Is Supporting Apple an Act of Patriotism?

iphone 6Yes, I believe it is and let me explain why. Apple is the last remaining American cell phone company – so I really want them to succeed. (Motorola is now Chinese owned) I know you’re going to say “but, but, but, their phones and computers are made in China so they’re not American”. Nonetheless, they have a massively large employee footprint here in America and the Average Apple employee makes far above average wages not to mention all the money they spend building Datacenters and corporate offices RIGHT HERE IN THE GOOD OL’ USA. Their products are engineered, designed, developed all in the U.S.A.

Can you name one other company where people line up to three weeks in advance to buy their products? personally I think they are nuts but more power to them. They seem to have a good time and who am I to criticize how other people choose to spend their time or money. The point is that no other company has managed to elicit that level of excitement and enthusiasm. Apple Keynote events are more like rock concerts with the applause than tech shows.

So yes, I am proud that they are succeeding over Asian rivals which not long ago was thought to be an insurmountable task for any American tech company.

 

A Few key Stats

598,509 U.S jobs created or supported by Apple

 

These jobs — spread across all 50 states — include thousands of jobs in numerous industries, from the people who create components for our products to the people who build the planes and trucks that carry them to our customers. For example, this figure also includes workers in Texas who manufacture processors for iOS products, Corning employees in Kentucky and New York who create the majority of the glass for iPhone, and FedEx and UPS employees. Together with the 291,250 iOS jobs generated by the app economy, these 307,250 jobs make a total of 598,500 U.S. jobs created or supported by Apple.

The number of Apple jobs based in the U.S. has more than quadrupled over the past decade, from less than 10,000 employees in 2002 to more than 50,250 today. That number more than doubles again when we include vendors that employ more than 50,000 people who directly support Apple. These jobs require people with a wide variety of skills — including construction workers, component manufacturers, retail specialists, tech support representatives, salespeople, marketers, and the best hardware and software engineers in the world.

Apple has 250 retail stores in the U.S. average over 100 employees each — the majority of whom are full-time employees. But unlike most retailers, they don’t rely on seasonal hiring. And part-time Apple Store employees are eligible for the same benefits as their full-time staff, including health insurance and the employee stock purchase plan.

The iPhone 6 just beat the Galaxy Note 4 where it hurts most: South Korea

According to numbers dug up by The Wall Street Journal, Apple sold more than 100,000 units in the first day of iPhone 6 preorders in Korea, significantly above the 30,000 Galaxy Note 4 units Samsung sold during the same period of time a month ago when the latest Note phablet launched in Samsung’s home country.

Carrier KT confirmed it sold more than 10,000 iPhone 6 orders in one minute on Friday, with orders topping 50,000 after 30 minutes. LG U+ sold 20,000 iPhone 6 units within 20 minutes. SK Telecom would not mention any numbers, but said that the first and second batch of presale orders have been booked, with a third round having started on Monday.

Think about that for a second. An American tech company is beating a Korean tech giant like Samsung in KOREA! That is pretty astounding and should give everyone a patriotic tingle down their spine.

IBK Securities analyst Lee Seung-woo said that Samsung may lose the only advantage it has in the smartphone business now that Apple has larger phones in stores, including a phablet of its own. Lee expects Apple to sell five times more iPhone 6 and iPhone 6 Plus units than Samsung’s Galaxy S5 and Galaxy Note 4 pair during the Christmas quarter. In the second quarter, Samsung had 63% of the smartphone market share in the region, 10 times higher than Apple’s 6% share.

Samsung Galaxy Note 4 delivers poor graphics performance vs. Apple iPhone 6 Plus

While boasting an “Octa Core” Application Processor option and an extremely high resolution display, Samsung’s new Galaxy Note 4 falls flat in running GPU intensive apps and games—particularly in comparison to Apple’s iPhone 6 Plus.

The first benchmarks showing off the actual performance users will get from the new Note 4 highlights that Samsung appears to be making the wrong engineering choices, and that the conventional wisdom about Samsung’s advantages in operating its own chip design and fab are also wrong. No wonder Korean consumers are starting to prefer the iPhone over Samsung.

 

https://twitter.com/DanielEran/status/517271287102967808/photo/1

Fun Number: Apple’s iPhone 6 Is, Alone, Major Impact On All US Economic Growth Apparently

Since Sept. 19, when the iPhone 6 and its larger sibling, the iPhone 6 Plus, went on sale, consumers have been ordering the gadgets faster than Apple AAPL -0.16% can deliver them. The ripple effects are being felt throughout the economy — and they have been moving the stock market.

“The iPhone is having a measurable impact,” said Michael Feroli, the chief United States economist for JPMorgan Chase JPM -0.07%. “It’s a little gadget, but it costs a lot and it seems that everybody has one. When you do the multiplication, it’s going to matter.” He estimates that iPhone sales are adding one-quarter to one-third of a percentage point to the annualized growth rate of the gross domestic product.

According to International Business Times “Before the iPhone 6 release date this year, analysts have forecasted that at least 60 million units will get be grabbed before the close of 2014. The sales prediction was going as high as 80 million though it remains doubtful if Apple would be able to produce that much.”

In reality it is impossible to say how much Apple or the iPhone effects an economy as large as the Unites States but to have an impact at all is an amazing accomplishment that should make any American proud.

 

But What About Their Tax Avoidance?

Apple_American_Logo_01_230pxThis is another complaint I often hear from Apple detractors. Apple actually is paying more taxes to the U.S. treasury than any company not selling oil. They are #3 on the list just behind Exxon Mobil and Chevron. Apple recorded one of the largest tax expenses in the nation in its most recently reported fiscal year, at more than $13 billion. The U.S. has the highest corporate tax rate in the developed world. After Japan lowered its tax rate last year, the combined federal and average state tax rate of 39.2% in the U.S. was the highest of any nation in the Organization for Economic Co-operation and Development.

Here are just a few that pay nothing or receive credit back. 

General Motors, which had annual revenue of more than $150 billion, received a tax benefit of $28.6 billion. 24/7 Wall St. examined the 10 U.S.-based, publicly traded companies with tax expenses of more than $5 billion in their most recently reported fiscal year, and the 10 companies that received a benefit of at least $5 million.

Some companies pay little or no tax at all or even receive money back. Bunge, a global agribusiness company, reported $372 billion in earnings before taxes in fiscal 2012, but the company actually received a tax benefit that year of $6 million. If the company had assessed all of its income based on the federal corporate tax rate of 35%, it would have had $130 million in tax expenses. However, 42% of Bunge’s total pre-tax income comes from operations overseas, on which the company pays cheaper foreign corporate tax rates. Also the company received over $50 million in fiscal incentives for its investments in Brazil.

Rite Aid, one of the country’s largest pharmacy chains, had more than $25 billion in revenues in its most recent fiscal year but just $8 million in earnings before taxes. Between a decrease in deferred taxes and a number of tax credits received, the company actually reported a total tax benefit of nearly $111 million.

Global investment bank and brokerage house Morgan Stanley reported revenue in excess of $26 billion and had just over half a billion in pre-tax income in fiscal 2012, it’s most recently reported fiscal year. However,  at all. In fact, it reported a tax benefit of nearly $240 million that year. Bank of America reported more than $3 billion in income before taxes in its most recent fiscal year. However, the banking giant received a tax benefit of more than $1.1 billion that year. Helping the company save moneywerea combination of tax-exempt income, U.S. tax credits and, especially, a whopping $1.7 billion in foreign tax credits received by the bank.

So with Apple being #3 in the country and paying $13 billion in taxes I hope we can put the argument that they are tax evaders to rest. Do they use loopholes to lower their tax burden? Absolutely and if they didn’t they would be hurting their company and their shareholders since every other company use this loophole.

Why Does Apple Succeed While Other American Tech Companies Fail?

You can point to many American software tech companies for success, but in the arena of consumer electronics and hardware that becomes a very small list. Time magazine created a list of the 6 reasons Apple succeeds back in 2012 that is still valid today with the success of the iPhone 6.

1. For any product that Apple creates, the people who create it have to want it themselves
So many times with projects I do with other tech companies, the goal is almost always based around the technology first, followed by whether or not people really want to use it. Geeky engineers are dazzled by the technology at their disposal and often create something because they can. But Apple’s approach is quite different. The engineers who are creating Apple products actually make them for themselves. And Jobs was the chief “user” of Apple products when he was alive. All of Apple’s products are based on the fact that Jobs represented the real customer. And his engineers had to come to grips with that when designing a product. It has to be something that they personally couldn’t live without.

2. The products have to be easy to use
Jobs was a stickler on this point. While industrial design is a critical component of any product Apple makes, if it is not easy to use, it is considered worthless to the consumer. This is what drove the company’s user-interface designs from Day 1 and is still the mantra pushed to the software and hardware engineers every day they go to work. All of the products they create have to be intuitive and easy to understand and learn. As technology has become more intricate and users want more features, the task of keeping things simple is sometimes difficult. And Apple creates tools for power users and rookies, which can mean a broad range of ease-of-use issues. But even with that, Apple is the only company I deal with where ease of use is more important than the product itself. Apple makes this a critical goal of its approach to creating anything for the market.

3. Keep things simple

Yes, there are tech-savvy people who like more choices and sometimes even like complexity, but from years of experience as a market researcher, I can tell you that in the end, the majority of users are not tech-savvy, and keeping things simple for them is a plus. This makes buying an Apple product simple. And consumers seem to appreciate this considering the huge number of iDevices that are sold each year. I know the tech media and techies are the most vocal about this issue of choice, but in the end, while choice is good for competitive pricing, what nontechie consumers really want is simplicity.

4. Offer great customer service and in-store experiences

Admittedly not everyone lives within easy reach of an Apple Store, but for those who do, anyone can wander in, ask the dumbest question and get individual help, free of charge. Compare that to attempting to get help with a Windows laptop or Android phone, and there is just no comparison.

5. Apple only makes a product if Apple can do it better
Apple normally doesn’t invent a new product or product category. Sure, the company did invent the first commercial PC with the Apple II, and the Mac improved on PCs with a graphical user interface and mouse input. But since then, all of Apple’s other products have been recreations of existing products. Apple did not invent the MP3 player; Apple reinvented it and made it better. Apple did not invent the smart phone; Apple reinvented it and made it better. And Apple did not invent the tablet; Apple reinvented it and made it better.

As Apple designer Jonathan Ive said recently, “Our goals are very simple — to design and make better products. If we can’t make something that is better, we won’t do it.” Clearly, Apple applied that thinking first to iPods, then smart phones and more recently, to the iPad.

6. Apple stays at least two years ahead of its competitors
This is the one that scares Apple’s competitors the most. While those competing with Apple are just getting products to market that are competitive, Apple is already working on the products at least two years out. For example, the new iPhone that will most likely go to market in October was designed and signed off on two years ago. And the iPhone the company is working on now is for the fall of 2014. The same goes for the iPad. The new iPad that we will most likely see next March was signed off on two years ago. The one that’s being worked on now we will probably see in 2015. This is a nightmare for Apple’s competitors and will continue to be for some tim

Summary

On a very personal note, I have been using Apple computers exclusively since my first Apple IIe way back in the early 1980’s. Not once have I ever owned or ever considered buying a PC running Windows. Apple computers not only tend to last far longer than cheaper PC’s they run better and with less headaches. Thanks to the industry leading tech support, U.S. based phone support, local Apple stores or certified Apple partners, higher quality control, and simply the fact that they make the hardware and the software that runs it, you are far less apt to have issues on an Apple computer than a PC. The fact that Malware which includes viruses, trojans, spyware, root kit hacks, etc. is practically nonexistent on OS X also helps. There are something like 200,000 new Windows malware variants being discovered each day. And if for some reason you decide you absolutely have to run Windows or Linux you can do so at native speeds on a Mac. Why you would ever choose to burden your Mac with Microsoft software is a mystery to me.  😎

My love affair with Apple going back decades made my decision to buy their more recent iOS additions that much easier since they integrate so well. Apple is the only computer company that creates all of its own hardware and software; they control the entire package. Personal computers are a mishmash of parts and pieces from different sources. Hardware from one company, software from another. By contrast, many modern smartphone and computer makers get hardware from one place, and an operating system from another. When you live in the Apple ecosystem, you make a deal with Apple: I’ll pay you, and in exchange, you make sure everything plays nicely together. Google doesn’t seem capable of  providing that kind of tightly integrated experience.

What Apple does best is remember that technology only exists to serve its users, and goes far beyond a list of features and hardware specs. And that’s why Apple will continue to drive the future of computing, regardless of whether Google and others end up winning the numbers game. Apple has a lot of discerning customers. People who are perfectly well aware of the alternatives, know full well how the prices of competitor products compare and have made a choice to pay a premium price for a superior product. I am one of those people.

I also really like Apple as a company. The reason the products are so good is precisely because Apple has strong values around quality, attention to detail and refusal to compromise. I love the fact that Apple concentrates on doing a small number of things very well, and doesn’t do what most companies in its position would do and slap an Apple logo on everything from baseball caps to cars.

So are you allowed to be patriotic and proud that Apple is an American company? You are damn right you are. No other American company so beautifully manages to garner such worldwide acclaim, fame and envy. No other company encapsulates the American spirit and pride so magnificently. Not only can you feel pride that Apple is an American company, you should feel pride in that fact. Apple has proven that American companies can not only compete with anyone but dominate their market and set the gold standard in quality while still being profitable.

 

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