As Amazon makes waves in its search for a second headquarters, Apple
is also on the hunt for an additional campus. But the Cupertino, Calif.-based company will likely choose a different location than Amazon — with a different set of implications, to boot.
Apple announced earlier this week, as part of a plan to add $350 billion to the U.S. economy, that it would be creating 20,000 jobs, including some that would be housed in a new campus. Apple’s plans sparked comparisons with Amazon’s
In reality, the projects have little in common, and Apple’s announcement of a new campus could have been designed to make a bigger splash given the hype Amazon has generated.
As VentureBeat pointed out, there are a number of factors that differentiate the two companies’ plans. Amazon’s HQ2 will involve hiring 50,000 employees with an average annual wage of $100,000, whereas Apple’s new campus will at least initially serve as a home base for customer technical support, the service known a
The average technical support staffer makes just under $33,000 a year, per VentureBeat’s calculations. Indeed, it seems this service center will mainly staff entry-level workers to start.
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Moreover, Apple does not appear to be going through the same request-for-proposals process as Amazon. Instead, Apple will likely take the more traditional approach that many companies take when searching for a location for a new satellite office — in other words, quietly reaching out to and examining cities rather than the beauty contest Amazon’s HQ2 search has become.
Nevertheless, in the way it framed its announcement, Apple appears to be attempting to ride the coattails of Amazon’s search, despite the fact that its new office space seems to be more run-of-the-mill, said Tendayi Kapfidze, chief economist at LendingTree. (Apple declined to comment for the story.)
It wouldn’t be surprising, therefore, if Apple chose a radically different city to house its new campus. And while the impact that new office space will have will be nowhere near as radical as Amazon’s HQ2, it can still make a significant difference on a local level.
Where will Apple choose to go?
The cities will likely be different, but the considerations quite similar. The company will generally look at labor scalability, accessibility, economic incentives and local culture, according to King White, chief executive officer at consulting firm Site Selection Group.
Apple may look to hire more high-skilled workers at the new facility over time. If so, it will need to be near a diverse pool of talent. That includes good schools.
Geographically, Apple will want to choose somewhere relatively near major metropolitan areas to help commuters.
Time zones are critical for customer support. So cities on the West Coast and in the Midwest can be ruled out most likely, since Apple’s headquarters are in Cupertino, Calif., and a second campus is already located in Austin, Texas.
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The cost of doing business will matter too. Taxes are more expensive in the Northeast — but states like New Jersey have provided tax breaks to large companies. Comparatively, the Southeast and Sunbelt states tend to offer an attractive combination of tax credits, cash grants and training grants to lure companies there, King said.
All of this adds up to one crucial question: “Is it a desirable place to live, work and play?” King said.
|Top 10 most saturated call center metro areas (with populations over 1 million), according to Site Selection Group|
|Metro Area||Population||Total Labor Force||Call Center Employees||Saturation Rate|
|Salt Lake City,||1,160,217||615,514||25,632||4.2%|
Apple may very well choose a larger city that already plays host to many call centers. In that case, places like Tampa, Fla., and Phoenix, Ariz., could be in the running.
But Apple could also choose one of Amazon’s rejected candidates. Nashville, Raleigh, N.C., and Atlanta all feature many of the same appealing characteristics.
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Where would Apple be less likely to go?
Politicians and economists have argued that corporations should choose Rust Belt cities that have lost factory jobs. But the risk in such a move would likely prove too great, King said. While such an approach would be altruistic, many of these cities lack the amenities or diver talent pool that a large corporation would need to staff a new campus, making the risk of going there too great, King said.
What impact will Apple’s campus have?
An office complex of the size that Apple is likely to build won’t be as much of a game-changer as Amazon’s HQ2, but could have a positive influence nevertheless. The added jobs would help reduce unemployment and create more competition in the labor market. That would create a large pool of gainfully employed people who could pursue homeownership and other opportunities.
Plus, depending on the mix of low- and high-skilled jobs, it could attract other suppliers and vendors to set up shop nearby, creating a ripple effect. “These things are meaningful — that’s why you see state and local governments competing all the time,” Kapfidze said. “It will have a localized impact, just not on the scale of the Amazon story.”