Business

Bloomberg:

Apple Inc. was ordered to repay a record 13 billion euros ($14.5 billion) plus interest after the European Commission said Ireland illegally slashed the iPhone maker’s tax bill.

The world’s richest company benefited from a “selective tax treatment” in Ireland that gave it a “significant advantage over other businesses,” the European Union regulator said Tuesday. It’s the largest tax penalty in a three-year crackdown on sweetheart fiscal deals granted by EU nations.

And:

Apple and the Irish government have both vowed to fight the decision, which also risks stoking a fight with the U.S. over taxation policies — with the U.S. having already complained that Europe is unfairly targeting American companies and threatening global tax reforms.

And:

“I disagree profoundly with the commission’s decision,” said Irish Finance Minister Michael Noonan. Ireland’s tax system is founded on the strict application of the law “without exception,” he said.

The commission left him with “no choice” but to move toward an appeal before the EU courts. “This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state-aid rules into the sovereign member state competence of taxation,” he said.

This will certainly add pressure to the unity of the EU, still working through Brexit terms. If the European Commission ultimately prevails, I can’t help but think it would impact Apple’s operations in Ireland.

Neil Cybart:

The two most powerful people at Apple are Tim Cook and Jony Ive. While Cook is tasked with making sure the Apple machine is being run by the best team possible, Jony’s role is much more abstract.

And:

However, the one area Cook does not have complete control over is product strategy. That distinction belongs to Jony. It may seem hyperbolic to consider Jony the most powerful person at Apple. He no longer spends much time managing anyone on a day-to-day basis. He doesn’t speak on Apple’s earnings conference calls. Wall Street knows very little about him, and neither does Silicon Valley. In fact, following his recent promotion to Chief Design Officer, Jony doesn’t even spend as much time at Apple HQ these days. Yet Jony has such a significant influence over Apple’s product strategy, it is safe to say we are firmly within the Jony Ive era at Apple.

And:

Jony holds an incredible amount of power because Apple is a design-led company. Apple’s functional organizational structure and culture are set up in order to give the Industrial Design (ID) group absolute power. ID holds more power at Apple than any other group.

And:

Much of the criticism pointed towards Apple today is a by-product of Apple executives doubling down on Apple’s design-led philosophy. The logic behind the move is pretty clear: The strategy works. Jony, Richard Howarth, VP of Industrial Design, and the rest of the ID team have more power today than at any other point in Apple history. Jony grabbed additional power during the first major management reshuffle under Tim Cook in 2012. His promotion to Chief Design Officer in 2015 reflected Jony receiving even more control. In fact, Jony has so much control, he now is able to spend more time away from Apple HQ (which I suspect is related to Project Titan).

Really interesting piece, full of specific examples.

From the just-released report by China Labor Watch:

Pegatron is one of Apple’s major suppliers, employing almost one hundred thousand workers3 in Mainland China. Working conditions are terrible, and workers are subject to terrible treatment. Currently, Apple’s profits are declining, and the effects of this decline have been passed on to suppliers. To mitigate the impact, Pegatron has taken some covert measures to exploit workers. This report is based on interviews with Pegatron workers and a comparative study of 2015 copies of paystubs collected in 2015 and 2016. Through our investigation, we have found that Pegatron has taken some surreptitious measures to pass Apple’s audits. In addition, we discovered that Pegatron’s working conditions have worsened in 2016 compared to 2015.

And:

Excessive and illegal overtime work is still prevalent in Pegatron. Pegatron claimed that their ID check system could effectively control workers’ overtime hours, but this system did not have any effect in the departments where more overtime was needed. It is merely a tool for public relations. Paystub records reveal that the highest amount of overtime hours put in by a worker was recorded in March, which was a worker with 109 overtime hours. The worker was found to have put in a total of 293 hours of work in March.

And:

Pegatron has recruited many student interns, who had overtime work amounting to 80 hours per month on average. This is roughly the same amount as full-time employees. However, the Chinese law forbids companies from asking interns to work overtime.

And:

Workers are exposed to potential occupational injuries without proper protection. For example, in departments that have noise and the use of lasers, the factory does not provide them with protection equipment.

There is a lot more.

Bloomberg:

Apple Inc., seeking to capitalize on the popularity of social networks, is developing a video sharing and editing application and is testing new related features for its iPhone and iPad operating systems.

The early plans are part of a newly directed focus to integrate social networking applications within Apple’s mobile products and are a response to the success of social media-focused companies such as Facebook Inc. and Snapchat Inc., according to people familiar with Apple’s strategy. An Apple spokeswoman declined to comment.

And:

Now Apple is starting to develop a video sharing app that allows users to record video, apply filters and drawings to the media — much like Snapchat does — and send it to contacts or via existing social networks such as Twitter Inc., according to the people familiar with its development. The software is currently being designed to be used mostly with one hand and with the intention that video could be shot, edited, and uploaded in less than 1 minute, the people said. At least one of the prototype designs for the app would shoot video in an Instagram-like square shape, one of the people said.

It’s easy to be skeptical when you read Apple and social in the same sentence. Brings back memories of Ping and Connect and the potential of what could have been. But photo and video have long been in Apple’s sweet spot. Getting social right is tough, a bit like catching lightning in a bottle.

No matter, if and when this emerges from the secret lab, sign me up.

New York Times:

The words are stenciled on the front of the Apple Store, a glass box sandwiched between a nondescript Thai restaurant and a CVS pharmacy in downtown Palo Alto: “This store runs on 100 percent renewable energy.”

If Apple’s plans play out, it will be able to make that claim not only for its operations throughout California but also beyond, as the company aims to meet its growing needs for electricity with green sources like solar, wind and hydroelectric power.

And:

The motives may be economic as much as they are environmental. As a wholesaler, Apple could reduce the cost of its electricity load, which reached 831 million kilowatt-hours in the last fiscal year — enough to power about 76,000 homes for a year. But like a growing number of corporations, Apple is intent on reducing carbon dioxide emissions from electricity production — one of the biggest sources of greenhouse gases that contribute to global warming.

If Apple can run all its operations, all of them, on 100 percent renewable energy, that would set the bar for all other companies. If one of the largest companies in the world can do this, you should do all you can to reach this level as well.

MacRumors:

Upon reaching the five-year mark, Cook has today unlocked previously awarded stock bonuses currently worth over $100 million. The bonuses are tied to both his tenure and Apple’s performance under his leadership, including its total shareholder return relative to the S&P 500 index.

Cook’s bonus includes 700,000 tenure-based restricted stock units that vested today as part of a larger compensation package of over 4.7 million shares awarded on August 24, 2011, in addition to his first of six annual installments of 280,000 tenure-based restricted stock units that vested today. The combined 980,000 shares are valued at nearly $106.7 million based on AAPL’s closing price of $108.85 on Tuesday.

Helluva day for Mr. Cook. Buy yourself something nice.

Terrific piece from The Telegraph, an objective look at Apple then and now, from Tim Cook’s first day as CEO through today, with lots of charts and infographics that really tell the tale.

Five years ago today, Steve Jobs officially passed the CEO torch on to Tim Cook. From the Wall Street Journal:

Now Apple is the world’s largest company by market value and remains one of the most influential. Its $53 billion in net income last year was greater than the combined earnings of technology behemoths Facebook Inc., Google’s parent Alphabet Inc., Amazon.com Inc. and Microsoft Corp. Apple recently sold its billionth iPhone.

Let that soak in. These are amazing accomplishments, proud laurels for any CEO, especially when you consider that Apple has, at the same time, fought harder than most large companies for social and environmental change.

At the same time, though, Apple’s growth is slowing, its stock is stagnating and it is facing more concerns than ever about its future. Underscoring all of this is one key question that Mr. Cook will likely never escape: Are Apple’s best days behind it?

That second paragraph is indeed key. Not the question, but the phrase “will likely never escape”. Five years in, and Tim Cook is still looked upon suspiciously, as an interloper riding on Steve Jobs’ coattails. Sadly, for many, that will never change.

Fast Company:

Silicon Valley-based Gliimpse has built a personal health data platform that enables any American to collect, personalize, and share a picture of their health data.

And:

The acquisition happened earlier this year, but Apple has been characteristically quiet about it. The company has now confirmed the purchase, saying: “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.”

And this from founder Anil Sethi’s LinkedIn page:

As a consumer of healthcare, I leave behind a bread-crumb-trail of medical info wherever I’ve been seen. But, I’m unable to easily access or share my own data. Obamacare is one of several forcing functions federally mandating physicians and hospitals give us our data: meds, labs, allergies . . .you get the idea. However, there’s no single Electronic Health Record that all physicians use, sigh. Worse, there isn’t even a common file format across a 1000+ systems.

Enter Gliimpse: your personal health data, in the palm of your hands. Better than portals, we enable patients to collect their lifelong history, so they can share it with their care network – physicians, friends and family.

Wall Street Journal:

With Apple’s sales tumbling, the Chinese government’s support waning and a new iPhone coming out, Mr. Cook is on a goodwill mission: meeting with government officials, touring Chinese Apple stores and speaking with local residents. Mr. Cook pledged to increase investment in China in a meeting with Vice Premier Zhang Gaoli in Beijing on Tuesday. He continued to the central Chinese city Chongqing on Wednesday, where he toured an Apple store with the mayor.

Side note: Chongqing is one of the five Chinese national central cities. An important place for Tim Cook to visit.

Top Chinese leaders have expressed concern over declining iPhone sales. At a meeting in May between Chinese Premier Li Keqiang and technology executives in the southern Guizhou province, Mr. Li had only one question for Terry Gou, the chairman of Apple’s main contract manufacturer Foxconn Technology Group, according to people who attended the meeting.

The premier asked Mr. Gou if production this year would decline. After trying to deflect the question, Mr. Gou confirmed that “the general trend” was downward, the people said.

This Chinese trip is obviously an important visit and comes at a critical time for Apple.