Is Apple back in the good books after paying its tax and investing to expand US operations, creating thousands of more jobs.
Apple has announced it will pledge over $30bn in expanding its American operations, as well as paying an estimated $38bn in tax on overseas profits.
The tech giant came under fire last week as the taxman came knocking at the door for unpaid tax on profits made across Europe. Now, the iPhone maker has said it will reinvest more than $30bn to open a new campus and data centres that will help create new jobs and make a more direct contribution to the US economy. Apple estimates that future investment could total a huge $350bn.
According to the BBC, Chief executive Tim Cook said Apple is “focusing our investments in areas where we can have a direct impact on job creation”.
Apple’s commitment to investing in the US is said to be the largest of its kind and is speculated to have been driven by President Donald Trump’s criticism of Apple and other technology giants for relying on overseas manufacturing.
In response to Trump’s criticism, part of Apple’s American Investment fund will go into expanding its US advanced manufacturing fund from $1bn to $5bn. Now, the company has demonstrated its commitment to its home country which has seemingly left them in Trump’s good books following a tweet from the US President.
Trump tweeted: “I promised that my policies would allow companies like Apple to bring massive amounts of money back to the United States. Great to see Apple follow through as a result of TAX CUTS.”.
Additionally, just months after opening its spaceship-shaped HQ Apple Park, the tech giant is planning to create a new campus to expand its manufacturing. The new campus will focus on technical support and with its creation, will bring over 20,000 new jobs to the US over the next five years. This number adds to the already existing 84,000 Apple employs across engineering, retail and other areas in America. The new campus location is expected to be announced later in the year.
The tech giant also plans to boost its investment into data centres by $10bn over the next five years, which will power its App Store, iTunes and iCloud services. The investment will add to the data centres Apple already has across seven other states.
Creating more data centres will help Apple to expand its growing web services, such as the App Store and Apple music. This will help achieve the company’s aim to double its services revenue to $48bn by 2020, after Apple revealed its services are outpacing revenues for products such as iPhones and iPads.
Furthermore, the additional investment into data centres will aid Apple to move away from relying on other Cloud service providers such as AWS and Microsoft Azure. Currently, AWS leads the public cloud market, with capital expenditures totalling at £6.7bn last year increasing by 47% and Microsoft had a total of $10.2bn capital expenditures last year, increasing by almost 15%.
The additional date centres built from the investment will add to those Apple has recently set up in Europe, as well as a new centre in China through a partnership with a Chinese company.
“Apple is a success story that could only have happened in America, and we are proud to build on our long history of support for the US economy,” Mr Cook said earlier in a statement according to the FT. “We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible.”
Apple’s revelation to invest back into the US economy, instead of overseas, comes after a series of mishaps for the company including its tax repayment to the HM & Revenues Customs and backlash from customers over its admission to slowing down older iPhones.