A midlife crisis is a beautiful moment in a person’s life when they recognize how much they’ve accomplished, and come up with creative ways to make dreams they put on hold years earlier into reality in the present, but this is the best case scenario. You also have people who lose their minds, head to the nearest Supreme store to buy an outfit that “suits their new lifestyle,” and soon after that they lease a Porsche. However, companies, like individuals, can also go through a transitional phase akin to a mid-life crisis, where products aren’t selling as well, and maybe the original aesthetic of the company needs a facelift. I believe Apple (AAPL) is a few steps away from the Supreme store as we speak.
In recent news, iPhone sales, specifically the iPhone XR, have failed to meet the company’s expectations. The decrease in demand could be from the design of the new device, but most experts say the product’s abnormally expensive price tag has broken the spell that historically bound consumers to buy every new Apple (AAPL) product on the market. In addition to decreased demand, Japan Display, Apple’s (AAPL) screen supplier in the East Asian markets, has cut its production of displays and its forecast growth, according to GizmoChina.
“For Japan Display, around 80 percent of its overall revenue is generated through the production of the display panel for smartphones. [The] majority of those earning is dependent on its business with Apple. Earlier, the company has reported sales forecast growth in the range of 10 percent to 20 percent. However, last month, the company lowered the numbers to between 5 percent to 15 percent ending in March 2019. It is also cutting its operating profit margin estimate.”
Apple (AAPL) was the most valuable company in the world for years, offering sleek, beautifully designed products that, while more expensive than similar products offered by competitors, entranced consumers to want everything with an “i” in front of it. Earlier this month, Microsoft (MSFT) overtook Apple (AAPL) as the most valuable company in the world, in terms of market capitalization, with a cap of $848.98 billion. Given the above information, I think it’s more than fair to say that Apple (AAPL) is due for their mid-life crisis. Rather than buy expensive sports cars and flashy streetwear, Apple (AAPL) did what any innovative tech company in need of change would do, they bought a new campus.
Any Apple (AAPL) fan knows that all news is speculative until Tim Cook, the successive CEO to the late Steve Jobs, makes it official with a press conference whilst wearing a black long-sleeved t-shirt. Staying true to form, Cook made the announcement for Apple’s (AAPL) new Austin campus on Thursday morning.
“Apple is proud to bring new investment, jobs, and opportunity to cities across the United States and to significantly deepen our quarter-century partnership with the city and people of Austin. Talent, creativity, and tomorrow’s breakthrough ideas aren’t limited by region or zip code, and, with this new expansion, we’re redoubling our commitment to cultivating the high-tech sector and workforce nationwide.”
–Tim Cook, Chief Executive Officer, Apple
According to reports, the Austin (Texas) campus will cost Apple (AAPL) $1 billion in building costs, but the company has made it clear that the new space 133-acre space will generate an initial 5,000 jobs with the potential to add 10,000 more in the future. Building campuses are all the rage in tech right now largely in part to the craze that ensued following Amazon’s announcement of their HQ2 campaign. Amazon’s (AMZN) newest $5 billion campus, to be built in the heart of Queens, New York, is said to bring no less than 25,000 jobs to the city over the next ten years. Given that every idea Amazon (AMZN) creates turns to gold, Apple (AAPL) couldn’t help but follow suit. In terms of initial responses to Apple’s announcement, the news has been positive. Texas Governor Greg Abbott gave a statement indicative of his support:
“Their decision to expand operations in our state is a testament to the high-quality workforce and unmatched economic environment that Texas offers. I thank Apple for this tremendous investment in Texas, and I look forward to building upon our strong partnership to create an even brighter future for the Lone Star State.”
–Governor Greg Abbott (R-TX)