Apple Announces Plans to Build $1 Billion Campus in Austin, Texas

[ryanwarsaw]

Why doesn't Apple open buildings in some of the "flyover" states? Seems to me that the costs would be much lower for them and their employees. If I could get a good job with Apple I wouldn't mind moving to, say, Montana.

Because to a certain extent Apple needs workers with the relevant skill set required to be in the area. Amazon for example picked their new HQ locations based upon workers they need. How many people do you think can fill these job openings in Billings Montana?

Austin is a great candidate. Skilled workers and less expensive than California. If Apple was going to start rustling cattle then Whitefish would make a great HQ.

 

[curtvaughan]

This has already been happening in Austin for quite some time. Haven't looked in awhile, but the city is continuously at or near the top of the fastest growing cities in the country.

My wife and I looked at moving there 6+ years ago. Home prices in Austin were comparable to what they were here in Kansas City at that time. We were looking at homes in the ~$150-200k range. Since that time, those same homes in Austin are selling in the ~$350k range. Here in KC, those houses are only up to ~$250k.

Yes, I've been living here since the early 70s when I was a student at U.T. It was still a fairly sleepy college town and music center at that time, with a population of around 200 thousand. I could rent a house back then for less than $200/month, and the tuition/fees at U.T. were less than $300/semester (it's now about $6000/semester). I bought my current house in the early 90s, prior to the tech boom of the mid-90s, for $85K. It is now valued around $300K (2 BR, 1 bath, house built in 1948). Austin experienced a construction boom in the 80s, followed by the tech boom in the 90s, so that little sleepy college town of 200 thousand has grown to 930 thousand and an estimated 2 million for the metro area. Most of the population increases of the last 20 years have been as the result of the tech boom, which also enhanced real estate investment and development. As has happened to cities like San Francisco, this has substantially changed the character of Austin. It's reputation as a sleepy, laid-back, environmentally friendly and inexpensive place to live is largely 35 years out of date. It's most iconic song, "Home With the Armadillo" (Gary P. Nunn), was composed when the music venue Armadillo World Headquarters was a major music hub. The Armadillo went out of business and was demolished in 1981, mainly as a result of rising downtown lease costs at the time (80s construction boom).

 

[jeyf]

takes a lot of staff to keep this t**d polished?
i think we see apple as that store in the local shopping center; its NOT:
-Apple has a custom existence in every country on the planet.
-they know more about YOU than your mother because YOU own an iPhone.
-peeps see Tim Cook as an individual and the Apple go to person; NOT.


There is some risk in companies maintaining the mega a campus in one country, one city?

 

[5105973]

I thought the same thing. For the minimal amount of products they sell, there are an awful lot of people working for Apple. It'd be one thing if their quality was great or they were churning out products quickly, but neither are happening.

I agree it looks that way. And therefore seems baffling. It’s not like they are Samsung and also sell a huge range of appliances as well as industrial components.

But think about it, what we see Apple selling now are products that have been in development for years—very chaotic years while they adjusted to Steve’s death and built out the main campus and have seen Tim positioning the company to be less of a California phenomenon and more of a global presence with a huge painful slog into China and another challenging foray into India and a more successful entry into smaller up and coming countries like Vietnam.

Yeah they did seem to hit a blockage in that pipeline Tim keeps referring to, but in the next year or two we may well be shocked to see what they’ve been keeping under wraps.

They’re getting into entertainment, news, health and fitness, automobiles/navigation, green initiatives, to name but a few. It’s sometimes easy to forget that when you’re dealing with dongles in your day to day life.

 

[I7guy]

Great quality products? Like how I can't use the headphones that come with my $1000 phone in my $1500 Macbook Pro? Or that a "pro" computer has a whopping 2 USB-C ports? How about the charging location for the Magic Mouse? Or how many software features are announced in "beta" or are "coming soon" but not available at launch? I can keep going if you want more examples.

The Mac Mini took 4 years to be updated, the Mac Pro hasn't been updated since 2013, the iPad mini is creeping up there since its last refresh. With the workforce they have, I don't think its an unrealistic expectation that these products should be updated a little more frequently.

To be clear though, I think Apple makes good products that last longer than ones from their competitors. I just don't think they are as great as they used to be. Given how much they are charging, its harder to justify spending that much when companies are surpassing Apple in smartphone features.

We all tend to center our discussions around our experiences. So for us we love (okay like a lot) our Apple products.

I have no problem with “beta” features. That’s an industry norm these days.

We have three MacBook airs of various age and we really like them as well.

So my/our opinions are, yes, Apple produces great quality products.

 

[fathergll]

You do stop reporting unit numbers if you want to change the valuation of the stock. By focusing on units, wall street has been missing the big picture.

Look at companies like Netflix and Amazon that focus on customers, and their stock price is more than 90 times their earnings.

Amazon has 100 million Prime subscribers and Netflix has 148 million subscribers.

Apple has an active installed base of over 1.3 billion loyal customers, but their stock price is only 14 times their earnings. If Apple were valued using the same metrics as Amazon and Netflix, its stock price would be 5x higher.

Apple wants to change the focus from units to customers.

This billion dollar campus is primarily going to be a call center engaged in sales and customer support.

Yes I agree. Thats the point. When unit sales growth becomes stagnant it can negatively impact the stock hence they need to focus on other metrics. The debate here isn't Apple's actual value or if unit sales is an accurate measurement. The debate simply was if iPhone growth is slowing and no question that is a big fat yes.

 

[Oculus Mentis]

What do they all do? So many employees and so little output.

Pixel perfect Emoji!

 

[PotatoLeekSoup]

See if this holds up as the iPhone sales continue to decline.

Apple has an ungodly amount of cash. Why would they not continue to invest in their future?

 

[cube]

Because to a certain extent Apple needs workers with the relevant skill set required to be in the area. Amazon for example picked their new HQ locations based upon workers they need. How many people do you think can fill these job openings in Billings Montana?

Austin is a great candidate. Skilled workers and less expensive than California. If Apple was going to start rustling cattle then Whitefish would make a great HQ.

It is not about skills or cost for Apple. It is about the other labs that are there.

 

[cb3]

Yay!

Hope it’s near my fave places. Just had totally fun outing with a couple friends here-archer hotel at the domain

It will be next to Apple's existing Parmer Lane location.

 

[tromboneaholic]

Yes I agree. Thats the point. When unit sales growth becomes stagnant it can negatively impact the stock hence they need to focus on other metrics. The debate here isn't Apple's actual value or if unit sales is an accurate measurement. The debate simply was if iPhone growth is slowing and no question that is a big fat yes.

Smartphone growth is slowing in general. It's not a strictly Apple issue. But this call center isn't just to support iPhones. It will likely also support Apple Watch (that's growing) for example, and Apple's services that will probably be a $50 billion business this year.

 

[MoreRumors?]

It literally says it in the article that they will be expanding to other cities and states...

I am referring to states that do not have any offices and those listed in the article already have it.

 

[cube]

I am referring to states that do not have any offices and those listed in the article already have it.

Apple goes where they need to be close by.

 

[Oculus Mentis]

The same people that make snide comments on how Apple has too many people working for them are half the time the same people that think Tim Cook pulls engineers off of Mac Pros to make watch bands. The only only time they are content is when their favorite gadget gets an update.

Me thinks there are too many managers and not enough developers...

 

[Unity451]

If Apple wants to keep making bigger iPhone... why not go where everything's bigger?

 

[ksec]

Yep, understood, but they're investing a billion dollars, so they're spending a billion to save hundreds of millions?

Many billions in the long term. Salary in SV is getting ridiculously high, pushing higher rental, higher housing prices, more SV investment wins from property. Consider SV is paying 5-10x the salary of Engineers from China / Taiwan / Japan and in some cases Western Europe. If you are wondering why Chinese companies can compete with Apple is precisely because their salary are MUCH lower.

SV need to fix their housing prices. Otherwise things will get ugly.

P.S - And it is obvious there are far too many slack in the Engineering team, without Steve behind them constantly pushing them to limit they aren't really performing.

 

[macduke]

I have always said that Austin is the only place in Texas that I would consider living.

Don't they build some Macs in Texas? They are probably ramping up these facilities because they are going to be expanding manufacturing operations into the U.S. for more product lines. This is why the prices have been going up across the board on Apple gear. Do you guys think it's a coincidence that the Huawei exec was arrested and then suddenly Qualcomm gets a stop on iPhone sales in China? Apple is hedging their bets so they don't become a casualty of the economic trade war. I'm concerned that due to the scale of their operations they are reacting too slowly and the impact on them could be substantial. They should have diversified operations years ago beyond moving some of their older/cheaper device production lines to Brazil and India.

 

[MoreRumors?]

Apple goes where they need to be close by.

That would mean all offices would be in the west coast and in adjoining states.

 

[tromboneaholic]

Me thinks there are too many managers and not enough developers...

I guess you missed the news that Apple has been on a hiring spree the last couple of years picking up talent to develop new technologies:

 

[EvilEvil]

Another campus where ideas and innovation go to die.

 

[curtvaughan]

I have always said that Austin is the only place in Texas that I would consider living.

Don't they build some Macs in Texas? They are probably ramping up these facilities because they are going to be expanding manufacturing operations into the U.S. for more product lines. This is why the prices have been going up across the board on Apple gear. Do you guys think it's a coincidence that the Huawei exec was arrested and then suddenly Qualcomm gets a stop on iPhone sales in China? Apple is hedging their bets so they don't become a casualty of the economic trade war. I'm concerned that due to the scale of their operations they are reacting too slowly and the impact on them could be substantial. They should have diversified operations years ago beyond moving some of their older/cheaper device production lines to Brazil and India.

They've been manufacturing Mac Pros in Austin since 2013 (with introduction of the "trash can" model). I think they're still focused on the Mac Pro here. That will likely expand when the new facility is completed.

 

[TheRealTVGuy]

This seems great on the surface, but I'm concerned that the influx of Californians will have a negative impact on Texas' state capital, the health of the region's real estate market, taxes, and traffic. Plus, Austin has already lost a significant portion of its charm.

I hope we can find balance with this level of change.

It's already pretty bad in Austin and this will only continue to add to the problems of gentrification and insufficient infrastructure. Also, they don't pay "Austin, TX wages". Many of their employees in Austin transferred in from the west coast bringing their salaries with them. That's caused the housing market to skyrocket and for some on a fixed income to lose their homes because they can't pay the ever-increasing property taxes as their values climb. It's a very real concern.

 

[fathergll]

Smartphone growth is slowing in general. It's not a strictly Apple issue. But this call center isn't just to support iPhones. It will likely also support Apple Watch (that's growing) for example, and Apple's services that will probably be a $50 billion business this year.

I don't disagree with any of that. I simply commented earlier that iPhone growth has slowed and Apple has stopped reporting those metrics because of the negative impact to their stock.

 

[mi7chy]

Apple used to be more innovative out of a garage. Now they have multiple mega campuses rehashing the same products. How about a MacOS tablet with touch and pen input and detachable keyboard?

 

[Tonewheel]

It's great. You should consider moving if you don't like a healthy Austin.

It's become overrated, just like SXSW which is now just a cliche of it's former self. And the traffic...