten times as much as General Motors spent on the same period.
In comparison, GM has a huge army of human resources and machines capable of producing 10 million cars a year. This is something that Apple and other tech companies simply isn't.
GM has global headquarters in Detroit's Renaissance Center, GM manufactures cars and trucks in 35 countries. The company that was the largest automobile manufacturer from 1931 through 2007, is the 12th-biggest U.S. company by annual revenue, according to Bloomberg. But its spending on capital goods in 2017 ($8.5 billion) is far in comparison with tech companies'.
"They spent a combined $80 billion in the last year on big-ticket physical assets, including manufacturing equipment and specialized tools for assembling iPhones and the powerful computers and undersea internet cables Facebook needs to fire up Instagram videos in a flash."
"Thanks to this surge in spending—up from $40 billion in 2015—they’ve joined the ranks of automakers, telephone companies, and oil drillers as the country’s biggest spenders on capital goods, items including factories, heavy equipment, and real estate that are considered long-term investments."
"Their combined outlay is about 10 times what GM spends annually on its plants, vehicle-assembly robots, and other materials."
According to Credit Suisse analysis, it is actually tech giants and not traditional industrial companies that are driving the fastest growth in capital expenditure seen for some years. The $80 billion spending money is also a reason why tech companies are difficult to unseat.
Breaking them down, Apple sub-contracts its manufacturing, but frequently designs its own production machines for use by suppliers, and sometimes buys production equipment directly. Apple had also invested in a sapphire production plant, and on a smaller scale, invested in repair equipment for its retail stores.
Google’s driverless cars on the hand, spent at least $20 billion a year for developing laser-guided sensors and computer chips. There are also a lot of hardware behind Google's massive array of servers.
As for Facebook and Microsoft, the two have purchased/created/established several data centers and undersea cables to ensure their services work as efficient as possible.