The SoapBoxers

When I logged onto Facebook on Thursday evening, two of my friends has posted a link to an article proclaiming the great news.  Apple was going to bring 700,000 jobs to America – jobs that are now down by workers overseas (mostly in China).

The grand plan was to drop 70,000 on each of ten cities spread throughout the country.  By the end of 2013, all 700,000 jobs would be staffed.  Apple, a company that was fighting for its very existence just 15 years ago, would breath life into the economy and slash the unemployment rate from 8.3% to 7.8% – a tremendous amount of impact from just one company.

The news made sense for a few reasons:

• Apple’s never been one to follow the lead of other companies, often opting for unconventional paths.  Not only that, but with CEO Tim Cook out of the shadow of Steve Jobs, maybe Cook would make some decisions that Steve wouldn’t have.
• Apple has around $100 billion in cash and has a market capitalization in excess of a half trillion dollars.  That’s not a typo. Apple is the most valuable company in the world – and it’s not particularly close.  Oil giant Exxon Mobil trails by a hundred billion dollars – meaning that it is worth 20% less than Apple.  If Apple wanted to employ 700,000 workers in the US, it could afford to.
• Finally, Apple has been under fire for the working conditions at FoxConn, one of its major partners.  FoxConn is a large company that builds components for a lot of tech industry giants, but Apple has been the company taking the most heat.

I wasn’t born yesterday, however, so I hit Google and search for the news on other sites.  Nobody else was running the story.  That seemed odd.  Heck, Apple’s own site didn’t mention it.

Gotcha

Then I read the article more closely.  Really, 700,000 jobs by the end of 2013?  Was it even possibly to get factories built in that amount of time?  Sure, Apple could probably take over the facilities of some bankrupt companies and retrofit the facilities, but that still seems like a pretty aggressive timeline.

And the quote from the Chamber of Commerce seems a bit out of line:

“Just because corporations get the rights of American citizens doesn’t mean they should be burdened by the same responsibilities,” the statement said. “For example, everyone knows people can’t kill people — but sometimes job creators like corporations need to be able to kill people, as the Supreme Court is working on right now.”

So I look at the subject tags.  Yes, one of them was “satire”.  And in the comment, writer Shane Finnegan admitted that this was indeed a satirical piece.  And why not?  It’s his job to write satire for the Ocean Beach Rag.

Well played, Shane.

But why not?

Why doesn’t Apple, or some other tech company, bring jobs back to America?  It’s all about the money, of course.  Labor in China is far cheaper than in the United States, and there’s no hiding the fact that it’s also more expensive to comply with US safety regulations.

If there is ever a flood of manufacturing jobs back into the United States, tech companies will probably be the last ones to the party.  Why?  Because computers, TVs, and smart phones have a very high cost:weight ratio.  The cost of shipping an iPhone or a MacBook Pro from China is a tiny percentage of the cost of the item, so it’s really not that expensive to ship them.  Ramen noodles, on the other hand, have a low cost:weight ratio, so shipping them thousands of miles would be relatively expensive, percentage-wise.

At this point, there’s not much incentive for companies to bring jobs back to the US.  Sure, it’s what the citizens want, but the higher labor costs would make a company’s products much more expensive than those of their competitors.  At this point, I don’t see this changing at an point in the future, unless the government decides to make it prohibitively expensive to import the finished products.

On Wednesday, Apple announced that CEO Steve Jobs will be stepping down from that role.  Jobs has been battling health issues – including pancreatic cancer – for several years, so the move was not completely unexpected.

For most people, Steve Jobs IS Apple.  Co-founder Jobs was forced out of Apple during a 1985 power struggle with CEO John Sculley (whom Jobs had hired).  By 1997, Apple was in a death spiral and its stock was hovering around $13 per share.  At  the close of day yesterday, Apple’s stock has trading at $373.60.  That’s impressive enough – but there have been two stock splits since then, meaning that a single $13 share has turned into 4 current shares worth a total of $1494.40.  As a longtime fan of Apple products, it was great to see Jobs initiate such a dramatic turnaround.

The big question is how this will affect Apple long-term.  Will the company endure a  recurrence of Jobs withdrawal?  I think things will be different this time, and these are the reasons:

This separation is different – The separation in 1985 was far from amicable.  Jobs was essentially fired.  This is a very different situation, with Jobs continuing as chairman of the board, as well as an Apple employee in some capacity.  He’ll be around to mentor new CEO Tim Cook as needed.  Barring a dramatic downturn in his health, Jobs is not going to simply fade into the background – he’ll still represent Apple.

The company culture is different – When Jobs was forced out in 1985, Apple was a company with a lot of infighting.  The Apple II division and the Macintosh division considered themselves to be rivals, with the Macintosh division flying a pirate flag over their building.  There was no strong sense of direction.  In fact, the Apple IIe line was not discontinued in 1993 … nine years after the introduction of the Macintosh.  While I loved the IIe as a kid, the Mac was an exponentially superior product by the time 1993 rolled around.  At the time Jobs left, the company was just 9 years old – still not fully mature.

The company is more diversified – When Jobs took over in 1997, Apple basically offered just Macs.  Jobs streamlined the number of different Mac models (at the time, there were a large number of models being sold, creating confusion for customers).  Since then, Apple has branched out into new areas (iPod, iTunes, iPhones, iPad, etc).  This diversification makes the company less vulnerable to a downturn in a specific market.

In a nutshell, I expect Apple to continue to charge forward.  Tim Cook has been with Apple since 1998, had been serving as Chief Operating Officer, and was the man Jobs had hand-picked to succeed him.  I expect that Jobs will still be involved in a lot of design decisions, while distancing himself from the more “boring” types of work.

How Do You Like Them AAPLs?

If you had bought shares of Apple Computer (AAPL) in July of 1997, you would have paid $13 per share.  At the close of the trading day on Thursday, shares of Apple were worth more than $200.  Certainly, having an investment return fifteen times your original outlay twelve years later is a great return – it would be an annual rate of return of 25%!

That’s only a quarter of the story, though.  Apple’s stock has also had two splits (2:1 splits) during the timeframe – meaning that one share in 1997 is the equivalent of 4 shares in 2009.  Your original investment of $13 would actually be worth more than $800 today – a 40% annual rate of return.

Michael Dell, founder of the company that bears his name, when asked what he would do with Apple, once remarked “shut it down and give the money back to the shareholders.”  Apple’s market capitalization of $180 billion is now roughly six times that of Dell – and also more than that of IBM ($160B) and Cisco ($140B).  In fact, Apple’s market value is even approaching that of longtime rival Microsoft ($250B).

In 1997, Apple was on the brink of disaster.  The product matrix had become quite muddled, and the company appeared rudderless.  In the midst of the chaos, the company turned to co-founder Steve Jobs.

Jobs has co-founded Apple with Steve Wozniak (Woz).  Woz was the technical genius, while Jobs was the savvy salesman.  Jobs was forced out in a power struggle with CEO John Sculley in 1985.  Ironically, it was Jobs who had hired Sculley.  (So, what happened to Woz?  He left the company in 1986 and is heavily involved in philanthropy … when he’s not Dancing With the Stars).

When Jobs was booted out of Apple, he didn’t pout about it.  He took some cash and bought an animation studio from George Lucas for $10 million.  He took more cash and founded a technology company  – NeXT.  NeXT’s computers were technologically advanced – and very pricey.  NeXT eventually transitioned into a pure software company.  Apple bought NeXT in 1996 for $429 million.  Apple had been struggling with their next generation operating system, and NeXT’s NeXTSTEP technology served as the foundation for Mac OS X.

Shortly after Apple bought NeXT, the board of directors fired CEO Gil Amelio and hired Jobs as the new CEO.  The rest is history.  Jobs quickly discontinued many projects and supervised a new, more focused future strategy. 

Under the leadership of Jobs, Apple has launched wildly popular products such as the iMac, iPod, and iPhone as well as the cash cow iTunes Music Store.

While Jobs is a highly compensated CEO, it might be hard to find many investors who would complain about the cost of his leadership – clearly, the company has thrived during his tenure, and shareholders have reaped golden rewards.

And whatever happened to the animation studio that Jobs bought from George Lucas?  Disney bought that studio in 2006 for $7.4 worth of Disney stock.

The name of the studio?  Perhaps you’ve heard of it – Pixar.

Microsoft Windows 7

In an effort to confuse anyone who is trying to decode their product naming system, Microsoft launched Windows 7 on Thursday.  Old version, Vista.  New version, 7.  Yep, definitely a natural progression.

I’m also unclear on why this is Windows 7 when I can think of at least nine different versions (1, 2, 3, 95, 98, Millennium, XP, Vista, 7).

The strongest selling point of Windows 7 is that it is not Vista.

In Japan, Microsoft partnered with Burger King and introduced a product to help promote Windows 7.  I know what you’re thinking – a 7 patty Whopper.  You people have crazy imaginations – that would be just nutty.

I mean, yes.  That’s exactly it. A 7 patty, two thousand calorie burger.  And it doesn’t even come with cheese!

Today we introduce what I will call “Wednesday Wisps”. This is similar to the potpourri term I have used in the past, except that Wednesday Wisps uses alliteration to creep insidiously inside your brain. Wednesday Wisps will feature an assortment of very short news stories, opinions, or ideas – typically, not much more than 100 words.

How long until we can stop using the word “dial”? We don’t dial phone numbers any more – rotary dial phones are something that the younger generation isn’t even aware of (except for the popular toy for infants). I’m struggling to find a better term. “Enter the number” doesn’t seem to have the same panache.

PGA star John Daly sheared the roof off his RV and sent it flying into the path of an oncoming vehicle when he became confused by signs and hit a tunnel. The other driver suffered back and neck injuries, as well as damage to his vehicle. Just as Daly has started to get his life back to a semblance of normalcy, this happens.

Detroit city council member JoAnn Watson will be forced to pay a maximum of three years of back taxes after having the city correct its assessment of her house. Watson’s home had been re-classified as a vacant lot in 1999, and she had been pay $68 annually in property taxes since then. However, the law only allows the city to collect three years of taxes when a property has been incorrectly assessed. It has been pointed out that the absence of the $300 city trash fee should have been a red flag to Watson – since she had actively fought the fee. Watson believed that the property was reassessed after a tornado damaged the home, although no official records of the tornado can be found, and Watson did not file an insurance claim at the time of the tornado.

University of Georgia gymnast Courtney Kupets won the Honda-Broderick Cup, awarded annually to the top female college athlete in the US. Kupets, the winningest gymnast in NCAA history, won four individual titles at this year’s NCAA meet. More impressive is the fact that Kupets was able to bounce back from a torn Achilles tendon that cost her most of her junior season. Not only did Kupets recover from the injury, but she was able to compete at the very highest level.

Voting for Major League Baseball’s All Star Game, held in July, begins in April, when some roster slots are not even set. This is wrong. Delay the start of voting until June 1. With internet voting, anyone who wants to vote will still be allowed to vote. While you’re at it, change the limit from 25 votes per email address. Restrict the voting by IP address instead, to avoid having someone use multiple email address. I personally have more than a half dozen email addresses.

The smart phone war escalated, with Palm releasing their Pre model and Apple releasing their iPhone 3GS to legions of adoring fans. I personally am a “dumb phone” sort of guy, relying on a Samsung Slider – my data connection to the world consists solely of text messages from 4info.net.

Apple CEO Steve Jobs has begun working by email as he bounces back from a battle with pancreatic cancer. The charismatic Jobs, 54, received a liver transplant in April.

Reality stars Jon and Kate Gosselin – from TLC’s Jon & Kate plus 8 – have filed for divorce. This had been widely rumored for months.

Ed McMahon, longtime Tonight Show sidekick to Johnny Carson, and also the longtime spokesman for Publisher’s Clearinghouse, died at age 86. McMahon had suffered several health problems in recent years.