Apple is Betting Big on America with $430 Billion Investment

Possibly America’s most successful company in its 244-year history, Apple keeps sending soft signals of its commitment to its domestic investments; earlier this week, the companies new landmark iOS update aimed at putting more power back in the hands of its customers to protect their personal privacy, and now it’s sending a hard signal in the form of cold hard cash.

 

Apple is now upping it’s US investment by 20% to $430 billion, nearly a half a trillion dollars.  To put that into perspective, that is roughly 20% of the company’s $2.25 trillion market capitalization. The investment is being put towards developing next generation silicon technology, spurring 5G wireless technology across 9 states, and a new campus in North Carolina – creating 20,000 by 2026.  The company is also the largest US taxpayer paying over $45 billion in corporate domestic income taxes in the past 5 years.

 

This of course comes as the White House is putting forward policy initiatives to tax overseas profits to help fund domestic infrastructure of which tech firms are among the largest profit engines.  Apple in its own right was among the large players that took advantage of minimizing its domestic tax liability by shifting its profits to Irish subsidiaries.  Under the previous administration, theFederal Government began to end that practice - repatriating almost all ofApples $252 billion Irish cash mountain, of which the company paid $38 billion in taxes.  This went into effect when the45th President signed the 2018 US tax reforms of the 115th congress into law, lowering the corporate tax rate from 35% to 21% with the added caveat of a one-time repatriation tax of 15.5%.  So, while the company is behaving as a model citizen now, it wasn’t without a push from the long arm of the Federal Government.  

 

Apples domestic bet is multi-faceted.  The company's new North Carolina campus in the Raleigh Metro area will create 3,000jobs in software engineering, artificial intelligence, machine learning, and other fields. Apple currently employs over 95,000 domestically.  Apple as a result will receive a nearly $1billion incentive package from the state over 40 years, which is ultimately inconsequential to Apple. This new campus follows the announcement of itsAustin Texas campus of which it plans to begin staffing by next year.  This continues to follow the trend of tech giants quietly, and some not so quietly shifting operations away from the west coast.

 

At glance other facets of Apple’s investment will be directed toward American suppliers, data-center investments, capital expenditures and dozens of AppleTV+ productions, among other investments through a fund the company launched in 2017 are going to continue to support companies such as XPO Corning and II-IV. 

 

The company’s largest allocations are going to 5G modems and to silicon chip research and development. While the company is playing its cards close to the vest on what that entails, it could mean anything from general 5G network infrastructure to the actual technology that helps enable mass connectivity of devices.  The next 10 years are going to bring massive changes to connectivity from our cars and mobile devices to the IoT.  Apple’s bet may be a move to own the 5G cloud, network, its related technologies and charge everyone for the privilege.