This is how the electronics industry always worked. I times of yore it was IBM who bought up all the capacity in various fabs then defined later what devices would be manufactured on those wafers.
Apple funds creation of new factories in return for exclusive use of the parts they produce. I believe they also prefer to negotiate pricing down to cost, then pay bonuses for meeting quantity/date goals.
Supposedly, the reason there weren't more iPod competitors back in the day was that Apple already had negotiated exclusive rights at pre-negotiated prices to buy a big chunk of the flash memory that otherwise would have been on the market.
Supposedly, the reason there weren't more iPod competitors back in the day was that Apple already had negotiated exclusive rights at pre-negotiated prices to buy a big chunk of the flash memory that otherwise would have been on the market.