I see this as a sign of Apple's hubris. Note the demolition of existing space.

Selected text from Cupertino City Council:

Development Permit to allow the demolition of approximately 2.66 million square feet of existing office, research and development buildings and the construction of 3.42 million square feet of office, research, and development buildings; 120,000 square feet (1,000 seat) corporate auditorium, 100,000 square feet corporate fitness center, and 25,000 square feet Valet Parking Reception uses; 92,000 square feet of utility plants; and associated parking facilities and ancillary buildings (such as security reception areas and landscape maintenance buildings) (DP-2011-04); and…

Bud Conrad writes: 

The space is in my back yard. It was previously Hewlett Packard, I think for the hand held calculator. It is plain vanilla tilt up type single story.

The design from Apple was presented to Cupertino by Jobs in one of his last days. It is a multi floor circular structure. Yes Hubris, but that is Silicon valley. Look at Oracle's HQ that is often called OZ because of its color. Larry called Jobs his best friend.

Anton Johnson writes:

Maybe the locals will refer to it as "The Tire".

Steve Ellison writes: 

There has been something of an arms race in Silicon Valley office buildings. The company for which I work built a new office building with a gym and a health spa a few years ago. A comment I heard at the time was, "We bring new graduates in for interviews, and they've already been interviewed at Facebook and the Googleplex. Then they walk into one of our dumpy 30-year-old buildings."

Bill Rafter writes: 

I have conflicting opinions on this and I would love someone to have the definitive answer.

When I first did a management buyout I moved the business to a prestigious Mid-town location overlooking the ice rink. But I never looked out the window. However, clients and prospective clients would come and take in the view and then comment that they felt very comfortable dealing with us. I understood that to mean they felt very comfortable in the office, but it only mattered that we got the business. We did get the business, but the location was costly. Effectively the pricey location was our advertising, whereas actual advertising was prohibited.

Several years after I had to meet with a very wealthy person (Mr. Big), who was generally unknown to the investment community. Well this guy had the shabbiest office building on an obscure road in East Nowhere. But he had plenty of money. I took that as a lesson that the purpose of business is to make money, and Mr. Big had a better handle on that concept than I did. Subsequently I met two other Mr. Bigs with the same MO. When my lease was up, I moved from the pricey location.

I think that young people want to be rich and famous, and a fancy location supports the latter at the expense of the former. Older people (at least some of us) want to be rich and unknown, and inexpensive digs supports both those goals.

Craig Mee writes: 

I use to see something similar to that on the future floors. At the age of 25-30 years old the ferraris were in force with the expensive suits but by 40 many started being understated in their belongings, dressing more conservatively, etc, while many in other fields were still looking to show pony. Maybe due to the exposure of money and wealth coming and going at an early age, it had an effect of its own.

anonymous writes: 

Bill, I think that for both some sellers and some buyers, the fancy address is a signaling mechanism. It's exactly the same reason that in the early 20th century, banks built huge structures with granite walls and soaring ceilings. And it's not completely unrelated to the history of Roman Catholic cathedrals either. It's not the view out the window (unless one is planning to jump.) Rather, it's the sense of permanence and power and stability.

Putting aside whether you personally get pleasure from the view, it's more than advertising. It's signaling that "you must be a really successful investor if you can afford the rent." Same with the Armani Suit, the Rolex watch, the crocodile shoes. (But NOT the Ferrari — unless you race it.)

Sam Walton drove a pickup truck. Sid Weinberg (GS) drove a Ford sedan. Trophy Wife drives an 8 year old Honda minivan. Sam and Sid may be signaling too. They are signaling frugality and reverse snob appeal. My wife is signaling that she loves to schlep exotic plants from the local nursery and is always trashing the rear bumper.

I dare say that Craig is a young guy. One needs at least one proper mid-life crisis to appreciate the Porsche, Ferarri, Lamborghini, etc.


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