A previously quiet town in California, today Cupertino is synonymous with Apple in the same way that Redmond is with Microsoft, Compton is with rapper and Beats founder Dr. Dre, and Gotham City is associated with Batman.
A fascinating new article for the Columbus Dispatch reveals the double-edged sword of being a town so closely tied in with the rise-and-fall fortunes of a single company. While it’s certainly great when times are good, it also means that a major stumble could have major repercussions for the 58,000-person city Steve Jobs grew up in and called home.
With the long-awaited “spaceship” Apple Campus 2 set for completion in 2016, Cupertino’s reliance on Apple is only going to increase over the coming years. And one thing’s for sure: the once sleepy city needs Apple a whole lot more than Apple needs it!
Among the interesting factoids in the short article are the fact that Apple occupies around 60 percent of Cupertino’s commercial real estate, while also employing 40 percent of the city’s working population. On top of this, its $9.2 million taxes in 2012 provided Cupertino with 18 percent of its city budget. Since approving Apple’s plans for the Campus 2, Cupertino has attracted a new developer for a previously struggling shopping mall, in addition to two hotel developers.
Apple occupies around 60 percent of Cupertino’s commercial real estate, while also employing 40 percent of the city’s working population
These numbers won’t be a surprise for long-time Apple watchers, but it does underline the extent to which Apple is practically able to write its own terms when it comes to building a new campus or benefiting from other changes. Particularly when there are so many other places lining up to welcome Apple in.
During Steve Jobs’ June 2011 presentation to the Cupertino City Council, this was made crystal clear when Jobs was asked what Cupertino citizens could potentially gain from the futuristic headquarters.
“We’re the largest tax payer in Cupertino, so we’d like to continue to stay here and pay taxes,” Jobs said. “If we can’t [build our campus] we have to go somewhere like Mountain View and take our current people with us, and over years sell the land here, and the largest tax base would go away.”
The Columbus Dispatch article notes that Cupertino leaders have stressed the importance of diversifying the city’s economic base since 2011, although as yet unsuccessfully. While previously Cupertino was also home to a large campus belonging to Hewlett-Packard, this changed in 2012 after the company shrunk its workforce. The land then became the basis for Apple’s Campus 2.
Interestingly, the dilemma concerning third parties worried that they are too reliant on Apple isn’t limited to geographical locations. It’s a frequently heard concern from third-party Apple manufacturer, who try and balance their lucrative work for Apple with that for other companies as a way of creating stability should anything happen with Apple.
In the wake of last year’s GT Advanced Technologies debacle, Apple suppliers speaking to the Wall Street Journal noted the importance of keeping other customers on board for fear of Apple deserting them. “Apple always asks the suppliers to expand their manufacturing facility to meet the rush demand for its new product, but we have to make our own judgment as the big orders only last for a few months,” one supply manager was quoted as saying. “For example, Apple might want us to increase 100 production lines, but we would only add 50 to 60 gradually.”
It’s not so easy when you’re a city, though. Not for nothing does Apple not mention the city its products are designed in.