I have a pretty simple policy when it comes to Apple supplier news. 1) Don't focus on the details, 2) Look for actual numbers and not just year-over-year percentages, 3) Put more weight on larger suppliers, especially the assemblers (those at the top of the supplier chain). As a reminder, Pegatron was rumored to have won a contract for assembling somewhere between 30-50% of iPhone 6 units, which traditionally had been Foxconn's expertise. Judging by Tim Cook's comments during last month's earnings call and the popularity of the larger iPhone 6 Plus, I would assume Pegatron's capital expenditure boost represents new iPhone production capacity coming online versus simply reshuffling the deck between Foxconn and Pegatron. Demand is still outpacing supply in the U.S., and it's even worse in China. Apple will sell every iPhone it can produce this quarter so the rush is on to ramp up production.