Friday 28 October 2016

Adrian Weckler: Times haven't always been this good, but Irish facility now finds itself at the top of Apple masterclass

Published 12/11/2015 | 02:30

Apple chief executive Tim Cook
Apple chief executive Tim Cook

It was a big job announcement from the world's biggest technology company. In one way, the firm's plan to create 1,000 new jobs here might have been expected. Because Apple's fortunes have long been reflected in the ebbs and flows of its Holyhill facility.

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And right now, the company is crushing its rivals. Apple sells 22,000 iPhones every hour, making almost €1bn a week in profit. It has largely seen off Samsung and other big competitors, amassing a separate cash pile of almost €200bn in the process.

Put another way, it's Tim Cook's world. We just live in it.

So it's no shock that the Cork plant, which handles manufacturing, sales, finance and customer support, is booming.

In the last 12 months alone, it has quietly hired an extra 1,000 people, bringing the workforce there to over 5,000. And now there's an additional 1,000 people to come.

It seems that the more business Apple does, the more business flows into Cork.

Times weren't always this good. In the 1990s, when Apple struggled against Microsoft and Dell, the plant stumbled with keeping jobs. After Steve Jobs introduced the iMac in 1998, it steadied the ship. But since the iPhone was introduced in 2007, the facility has been flying.

As for the jobs themselves, Apple isn't breaking any details out. But it's understood that they will broadly reflect the existing work divisions.

It's also understood that Apple did not get employment-related grants from the IDA.

In one sense, Apple's Cork facility remains something of a novelty: it is currently the only Apple-owned manufacturing facility in the world. It still makes iMacs there. (Apple plans to open its own plant in the US, but has yet to begin production.)

This near-unbroken manufacturing heritage has created something of a local masterclass ecosystem among the wider Apple group.

Local managers are now routinely sent to other manufacturing facilities around the world to help oversee the launch of new products.

This is the context against which Apple executives, including Mr Cook, handle questions around Apple's tax relationship with Ireland and the Irish Government. The company says that it is embedded for logistical reasons. It also suggests that this won't change if the European Commission hands down a ruling which compels the company to pay millions, or possibly billions, to Ireland in back taxes.

"As you can see from the jobs announcement, we're all in," Mr Cook told RTÉ's Paschal Sheehy. "If there's an adverse ruling against us then we'll appeal… There was no deal [between Apple and the Irish Government on tax]."

This echoes what the Government here is saying.

"From an Apple perspective and an Irish Government perspective, the announcement shows that whatever controversy there is around Apple's tax status it hasn't affected their enthusiasm for Ireland and they're continuing to invest here," said Finance Minister Michael Noonan yesterday.

Tax aside, will good industrial times remain at the company's Cork facility in the future? Will Apple continue to come up with new products that capture the world's imagination?

The company is currently making some big bets on new product areas. Chief among these to date has been its smartwatch (called 'Watch'). Although it currently outsells rivals, the Watch has yet to hit sales heights seen by Apple's other products.

It also harbours significant plans for televisions. Its current product, Apple TV, is aimed at bringing TV viewing closer to an app-focused world. In the long run, it may want to create its own Netflix-style service.

And Apple's newest iPad, the 13-inch iPad Pro which went on sale in Ireland this week, is aimed at reversing the overall fall in tablet sales in the US and Europe.

The company even reportedly has plans to make its own electric car. But for now, Cork can bask in Apple's continuing dominance.

Irish Independent

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