Briefly: Apple lobbies government, Fifth Ave. store sales booming

[AppleInsider]

Apple spent $390,000 lobbying the U.S. government on stimulus and education funding in this year's second quarter; while a new report says the company's Fifth Avenue store rakes in $350 million annually.

Apple lobbies on education funding, broadband

New lobbying disclosures from the U.S. House of Representatives show that Apple spent $390,000 in Q2 2009 on attempts to influence leaders. Issues included tax codes, education funding, stimulus grants and broadband penetration.

That Apple is pushing for more education funding is no surprise. The company's COO, Tim Cook, revealed in a company earnings report in July that education sales have lagged as the recession has impacted school funding.

"The U.S. K-12 institutional business is weak," Cook said. "As you might expect, and it’s getting hit by budget shortfalls, and last quarter we saw very negligible amount, if any, of the stimulus funds flow all the way to the state and district levels to get spent. So that may or may not occur this quarter."

The new lobbying reports show that Apple weighed in with officials on stimulus grants and education funding, as well as broadband availability in the U.S., health care reform, consumer safety, retail crime, foreign and domestic trade, green technology and more.

In the first quarter of 2009, Apple spent $340,000 total on lobbying.

Fifth Avenue Apple store is highest grossing

A new report from Bloomberg states that Apple's store at Fifth Avenue and 59th Street in Manhattan is the most profitable store in the district. Calling it "a mercedes per square foot," the report estimates that the Apple Store has annual sales of more than $350 million.

The success of the store is pinned on the popularity of the iPhone, noting that lines often run out of the store's front door of shoppers looking to buy the device. This as retail sales in New York City have reportedly fallen 8 to 10 percent from a year prior.

Located at 767 Fifth Ave., the 20,000 square foot store first opened in 2006. It features a distinctive 32-foot glass cube and is open 24 hours a day, 365 days a year.

[ View this article at AppleInsider.com ]

[Sipadan]

$1 million a day for one store.... drools

How much do you think the MS stores will make?

[Quadra 610]

Microsoft, take notes.

THIS is how you make money in this industry. Never mind going after he bottom end with lousy products . . . thta you can't even sell enough of in a recession!

[doyourownthing]

Originally Posted by Sipadan

$1 million a day for one store.... drools

How much do you think the MS stores will make?

i'm sure just the very idiotic idea of the store has cost microsoft -350 millions

keep up the good work, ballmer

[anantksundaram]

Originally Posted by AppleInsider

The company's COO, Tim Cook, revealed in a company earnings report in July that education sales have lagged as the recession has impacted school funding.

"The U.S. K-12 institutional business is weak," Cook said. "As you might expect, and it’s getting hit by budget shortfalls, ......

Yeah, Tim, instead of asking for government handouts (which is, after all, our $$!), how about giving the schools and back-to-school parents a REALLY major one-time price break (instead of just an iPod Touch)?

[bigmc6000]

Originally Posted by anantksundaram

Yeah, Tim, instead of asking for government handouts (which is, after all, our $$!), how about giving the schools and back-to-school parents a REALLY major one-time price break (instead of just an iPod Touch)?

Well I'd certainly rather have them use my tax money for Macs than use it for old vehicles that run fine but get a few MPG less than current ones and then run salt water through the engine to kill it and then put it in a landfill.

[anantksundaram]

Originally Posted by bigmc6000

Well I'd certainly rather have them use my tax money for Macs than use it for old vehicles that run fine but get a few MPG less than current ones and then run salt water through the engine to kill it and then put it in a landfill.

I'd rather have neither!

[Jerseymac]

Every time I've been to the 5th Ave Apple Store I can't even get in the door. There is usually a line unless it's the middle of the night! My Apple Store in the Garden State Plaza is usually packed all day.

[bigmc6000]

Originally Posted by anantksundaram

I'd rather have neither!

Well yeah, I'll go w/ ya on that one.

I wonder what we could do w/ all that money spent on lobbying - in 2008 over 3.3 BILLION was spent to lobbying - I'd imagine the states could find good things to do w/ $66 million a piece...

[Robin Huber]

I'd just love to see one of Microsoft's stores right next to THIS Apple location. If they want to compete head to head, let's see them play in THIS league.

[GQB]

Originally Posted by anantksundaram

Yeah, Tim, instead of asking for government handouts (which is, after all, our $$!), how about giving the schools and back-to-school parents a REALLY major one-time price break (instead of just an iPod Touch)?

Ah... time for the "I did it all myself" Randians to raise their heads again.
How you doing on that public education YOU got (or is this another 'I got mine' event?)
Or the roads, police, courts (that protect your intellectual property), inspected water/food/drugs, basic research (that the entire tech industry is built on), etc etc etc.

Reaganism was a failure... get over it.

[Robin Huber]

Where is all this anti public education sentiment coming from these days? Public schools are as American as apple pie. Our forbearers were wise enough to realize that a well-educated citizenry is what makes a true democracy work. In the old country only the privileged could afford to send their children to schools. We were going to "think different." Our public education system was once the envy of the world. But we have allowed the "starve the beast" mindset of those who mistrust government on principle to bleed over into this precious national resource. Trim down government if you must, but please carve out a place for public schools to be generously provided for.

[bigmc6000]

I think you guys are taking anan's comment out of context. He was just saying that Tim Cook is pulling an Al Gore (remember, he went/goes around the world talking about Global Warming but uses 10x the amount of energy the average household does). I don't think he'd suggest we not give money to the schools - I think he's just calling out Tim Cook and also saying he'd rather they spend our money on something other than Macs (possibly but I'm not sure on that one - personally I'd agree, I think great teachers trump any piece of technology available when it comes to teaching).

[jb510]

Originally Posted by anantksundaram

Yeah, Tim, instead of asking for government handouts (which is, after all, our $$!), how about giving the schools and back-to-school parents a REALLY major one-time price break (instead of just an iPod Touch)?

Huh? That's a peculiar way to interpret that. Apple lobbies on behalf of the Mostly public education system recieving funding which in turn may benifit them, but it's not like Apple directly being granted funds by the federal government.

I wonder what the rent is on that 5th ave location? $4000/sf?

[anantksundaram]

Originally Posted by GQB

Ah... time for the "I did it all myself" Randians to raise their heads again.
How you doing on that public education YOU got (or is this another 'I got mine' event?)
Or the roads, police, courts (that protect your intellectual property), inspected water/food/drugs, basic research (that the entire tech industry is built on), etc etc etc.

Reaganism was a failure... get over it.

Excuse me?!

1) Please learn about what a 'public good' is. You'll see that your examples above are (mostly) referring to public goods. A Mac is not. (And if you really cared about public education budgets vis-a-vis Mac purchases, why would you not ask for Apple to lower prices!?).

2) What does this have to do with Reaganism?* And, how the heck do you know what my politics are? You have absolutely no clue, so please spare me the political swipes.....


*I see someone's been reading Krugman today.

[Ireland]

Small stock manip. coming.

[anantksundaram]

Originally Posted by jb510

Huh? That's a peculiar way to interpret that. Apple lobbies on behalf of the Mostly public education system recieving funding which in turn may benifit them, but it's not like Apple directly being granted funds by the federal government.

Ah, you think that Apple is lobbying the government for more funding for public education so they can hire more teachers or buy PCs or provide better gym facilities?

I made a very simple point: If Apple truly: (i) cares about public education budgets; (ii) cares about kids who attend public schools (and their parents); and (iii) wants to sell more computers, it knows what to do.

[Booga]

$390K in lobbying? That's peanuts! That's 1/3 of one day of revenue at the Manhattan Apple Store also mentioned in the article. That's a few full-time folks. I don't even know why that's news.

[Maury Markowitz]

Originally Posted by GQB

basic research (that the entire tech industry is built on), etc etc etc.

Reaganism was a failure... get over it.

Ummm, no. As someone who is very much aware of what is really going in in "basic research", I can say with no hesitation whatsoever that you are very, very misled on this topic.

Basic research in the US is healthier than it has ever been. The same is true for the world as a whole. And "ever been" as in "the recorded history of mankind, and almost certainly prior to that as well". There is more money, more projects, more people, more industry help, more tools, faster turnaround, faster distribution, faster to-the-market than ever before. Anyone can see this.

And that's because of changes that were made in terms of government funding. In the past, companies were in the uncomfortable position of having to compete with the US government for funding on many basic research priorities. The government had effectively unlimited funds, but spread thinly. That meant there was little chance that they would pick your area of interest to fund, but if they did, you were wiped out. So the risk was too high to develop many products, and the companies instead waited for government projects that would guarantee them the income before starting any work. Worse, you had groups like RAND and SRI who were favored vendors for just about everything - the devil you know.

But worse than that, the government also claimed ownership on anything that came out of a project that they funded. So when the project to build early IC's for the Nike X project ended because they didn't want the missile, they owned some of the IP and IC's didn't come to market for the better part of a decade. Private capital was essentially locked out, they could invest if they wanted to, but there was no way to recoup that if the government came in at any point.

The change that, well, changed everything, was the turnover of IP to the research body, in spite of the government funding. This had two effects. For one, it gave universities and other research labs a clear profit motive for their work. The second, a side-effect, was that the same groups were also in a position to gather funding from non-government sources. This freed up trillions of dollars for research that was otherwise locked away because of the ownership issues.

An excellent example of the rapid changes this brought about can be seen here in Toronto. In the early 1990s the Canadian government instituted a number of changes that matched the US's. This was during a period of decreasing investment in Canada, a topic of hot debate that can still be widely found on the Internet. Then the money started flowing, but it was difficult to match funding with partners. So they created the Discovery District, for about $500 million in taxpayer funding. The result? Toronto is now the #1 area in several different health management areas, and by 2002 it was estimated the District was generating $2 billion a year in direct economic benefit. Since then the MaRS incubator and university labs across the road have tripled in size.

If there is an example where the private world is clearly better than the government, I can't think of it.

Maury

[DaveGee]

Originally Posted by Booga

$390K in lobbying? That's peanuts! That's 1/3 of one day of revenue at the Manhattan Apple Store also mentioned in the article. That's a few full-time folks. I don't even know why that's news.

You beat me to it... $390k what does that get you in a government dripping with corrupiont? A cup of coffee with a Congressman's low level stooge?

Dave

[SpamSandwich]

Originally Posted by anantksundaram

Yeah, Tim, instead of asking for government handouts (which is, after all, our $$!), how about giving the schools and back-to-school parents a REALLY major one-time price break (instead of just an iPod Touch)?

Lobbying is a legal activity. Companies and special interest groups all do it. How else do you think their interests could be represented in Washington?

[elroth]

Originally Posted by anantksundaram

Yeah, Tim, instead of asking for government handouts (which is, after all, our $$!), how about giving the schools and back-to-school parents a REALLY major one-time price break (instead of just an iPod Touch)?

Do you know what Apple's prices are for schools that buy Macs in volume? I thought not.

As far as parents, prices were lowered this year on Macs - around 10% for 13-inch MacBooks (now Pros), and some retailers are discounting them another 10% or more (I don't know about educational prices).

And as far as "government handouts", Apple isn't asking for direct money, they're asking the government to give technology funding to schools. It doesn't mean the schools will spend it on Apple products - Dell has a lot of the educational market as well.

[mpw]

Originally Posted by Robin Huber

I'd just love to see one of Microsoft's stores right next to THIS Apple location. If they want to compete head to head, let's see them play in THIS league.

I wonder what would happen if MS did decide to compete head to head with Apple? or for that matter if Apple ever tried to compete head to head with MS? Hypothetically I wonder who'd be more succesful in the other's marketplace?

[jb510]

Originally Posted by anantksundaram

Ah, you think that Apple is lobbying the government for more funding for public education so they can hire more teachers or buy PCs or provide better gym facilities?

I made a very simple point: If Apple truly: (i) cares about public education budgets; (ii) cares about kids who attend public schools (and their parents); and (iii) wants to sell more computers, it knows what to do.

Ah... I must of misread what you wrote. It sounded like you were accusing Apple of asking for handouts from the federal government.

Yeah, Tim, instead of asking for government handouts (which is, after all, our $$!),

As for your point, let me ask if you'd also stand behind the logical extension of it. It seems your saying that education therefore should be funded by the benevolence of private companies? Perhaps Coca-cola can provide free sodas in vending machines and Kraft can provide discounted cheese! Then if we just get some nice company to provide text books for free we'll be all set.

Sorry but I'd like to keep corporations OUT of schools entirely. Discounts and offers like those always come with strings attached that are damaging to educational environments. Therefore, yes, I would like to see the government (federal/state/local) act as a filter between corporations and education. While the government is not infallible, I don't see them passing legislation that says "we'll give you (school) $1m to buy Apple computers" but rather "we'll give you $1m to upgrade your computer resources". Now obviously I don't have a transcript of discussion between Apple's lobbyists and government officials (wouldn't it be cool if we the people could see that though), but generally earmarks of that actually name corporations raise intense objections.

Regardless I'm with the others, 390k is insignificant in the lobbying world. I don't have exact numbers, but Microsoft by comparison spent $2m last quarter in lobbying.

Apple is actually rather apolitical.

[Inkling]

Going cap in hand for stimulus money illustrates that, while Apple's board and execs may know technology, they know nothing about economics. Nerds tend to be that way. I worked for a biotech firm in 1982 and couldn't believe the number of Perot supporters with PhDs I met.

France and Germany refused to 'stimulate' their economies, regarding what we were doing as foolish. Both have now registered (slight) positive growth. Our grow remains negative in part because the stimulus sucked so much money out of the economy and put it into political pork and a still more massive debt to China. Even more important, Obama no longer inspires respect. His administration can't even run a giveaway like Cash for Clunkers, and yet they think they can transform health care in this country. Not one in business with any sense invests in that climate, particularly the small businesses who create most new jobs.

I live in Seattle. Last November it seemed that almost every bumper had a Obama/Biden sticker. In the over thirty years I've lived here, I've never seen election stickers disappear so fast. And what is true in 'blue' Seattle, is true almost everywhere. Since WWII, only one president has polled this unpopular this early in office.

[PaulMJohnson]

Originally Posted by Booga

$390K in lobbying? That's peanuts! That's 1/3 of one day of revenue at the Manhattan Apple Store also mentioned in the article. That's a few full-time folks. I don't even know why that's news.

This gets to the nub of this whole point. Whether you agree with a big company trying to get the government to push policies favourable to them or not, the fact is it happens, and Apple seem to be spending amazingly little on it.

[teckstud]

The article fails to mention that the location of that store has a lot to do with its success as well as the iPhone. The GM Building where it is located is the Premier Class A building of NYC with the best location in all of Manhattan. SJ could not have made a better choice.
It is surrounded by Bergdorf Goodman, FAO Shwarz, the Plaza Hotel, the Pierre Hotel,and Central Park.
Also the cube itself is iconic in its own right. Tourists flock just to see "the cube".

MS should open its store up in the zoo across the street where it belongs.

[Maury Markowitz]

Originally Posted by jb510

Then if we just get some nice company to provide text books for free we'll be all set.

Seymour Skinner: We can buy real periodic tables instead of these promotional ones from Oscar Meyer.
Edna Krabappel: Who can tell me the atomic weight of bolognium?
Martin: Ooh ... delicious?
Edna Krabappel: Correct. I would also accept snacktacular.

Maury

[bwik]

Originally Posted by teckstud

MS should open its store up in the zoo across the street where it belongs.

Microsoft is a completely different kind of company. The ways Microsoft makes its money, do not require stores. In fact they try to stay out of the public spotlight. Microsoft makes its money in dark rooms, with companies held hostage by MS-trained IT staff who are fiercely loyal to the brand. CEOs, government leaders do not know computer stuff. Therefore, MS maintains its market.

Apple needs a store to sell to actual people, on the basis of the merit of the products. Microsoft could not operate such a store, because they do not make products like that. Similarly, Apple can't make money the way Microsoft does. They are in different industries, basically. The constant AAPL - MSFT comparisons are too literal. They are both in the computer industry, but that does not mean they are playing the same game.

[iReality85]

Originally Posted by teckstud

The article fails to mention that the location of that store has a lot to do with its success as well as the iPhone.

Ugh what? I'm pretty sure the combination of words "5th Avenue Store" is synonymous with high sales, glitz, and success. If you can name a ritzier shopping district in NYC, please let me know.

[teckstud]

Originally Posted by bwik

Microsoft is a completely different kind of company. The ways Microsoft makes its money, do not require stores. In fact they try to stay out of the public spotlight. Microsoft makes its money in dark rooms, with companies held hostage by MS-trained IT staff who are fiercely loyal to the brand. CEOs, government leaders do not know computer stuff. Therefore, MS maintains its market.

Apple needs a store to sell to actual people, on the basis of the merit of the products. Microsoft could not operate such a store, because they do not make products like that. Similarly, Apple can't make money the way Microsoft does. They are in different industries, basically. The constant AAPL - MSFT comparisons are too literal. They are both in the computer industry, but that does not mean they are playing the same game.

The fact is that MS is opening stores. So are you saying the reason MS is opening stores is simply a diversion? Why are they opening them if they do not require them?

[teckstud]

Originally Posted by iReality85

Ugh what? I'm pretty sure the combination of words "5th Avenue Store" is synonymous with high sales, glitz, and success. If you can name a ritzier shopping district in NYC, please let me know.

5th Avenue means nothing in itself. 5th Avenue runs for miles. Have you ever been to NYC?
5th Ave at the Empire State Building location does not carry the same clout- nor does 5th Ave near the Public Library. Madison Avenue is the real shopping street anyway. This particular location is at the crossroads of business, tourism, and ultra high income residential- completely unique.
I was the accountant for that building- it has always had one of the highest cost per square foot rates in NYC. It is 50 floors high and a block by a full city block long. Its finish is marble not concrete. It always has had an amazing presence in NYC ever since it was built in the sixties. Apple sits where, amongst other stores, Vidal Sasson once had his hair salon back in the mod sixties and seventies.

[DaveGee]

Originally Posted by PaulMJohnson

This gets to the nub of this whole point. Whether you agree with a big company trying to get the government to push policies favourable to them or not, the fact is it happens, and Apple seem to be spending amazingly little on it.

Fun little fact...

Q: Who was one of the major voices in D.C. pushing for U-NII (what eventually led us to open wifi as we know it today)

A: Apple

Strange but true and totally unspoken.

Dave

[PaulMJohnson]

Originally Posted by DaveGee

Fun little fact...

Q: Who was one of the major voices in D.C. pushing for U-NII (what eventually led us to open wifi as we know it today)

A: Apple

Strange but true and totally unspoken.

Dave

I wonder why?

[paxman]

Originally Posted by jb510

Sorry but I'd like to keep corporations OUT of schools entirely.

I wouldn't mind as long as they dished out cash without stings. They ought to. A well educated population is good for business across the board, period. Lobbyists should be banned and politicians should all fight for open standards and everybody would be happy.

[anantksundaram]

Originally Posted by SpamSandwich

Lobbying is a legal activity.

Wow, and all this time, I thought K Street was a rampant Mafia den!

[anantksundaram]

Originally Posted by elroth

Do you know what Apple's prices are for schools that buy Macs in volume? I thought not.

As far as parents, prices were lowered this year on Macs - around 10% for 13-inch MacBooks (now Pros), and some retailers are discounting them another 10% or more (I don't know about educational prices).

I know that the institution that I work for, in the education sector, sells them in the thousands. We get it at no more/no less than the Apple Education Store price. (Incidentally, do you know the answer to your own snarky question? I thought not....)

Prices were lowered, yes, but still out of reach of many public schools and their clientele. Indeed, if they were flying off the shelf as a result, Tim Cook wouldn't be complaining about the softness in school demand, would he? (To paraphrase, I didn't think so). Incidentally, please name the retailer that is offering a 10% discount on, say, the current line of MBPs.

It's not the amount Apple is spending on lobbying that I am questioning (responding to some of the sentiments expressed in other posts), as much as the principle of it: I am getting tired corporations seeking a piece of the stimulus pie for just about everything.

[anantksundaram]

Originally Posted by jb510

It seems your [sic] saying that education therefore should be funded by the benevolence of private companies?

I don't wish to sidetrack this discussion, since I've already gone quite a bit in that direction. So I'll answer this one question and stop there: No I am not.

[Camera Guy]

Why would you ever go to a store that you can't get in the door when the products are available everywhere including online. Once you have seen a mac you have seen them all. Wow Apple people are just a bunch of lemmings.

[ascii]

$390k of corrupt politicians.