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Steve Jobs' Requirements for 'Fit and Finish' Leading to Massive Cost Overruns for Apple's New Campus
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Awesome, money be damned. As sleek and sexy as any apple product. Unfortunately, everything is glued and soldered together in such a way that they'll have to build another one when they need to upgrade. 
Okay let's take a step back and look at the article again. I think it mentioned that the new WTC is gonna cost $3-4Bn. That's not cheap either. And given that America's national reserve has less money than Apple's bank account, why isn't anyone complaining about the massively expensive WTC?
Added: Given that Apple is richer and they are also constructing a building that may end up as a national monument just like the new 1WTC, why couldn't these two buildings be seen in the same light and be celebrated?
Added: Given that Apple is richer and they are also constructing a building that may end up as a national monument just like the new 1WTC, why couldn't these two buildings be seen in the same light and be celebrated?
My bad, but nonetheless taxpayers' money will still be used. That's just like Apple using shareholders' money to build their new HQ isn't it?
Exactly! This is how much of a non issue this really is, for example:
- If Apple has about $140 billion, then $5 billion is about 3.5% of that.
- For someone who makes $8 per hour, 3.5% of their yearly gross income is about $582.5.
- You would be lucky to build or renovate your home for less than $600. The cheapest Mac right now is $599.00
I hope Apple isn't fretting over the relative cost of a Mac Mini to the average, minimum wage-ish person, when they need to preserve one of their founder's visions and invest in their future.
It's gonna happen eventually, just give it a big scratch now, and you won't have to baby it anymore.
I'm not suggesting you pick it up and drop it. You'll probably have to find a rifle to make mark on that glass. I do wonder how thick that glass is.
Maybe if Apple had pre-ordered 12km^2 (6 for the outside, 6 for the inside) of screen protector plastic, Wrapsol wouldn't be going out of business.
Sorry but that is a 100% load of c.r.a.p. I've been in many Frank Gehry, Frank Lloyd Wright, and I.M. Pei creations, all of which are ever more creative and "Amazing," than Apple's smoothed out copy of the Pentagon proposal, and all of which used standard, at the time built, construction techniques.
I'll take Prague's dancing building over Apple's pedestrian spaceship any day. And if Apple engineers need 1/32 joints to be innovative then they are not as top notch as we believe they are.
$1b of the funding is recouped from insurance, another $1b is from the sale of bonds from the Port Authority, some $250m from the state of New York, the rest will mostly be from private equity firms.
With regards to federal tax dollars, there isn't much. The US Govt has made nonbinding commitments to lease office space in the new building, but no direct large payouts.
The WTC Complex isn't a federal building, so the US Govt wouldn't be footing the bill anyway. Even if it were, most of the cost would be recouped in the same manner: insurance, bonds, and private equity investments.
Just get on with it.
In a day and time when most companies are no longer brick and morter, in that they build and own their own buildings. Everybody wat's to lease space which is bull **** and shows no one is committed anymore.
To me it is refreshing to see a company who is doing what has made them a success and they have the cash, they will sign a check and OWN their digs.
Good for you Apple, do your thing, it's the reason I buy your products. Complaints come from people who don't see how much better your lif can be by getting rid of all this PC and Android mess out there. I like my life to be simplified and love great design. It is truly a tough time to as when it is rare.
In a day and time when most companies are no longer brick and morter, in that they build and own their own buildings. Everybody wat's to lease space which is bull **** and shows no one is committed anymore.
To me it is refreshing to see a company who is doing what has made them a success and they have the cash, they will sign a check and OWN their digs.
Good for you Apple, do your thing, it's the reason I buy your products. Complaints come from people who don't see how much better your lif can be by getting rid of all this PC and Android mess out there. I like my life to be simplified and love great design. It is truly a tough time to as when it is rare.
It's used/sold for another project where the requirements are not as high. Heartwood is usually used in quality wood windows, as the lifespan of a window is much higher when you use heartwood, than the cheaper non-heartwood portions of a tree. Of course you don't just discard the rest of the wood...that would just be stupid. And it's not like wood expires the next day...
Are you arguing that new things should start out in poor condition so they have less far to deteriorate?
You're misunderstanding me. I'm not saying they should double folks salary. I'm just saying that this fancy HQ is a somewhat roundabout way to make the employees happier. Larger salaries would presumably have a larger effect and could be done with the money getting spent here. About 12,000 employees are expected to work in this HQ, so a billion dollars would roughly allow you to give each 100,000. Or $10,000 every year. The employees would probably go for the cash over slightly more polished concrete ceilings. But I'm not suggesting Apple do this. The HQ sounds neat and it is a good display of corporate culture of excellence.
Now as for Einhorn and the cash. There is in fact evidence that Einhorn is right and cash is not being valued. Apple currently holds about $140B to $150B in cash (remember the $137B was as of December 31, they have well blown by that number by now). We will know actual number for March 31 in a few weeks. In any case, the company is trading today at a market cap of $401B. If you assume the market values that cash one for one, then you get the business ex-cash value as 401 - 145 (I'm going to go with the middle of my range) = $256 billion (I'm going to exclude the impact of taxes for simplicity). Now the analysts and Apple indicate that revenue is growing so let's assume revenue is going to be about $50 billion this year (revenue was $41 billion last fiscal year ending Sept 30, and we already have the results from the blowout Christmas quarter). So we are left with the ridiculous notion that Apple is trading at an ex-cash price of less than 6 times its earnings.
You really have only three options, either the market is not valuing the cash (because it will be wasted and not returned to shareholders or productively invested) or the market is expecting a huge retraction in Apple's earnings in the next couple of years. Or some combination of the two. I think it is some combination of the two, with a heavy weight on wasting large amounts of the cash. My evidence is the low low stock price. If the stock price does not rise, this will be even more obvious once the cash pile is publically updated for the current quarter.
The argument about having the cash "weather a financial downturn" without running out of cash is nonsense when we are talking about this size of cash and a company as profitable as Apple. The only way to spend this amount of cash is to acquire a company like Facebook or Google. And any such huge acquisition should get funded by a stock swap anyway. You would not normally ever spend cash on a large acquisition like that. And if you are suggesting that you think eventually the cash will be used for an acquisition, then the market is right to not value the cash. Because you are saying that this cash will not go to Apple Shareholders, it will be given to the shareholders of some other company in that acquisition. Perhaps Apple is actually holding that cash for Mark Zuckerberg and neither he nor they know it yet.
You apparently seem to have nothing more than a novice understanding of this project. That, or, you're just being lame and trying to complain for the sake of complaining.
I recommend you actually do a little research about the design before making further comments on architecture and construction.
If you think that 1/32 represents style or design, you don't understand architecture OR construction. 1/32 represents Job's perfectionistic tendencies.
I've heard a lot of things said about this building, things like.. unique, Steve's vision, something architects in the future can borrow from, a work of art and on it goes. I have only one thing to say... GCHQ. It may differ slightly and look a little more sleek but really, Apples new HQ is neither that groundbreaking or that unique.
Wretched Excess...
Here's another viewpoint & some facts on the excessive amount of money being spent.
"Since 2011, the budget for Apple’s Campus 2 has ballooned from less than $3 billion to nearly $5 billion, according to five people close to the project who were not authorized to speak on the record. If their consensus estimate is accurate, Apple’s expansion would eclipse the $3.9 billion being spent on the new World Trade Center complex in New York, and the new office space would run more than $1,500 per square foot—three times the cost of many top-of-the-line downtown corporate towers."
And some think Larry Ellison is an egomaniac...
source: http://www.forbes.com/sites/timwors...apples-new-headquarters-spell-doom-for-apple/
Here's another viewpoint & some facts on the excessive amount of money being spent.
"Since 2011, the budget for Apple’s Campus 2 has ballooned from less than $3 billion to nearly $5 billion, according to five people close to the project who were not authorized to speak on the record. If their consensus estimate is accurate, Apple’s expansion would eclipse the $3.9 billion being spent on the new World Trade Center complex in New York, and the new office space would run more than $1,500 per square foot—three times the cost of many top-of-the-line downtown corporate towers."
And some think Larry Ellison is an egomaniac...
source: http://www.forbes.com/sites/timwors...apples-new-headquarters-spell-doom-for-apple/
Haha- well, at the risk of going off topic for a moment, that statement sounds like business school brainwashing to me. The things they teach you so you don't mind treating the workforce of your company like crap.
Working in the visual effects and film business (which is currently imploding right now if you read up about it) I see your words and it seems like something a film executive who went to business school and not film school would say to the underpaid and overworked artists who are working their ****** off to make him rich.
Sure most artists years ago died pretty much poor and destitute. Do you believe thats a good thing?
Sorry for straying off topic but artists are tired of being treated like ****.
Kind of like Laureen's yacht - 100+ million and has to be ferried across the Atlantic on top of another ship.
Apologies, I genuinely thought you were being deliberately narky for the sake of it. At the end of the day, Apple have the cash reserves to build this thing to spec. If they want to build it in Steve's exact spec then so be it. My genuine thoughts is that Tim will likely, eventually, order the cutting of a few corners to save some of the cost.
Blame Lord Foster since its his design. Anyone who believes Steve Jobs dreamed this up himself is delusional.
Given that apple has spent the last few years pushing the entire architectural glass industry forward by leaps and bounds (meaning, making the biggest glass panels ever created), this building in its construction alone is going to be a massive push forward for glass innovation.
Take a look at the renders, the entire face of the building is huge curved glass. So big that companies in China have been working with Apple just to figure out how these are going to be made. The thing about being the leader into a new field of manufacturing is that you pay alot up front, but market forces then quickly make prices drop and the entry barrier is lowered for everyone.
Think of this campus as Apple being to the glass industry what Germany was for the solar panel industry (an industry that finally broke loose after Germanies massive investment, thus allowing solar panel price to begin plunging around the world).
Really.... Large curved glass, that's the big innovation, that what sets it apart and makes it [insert overhyped description of choice here]. I'm pretty sure the glass industry is doing fine at the moment and I'm almost certain that one building project by Apple isn't going to cause the glass industry to "break free" and to suggest that is quite frankly ridiculous. Don't get me wrong here, I think it's a stunning looking building as are many of Lord Norman Fosters (notice I didn't say Steve Jobs) buildings. His work with both glass and curves is beautiful to look at and in some cases quite minimalist which fit's well with Apples image. The Apple building though while beautiful is still neither that groundbreaking or that unique.