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Print 24 comment(s) - last by gpoly.. on Apr 7 at 5:57 AM

It went from less than $3 billion in 2011 to nearly $5 billion now

Former Apple CEO Steve Jobs wanted Apple's huge, second campus to be built by 2015, but issues with going way over budget has tacked on an extra year to the completion date. 

Back in June 2011, Jobs presented plans for Apple's new corporate building before the Cupertino City Council. It looked like a spaceship, and was capable of holding 12,000 employees. 

The plans consisted of a 2.8 million square foot campus with 176 acres of trees (adding 6,000 trees total). There were curved exterior walls and 40-foot panes of concave glass from the floor to the ceiling. 

At that time, the budget was a little under $3 billion. Jobs wanted to break ground in 2012 and have the Apple spaceship complete by 2015. 

However, the budget has since grown to nearly $5 billion today, and the company doesn't plan to start building until June. The project likely won't be complete until 2016. 


What's causing the delay? Apple is taking a little extra time to cut down that giant budget, which has ballooned since initial plans went through.

Apple is currently working with architect Foster + Partners to chop about $1 billion from the budget before going any further. Apple had hired Norman Foster’s firm back in 2010 when plans were just begining. Apple's general contractor is a joint venture of DPR Construction (Redwood City, California) and Skanska USA Building (New York).

But the company still needs to work out agreements with several other subcontractors in order to begin. Contractors will be submitting bids by May of this year. 

Despite having $137 billion in the bank, Apple is likely looking to cut the budget a bit because its shares have fallen 38 percent since its high of $700 per share in September 2012. Also, competitors like Samsung are making a huge splash in the mobile market with high-tech smartphones and tablets that rival the iPhone/iPad in price, design and functionality.

Investors aren't too happy with the $5 billion budget, either. 

“This is rubbing salt in the wound, to spend at a level that most anyone would say is extravagant, at a time when they’re being so stingy on dividends," said Keith Goddard, the chief executive of Tulsa-based Capital Advisors, which owns 30,537 shares of Apple. "This headquarters would perpetuate the negative story.”

Samsung recently announced that it plans to top Apple's spaceship headquarters by building a $300 million green campus, which will be placed in San Jose, California. It will feature a 1.1 million square foot campus with sports courts, cafes and gardens. Even the design is interesting, with alternating layers of larger and smaller floors to give a ridged appearance to the building.

Source: BusinessWeek





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Hubris
By Plester on 4/4/2013 1:32:43 PM , Rating: 5
It will be an impressive monument to a bygone company someday.




RE: Hubris
By Ammohunt on 4/4/2013 2:16:28 PM , Rating: 2
Like most company headquarters that stay in California. Stockton today Cupertino tomorrow? San Jose?


RE: Hubris
By synapse46 on 4/5/2013 8:12:33 AM , Rating: 2
While I'm sure a 300million dollar building is nice, I doubt it is hurting a company grossing 45billion a quarter.


RE: Hubris
By Schadenfroh on 4/4/2013 2:22:46 PM , Rating: 2
I remember seeing WorldCom's old HQ in Clinton, Mississippi as a derelict wreck of what was once the center of the telecom world after its meltdown.

Maybe Apple can later sell this new building and lease it back to stay afloat like Sony / AMD one day.


RE: Hubris
By Dorkyman on 4/4/2013 3:22:02 PM , Rating: 5
The real reason for the cost overruns is that Apple insisted on a closed environment--they needed to create their own iConcrete, iSteel, and iGlass. So of course it was going to cost more.

But that way they can have total control of the user experience.


RE: Hubris
By marvdmartian on 4/5/2013 7:56:56 AM , Rating: 4
I heard that the reason for the delay and cost overrun is because Tim Cook can't buy dilithium crystals at the same price that Steve Jobs was able to buy them for. Once it's completed, though, they'll be able to take off, and return Steve's remains back to his planet of birth.


RE: Hubris
By Jeffk464 on 4/5/2013 12:57:07 PM , Rating: 2
Its the wrath of Kahn, they will use the genesis project to bring back steve jobs.


RE: Hubris
By gpoly on 4/7/2013 5:57:40 AM , Rating: 2
The signs are there. Like the multi-millionaire who lives larger than he can afford and finally goes out and buys that Mega Yacht he neither needs nor can afford. You see it so many many times. It's not so much about the $5 Billion, it's about the mindset. Do Apple really NEED a building like this? They are a COMPANY, not a religion. Just a single billion dollars gets you a LOT of space in a normal business park! If I was a shareholder, I wouldn't be too happy, particularly now they are selling a fairly "mature" set of products into very mature markets (or even declining in the case of the iMac). The dream run is over and they need to be working harder and focusing on some new and innovative products to replace the mature ones, not building shrines.


Architectural rendering
By superflex on 4/4/2013 2:16:35 PM , Rating: 5
The image would have been more Apple-like with a purple haze around the the sun?




By BillyBatson on 4/4/2013 9:50:49 PM , Rating: 5
Samsung trying to top apples spaceship? Are you sure you and DT aren't making that part up? Show me one other article stating they are trying to top it. Samsung is planning on building a smaller and much cheaper building, how is that "topping" ? It's not.




Apple will be around for a long time
By BRB29 on 4/5/2013 8:12:54 AM , Rating: 3
Even if apple sells everything, laid off everyone and just collect interest off its cash then it will still make billions a year. Xbox was one of my most bullyish marketshare grabbing method by pushing cash losing over 1 billion a year. Apple can bully its way into any market just using its interest and still be in the black forever.

I don't get it. As a project or program manager, you have the option to crash certain parts of the project to get it finished in time. Of course that cost money. But if you are going to crash, then you might as well crash as early in the project as possible so you can be sure you finish in time. Then you don't have to tell your boss/client that you spent the money and you're late.
Being late and overbudget is exactly the reasons project managers gets fired for.




By web2dot0 on 4/6/2013 2:45:10 AM , Rating: 2
The thing about managing big project is you almost always go over budget. There are so many hidden costs that it's almost inevitable, unless you are most seasoned or you care so much of other people's money that you penny pinch.

The trouble is, that never happens because if you've spent "X" amount already, why not a little more? .. the cycle continues ...

Once you are in that rabit hole, you can't "cut" loose. Now, you are really gonna be fired. Spending absurd amount of money for doing nothing ....

See the problem?


There's your answer...
By GotThumbs on 4/4/2013 2:05:30 PM , Rating: 2
quote:
Apple's general contractor is a joint venture of DPR Construction (Redwood City, California) and Skanska USA Building (New York).




RE: There's your answer...
By GotThumbs on 4/4/2013 2:06:48 PM , Rating: 2
Clarification

quote:
Apple's Spaceship Headquarters Having Budget Overruns


Reason is simple
By torpor on 4/5/2013 12:22:40 AM , Rating: 3
Apple can't build anything right unless they get about ten thousand Chinese to do the physical work for them over 18-hour days.




When?
By JackBurton on 4/4/13, Rating: -1
RE: When?
By superflex on 4/4/2013 2:02:11 PM , Rating: 4
Probably the same day Apple patents curved exterior walls and 40-foot panes of concave glass from the floor to the ceiling.


RE: When?
By Neodude007 on 4/4/2013 2:09:49 PM , Rating: 3
I never understood all those arguments we have all seen regarding who came out with what and what (AKA who invented product or feature X). Who really cares... are we arguing about who invented cars today? Because I see a lot of car brands. Who gets the credit? Answer: Nobody cares, just make your product and improve upon it. That is all... think about it. Who invented rectangular flat touch screen phones, who invented widgets, retina display, who first used NFC, IT JUST DOES NOT MATTER. In reality these are all small gimmicky features that all add up to a product... a phone which is now pretty much a ubiquitous device that always has almost the exact same features as the next phone (like cars do now).

Nerd: My phone made by ABC company came out with X first.

Normal person: Well my phone made by XYZ does that too. I don't care who did what first because my phone does it just like yours so what is the difference to me as a consumer? Nothing.


RE: When?
By Nortel on 4/4/13, Rating: 0
RE: When?
By Neodude007 on 4/4/2013 2:44:20 PM , Rating: 1
I wasn't really getting in to patents per se, more general things which is why I brought up cars. One car maker MUST have been "first" using in-dash GPS units. Yay for them, now they all do. That is my point. Some people nit pick as to who did or used what first and it simply doesn't matter. You could even call that "innovation" but at the end of the day myself, as a consumer, doesn't care about WHO innovated something first as long as my device I'm buying can do it.


RE: When?
By lelias2k on 4/4/2013 3:20:44 PM , Rating: 2
I suggest you get more familiar with how patents really work, don't just judge by what you read on the press about the lawsuits.


RE: When?
By retrospooty on 4/4/2013 2:49:27 PM , Rating: 2
In your example, Apple didn't invent the widget... They copied it, improved upon it (like all companies do) and then sued as if they invented it.

It's not a strange attitude at all, what Apple does is called Hippocracy. What its all about isnt who invented and copied what, because all companies do that. Its about who makes the best product at the right price.

Before you say anything else about Apple being copied, dont forget where Apple cot the idea for the smartphone from, as well as the smartwatch that was on the market 10 years ago.


RE: When?
By xti on 4/4/2013 3:39:25 PM , Rating: 3
if anything, the strange attitude is just everyone so awkwardly passionate about it..it wasnt your cousin getting sued it was a corp.

and then everyone acts surprised that corporations do the best thing for their stock price and not "the right thing" or some crap.


RE: When?
By BRB29 on 4/5/2013 8:14:48 AM , Rating: 2
Patent protection only last 20 years.


"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard













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