8-KMaterial Agreements

Apple Inc. 8-K Report, Material Agreement (Aug 26, 2005)

Filed August 26, 2005For Securities:AAPL

Summary

This 8-K filing from Apple Computer, Inc. (now Apple Inc.) on August 26, 2005, announces a significant supply agreement with Freescale Semiconductor, Inc. The core of the agreement, effective August 22, 2005, establishes Freescale as a supplier of microprocessors for Apple's orders through December 31, 2008. This secures a critical component supply chain for Apple for a defined period, which is crucial for product planning and manufacturing continuity. While the agreement obligates Freescale to supply, Apple's commitment is limited to existing work-in-progress at the time of the agreement, offering flexibility. Investors should view this as a step towards managing supply chain risks for key internal components, contributing to the stability and predictability of Apple's operations during the specified timeframe. The filing also highlights the role of CFO Peter Oppenheimer in authorizing this disclosure.

Key Highlights

  • 1Apple entered into a Purchase Agreement with Freescale Semiconductor, Inc. on August 22, 2005.
  • 2The agreement designates Freescale as a supplier of microprocessors for Apple's orders.
  • 3The supply arrangement is set to continue through December 31, 2008.
  • 4Apple has no obligation to purchase Freescale microprocessors beyond existing work-in-progress at the agreement's execution date.
  • 5This agreement is designed to ensure a stable supply of a key component for Apple's products.
  • 6The filing was made to disclose this material definitive agreement, as required by SEC regulations.
  • 7Peter Oppenheimer, Apple's CFO, signed the report, indicating senior management oversight.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose a material definitive agreement entered into by Apple Computer, Inc. with Freescale Semiconductor, Inc. regarding the supply of microprocessors.

Apple is obligated to purchase Freescale microprocessors for orders placed through December 31, 2008. However, Apple is not obligated to purchase any microprocessors other than those that were already in progress at the time the agreement was executed, providing Apple with flexibility.

Freescale Semiconductor, Inc. is obligated to supply its microprocessors for orders placed by Apple through December 31, 2008.

This agreement is important as it secures a supply chain for a critical component (microprocessors) for Apple's products for a defined period (through 2008). This can lead to more predictable manufacturing and operations, mitigating supply chain risks for investors.