Apple threw shade at Amazon's HQ2, calling it a 'beauty contest,' but then it did the same thing

  • Apple on Thursday announced a new campus in Austin, Texas, it said would support more than 5,000 employees.
  • Unlike Amazon’s HQ2 process, Apple stayed quiet while choosing the location for its new offices, and CEO Tim Cook said he didn’t want it to be a “beauty contest.”
  • But Apple ultimately did the same thing as Amazon – choosing to expand in a rich, highly educated area where it already had thousands of employees.

Some news from Apple on Thursday morning: It’s expanding! In a midnight press release, Apple said it was building a new campus in Austin, Texas.

Details about the new Apple office complex include:

  • An investment from Apple of $US1 billion.
  • A location in Williamson County, Texas, just outside Austin.
  • 5,000 employees to start.
  • Room for as many as 15,000 employees in divisions including research and development, finance, sales, and customer support.
  • Incentives from Texas include as much as $US25 million in taxpayer-funded grants and a 15-year property-tax abatement possibly worth tens of millions of dollars, according to the Austin Statesman.

Apple teased the new campus back in January. “The company plans to establish an Apple campus in a new location, which will initially house technical support for customers,” Apple said in a press release. “The location of this new facility will be announced later in the year.”

Apple CEO Tim Cook tried to contrast Apple’s search with Amazon’s search for a spot for a new headquarters, known as HQ2, which drew international headlines.

“We’re not doing a beauty contest kind of thing,” Cook said in March. “That’s not Apple.”

Apple further distanced itself from Amazon’s publicity-heavy approach by announcing its decision with a press release at 2 a.m. CT.

Still, the two campus-selection processes have significantly more in common than Apple would like to acknowledge.

The two companies basically did the same thing. They announced they were building a new office and got municipalities to come to them with various incentives, grants, and waived taxes. And then ultimately, both companies chose areas where they already had major operations.

Apple’s biggest campus outside Silicon Valley is its existing Austin campus, which is about a mile from this new development.Apple has such deep history in Williamson County that it sparred with elected officials back in 1993 over whether it could offer health insurance and other benefits to same-sex couples who worked at Apple. (Apple ended up getting $US1 million in tax incentives to build its first Austin campus.)

“At 6,200 people, Austin already represents the largest population of Apple employees outside Cupertino,” Apple said in its Thursday press release.

Apple’s process for choosing its new campus turns out to be pretty similar to Amazon’s HQ2 process, in which the company founded by Jeff Bezos got scores of cities and counties to offer it packages of various incentives, only to turn around and settle on New York City and Northern Virginia – rich, educated, urban areas where it already had huge operations.

Ultimately, the differences between the two processes are mainly surface-level. Yet they illustrate differing goals the two companies had for their new offices.

Both companies are growing prodigiously, making it unsurprising they would pursue new offices for their swelling workforces. But while Amazon appeared interested in improving its incentives packages as well as in collecting information to inform its future expansion, Apple’s goals were more political.

Apple first revealed its new campus back in January as part of an announcement after it received $US38 billion in tax benefits stemming from the new Republican tax law.

In what seemed to be a quid pro quo to Republican politicians and President Donald Trump, Apple said in its announcement that it planned to spend $US350 billion in the United States and create 20,000 jobs – talking points that Trump and his administration repeated. Tucked into that announcement, Apple said it would announce in 2018 an “Apple campus in a new location.”

Much of Apple’s January announcement was centered on money it would have spent and jobs it would have created anyway – and this new Austin campus is no different. Apple needs more US-based call centres to maintain its high level of customer support, so it would have had to build them eventually.

By calling an expansion in an area where it already employs thousands a “new campus,” Apple gained goodwill from politicians and some key tax breaks.

Ultimately, that’s not too different from what Amazon did.


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