Apple plans to spend $10 billion over five years on new data center facilities, as well as expanding its facilities in Austin, Seattle, San Diego and beyond.

Mitch Wagner, Executive Editor, Light Reading

December 13, 2018

3 Min Read
Apple to Build $1B Austin Campus & $10B Nationwide Data Center Expansion

Apple plans to build a $1 billion campus in Austin, part of a nationwide expansion that includes a five-year, $10 billion data center investment.

In addition to the Austin facilities, Apple Inc. (Nasdaq: AAPL) said Thursday that it plans new sites in Seattle, San Diego and Culver City, with expanded presence in cities across the US, including Pittsburgh; New York; and Boulder, Colo. Expansion plans span three years, with possibly more to come.

"The announcement caps a year of continued job creation," Apple says. The company added 6,000 jobs to its US workforce this year and now employees 90,000 people in all 50 states. Apple plans to create 20,000 US jobs by 2023.

Figure 1: Source: Apple Source: Apple

In Austin, the 133-acre campus will initially accommodate 5,000 additional employees, with capacity to grow to 15,000, making Apple the largest private employer in Austin. Job functions at the new campus include engineering, R&D, finance, sales and customer support.

Austin is already the largest population of Apple employees outside Cupertino, the company says.

The national expansion will include growth to more than 1,000 employees each in Seattle, San Diego and Culver City, with hundreds of new jobs in Pittsburgh; New York; Boulder; Boston; and Portland, Ore. Apple says it recently opened its newest office in Nashville, Tenn., and its Miami office is projected to double in size.

The $10 billion data center expansion includes $4.5 billion this year and next, Apple says. Data centers in North Carolina, Arizona and Nevada are currently expanding, and in Iowa, preparations are underway for the company's newest data center.

Apple is getting a $25 million grant from the state of Texas, and likely receiving tens of millions of dollars in local property tax abatements, according to Axios.

Apple's expansion comes as its smartphone sales flatten, even as the price Apple charges for phones goes up. Apple recently announced it will no longer report phone unit sales, a change in financial reporting that has proven unpopular. Apple's stock price plunged afterward. (See Apple's Planned Cover-Up Meets Backlash and Apple Reports $62.8B Q4 Revenue, Up 20%.)

It's not just Apple; smartphone sales are flattening industry-wide. The industry may have simply matured, with less incentive for people to upgrade as this year's phones represent only incremental improvements over previous models.

Apple is increasingly focused on services, such as music, the App Store and iCloud.

Apple's announcement follows Amazon's deciding last month to build new headquarters in New York City and northern Virginia, as well as a shipping center in Tennessee. Amazon says it will invest $5 billion and create more than 50,000 jobs. (See Amazon Selects NYC & Northern Virginia for New HQ.)

Amazon will benefit from more than $2.4 billion in incentives from the three states, which has proven controversial with taxpayers who say they don't want to subsidize one of the most prosperous US companies.

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— Mitch Wagner Follow me on Twitter Visit my LinkedIn profile Follow me on Facebook Executive Editor, Light Reading

About the Author(s)

Mitch Wagner

Executive Editor, Light Reading

San Diego-based Mitch Wagner is many things. As well as being "our guy" on the West Coast (of the US, not Scotland, or anywhere else with indifferent meteorological conditions), he's a husband (to his wife), dissatisfied Democrat, American (so he could be President some day), nonobservant Jew, and science fiction fan. Not necessarily in that order.

He's also one half of a special duo, along with Minnie, who is the co-habitor of the West Coast Bureau and Light Reading's primary chewer of sticks, though she is not the only one on the team who regularly munches on bark.

Wagner, whose previous positions include Editor-in-Chief at Internet Evolution and Executive Editor at InformationWeek, will be responsible for tracking and reporting on developments in Silicon Valley and other US West Coast hotspots of communications technology innovation.

Beats: Software-defined networking (SDN), network functions virtualization (NFV), IP networking, and colored foods (such as 'green rice').

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