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Apple-sparked 'App Economy' created 466K U.S. jobs in 4 years

post #1 of 43
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When Apple launched the App Store alongside the iPhone 3G in July, 2008, it offered both a platform and distribution hub for developers to easily write and monetize software, and effectively created a new economy that a study estimates has generated about 466,000 jobs.

A report released on Tuesday by TechNet (.pdf link) claims that the so-called "App Economy," a term coined in 2009 and brought into mainstream use by a November 2009 Business Week cover story, has grown beyond Apple's App Store to become an entity of its own that has seen steady growth over the past four years.

TechNet, a bipartisan political network of tech CEOs and Senior Executives, tapped consulting firm South Mountain Economics LLC to quantify the size and impact of the App Economy by researching keywords in help-wanted ads, want-ad to employment ratio, tech employment to total employment ratio and job multipliers. The study was meant to illustrate the effect innovation has on job creation, and is not limited to developers alone but also counts management, creative and other staff associated with app production.

What the company came up with was a detailed and surprising analysis of a fast-growing industry that is responsible for roughly 466,000 jobs in the U.S., and includes employment stats from "pure" app companies like Zynga as well as app-related positions from major software developers like Electronic Arts and AT&T.

Included in the study were statistics from the major mobile operating systems including Android, iOS, Blackberry, Facebook and the various iterations of what is now Microsoft's Windows Phone platform.

“The App Economy, along with the broad communications sector, has been a leading source of hiring strength in an otherwise sluggish labor market,” said the report’s author Dr. Michael Mandel, President of South Mountain Economics and former Chief Economist for BusinessWeek.


App Economy by the numbers. | Source: TechNet


California tops the list of states with the highest percentage of App Economy jobs recording nearly one in every four sector positions going to the new industry, and is followed by New York and Washington with 6.9 percent and 6.4 percent, respectively.

Growth for App business employment saw a relative slowdown in growth during 2011, though the average number of tech want ads containing the word "app" was 45 percent higher than the year before.


Source: TechNet


Apple recently announced that it had paid developers over $4 billion since the launch of the App Store, and the company's over 315 million iOS devices sold has helped software engineers make $700,000 during the last quarter alone.

[ View article on AppleInsider ]
post #2 of 43
I'm upset these jobs aren't going to Foxconn workers¡

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post #3 of 43
This is an interesting rebuttal to the New York times piece, specifically this:

"Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apples contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apples other products. But almost none of them work in the United States."
http://www.nytimes.com/2012/01/22/bu...dle-class.html

Although it is doubtful the "App Economy" jobs are the high-wage, stable union jobs of the 1950s, they're still jobs.
post #4 of 43
I can't believe it! I mean I can believe it! I was just wishing for figures like this yesterday!

The Apple effect begins to be felt and measured. The computer-in-your-pocket revolution is going to be bigger than the first one in the 80s and 90s.

Ok, it's not just Apple, but they really started it with their pocket Internet browser that just happened to be a phone, in 2007. And I guess the tablet is really the computer in your hand, but it's ten times more accessible than a laptop.
post #5 of 43
Quote:
Originally Posted by SolipsismX View Post

I'm upset these jobs aren't going to Foxconn workers.

post #6 of 43
Quote:
Originally Posted by SolipsismX View Post

I'm upset these jobs aren't going to Foxconn workers.

You better add the /sarcasm tag before noobs roast you LOL
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post #7 of 43
Quote:
Originally Posted by shadash View Post

This is an interesting rebuttal to the New York times piece, specifically this:

"Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apples contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apples other products. But almost none of them work in the United States."
http://www.nytimes.com/2012/01/22/bu...dle-class.html

Although it is doubtful the "App Economy" jobs are the high-wage, stable union jobs of the 1950s, they're still jobs.

The article isn't claiming 430K jobs from the Apple App Store alone. The Android Market, Blackberry Appstore, Amazon's apps, Microsoft's, etc are all included in the estimate of jobs created.
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post #8 of 43
Quote:
Originally Posted by Flaneur View Post

I can't believe it! I mean I can believe it! I was just wishing for figures like this yesterday!

The Apple effect begins to be felt and measured. The computer-in-your-pocket revolution is going to be bigger than the first one in the 80s and 90s.

Ok, it's not just Apple, but they really started it with their pocket Internet browser that just happened to be a phone, in 2007. And I guess the tablet is really the computer in your hand, but it's ten times more accessible than a laptop.

It is just beginning, I am seriously thinking of buying another load of AAPL despite the current high. 'I don't think we've seen anything yet' as they say.
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post #9 of 43
20 app categories. You need to be in the top 100 in a category to make a living from the App Store (I'm an app developer, I'm usually in the top 100, so I base this assumption on my personal experience). If we ignore the fact that one programmer can make several apps (I used to have 5 apps once), and sometimes several people make one app, we will have 20 x 100 = 2000. Ok, let's multiply this by 10, and we'll have 20k. This should include the Apple stuff who "test" the apps and writes the server code and so on, because they are paid from the Apple's 30% cut, and as Apple said that's a break-even business for them. How on earth did they come out with 466k? That's beyond me.
post #10 of 43
Quote:
Originally Posted by Gatorguy View Post

The article isn't claiming 430K jobs from the Apple App Store alone. The Android Market, Blackberry Appstore, Amazon's apps, Microsoft's, etc are all included in the estimate of jobs created.

I bet it's a safe bet most develop for iOS plus perhaps some other platforms too while few will be excluding iOS. I'm trying to say iOS is most likely responsible for the bulk of those numbers.
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post #11 of 43
Quote:
Originally Posted by Gatorguy View Post

The article isn't claiming 430K jobs from the Apple App Store alone. The Android Market, Blackberry Appstore, Amazon's apps, Microsoft's, etc are all included in the estimate of jobs created.

True, but I think it is safe to stay that without Apple the "App Economy" would not exist - at least not nearly on the scale it does now. The $4 billion paid out to App Store developers dwarfs payouts by the rest you mentioned.
post #12 of 43
Quote:
Originally Posted by digitalclips View Post

I bet it's a safe bet most develop for iOS plus perhaps some other platforms too while few will be excluding iOS. I'm trying to say iOS is most likely responsible for the bulk of those numbers.

Perhaps, but based on this I'd suggest no, not the majority of the estimated jobs, altho Apple would be a significant source.
"The App Economy includes pure and infrastructure careers across Apple, Google, Facebook, Zynga, Electronic Arts, Amazon, AT&T and other app-related positions at large technology companies based in America...

Professions in the industry include positions for programmers, user interface designers, marketers, managers, and support staff."

Of course the entire study is crafted by the tech industry themselves, so no idea how "real" it is.
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post #13 of 43
This is outsourcing..right?
post #14 of 43
Quote:
Originally Posted by Gatorguy View Post

The article isn't claiming 430K jobs from the Apple App Store alone. The Android Market, Blackberry Appstore, Amazon's apps, Microsoft's, etc are all included in the estimate of jobs created.

I agree - obvious exaggeration to say 430K. It's probably only 425K.
post #15 of 43
Quote:
Originally Posted by serkol View Post

20 app categories. You need to be in the top 100 in a category to make a living from the App Store (I'm an app developer, I'm usually in the top 100, so I base this assumption on my personal experience). If we ignore the fact that one programmer can make several apps (I used to have 5 apps once), and sometimes several people make one app, we will have 20 x 100 = 2000. Ok, let's multiply this by 10, and we'll have 20k. This should include the Apple stuff who "test" the apps and writes the server code and so on, because they are paid from the Apple's 30% cut, and as Apple said that's a break-even business for them. How on earth did they come out with 466k? That's beyond me.

The problem with your maths is the idea that you have to make money from the app store. A big percentage is made by selling an app to a company that wants an app. For example company x wants an app to go with there eCommerce site, there going to go to an agency to build them one, so you have the person managing the project at company x, then at the agency a sales guy, project manager, technical manager, designer, and tester. The agency however have also learned that developers in developing countrys cost less and now outsource of load of work to them, so the outsorcing company also has a project manager, and a couple of developers. So that's 9 people not including any company boss's, cleaners, hr staff, fincance departments, people related to the agency advertising there services, people involved with hosting services for the apps, the list goes on. The app itself might only be a short term promotional thing, or it may just completely fail, but all those people will still earn money from the company that paid for it to be built.
post #16 of 43
post #17 of 43
Quote:
Originally Posted by anantksundaram View Post

I agree - obvious exaggeration to say 430K. It's probably only 425K.

I figured closer to 420K IMO.

/s
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post #18 of 43
Quote:
Originally Posted by shadash View Post

This is an interesting rebuttal to the New York times piece, specifically this:

"Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apples contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apples other products. But almost none of them work in the United States."
http://www.nytimes.com/2012/01/22/bu...dle-class.html

Although it is doubtful the "App Economy" jobs are the high-wage, stable union jobs of the 1950s, they're still jobs.


People have to realize that media is often slap-dash, and upon occasion purposefully so, to the detriment of those the media targets. Amazingly, there was even talk of a Pulitzer Prize for those NY Times articles that left out these salient facts!
post #19 of 43
Quote:
Originally Posted by shadash View Post

This is an interesting rebuttal to the New York times piece, specifically this:

"Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apples contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apples other products. But almost none of them work in the United States."
http://www.nytimes.com/2012/01/22/bu...dle-class.html

Although it is doubtful the "App Economy" jobs are the high-wage, stable union jobs of the 1950s, they're still jobs.

It's not really a rebuttal at all. To make an apples to apples comparison, you'd have to include all the people employed in the "GM economy" back in the day, including suppliers, auto mechanics, etc.
post #20 of 43
Quote:
Originally Posted by Gatorguy View Post

The article isn't claiming 430K jobs from the Apple App Store alone. The Android Market, Blackberry Appstore, Amazon's apps, Microsoft's, etc are all included in the estimate of jobs created.

The majority of the money in the 'app markets' is going to Apple developers, but let's be generous and say that only 1/2 of the jobs are related to Apple.

Apple has distributed $4 B over 4 years or so, but I'm sure that it started slow and moved up. So let's say that the developers got 1/2 of the total money last year - $2 B.

So we have $2 B for 215,000 jobs - or less than $10,000 per job. And that doesn't even allow for the fact that there are expenses for those employees - developer fees, taxes, electricity, computers, etc. So if the figures are accurate, those are not good jobs - roughly half of a minimum wage.

Frankly, I don't believe the estimate of 430,000 jobs. They must be including hobbyists who do it for fun and not as a job.
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post #21 of 43
The real story here has nothing to do with "jobs" in the macroeconomic or political sense. Instead, the interesting thing here is that there are a lot more people out there writing software for apple platforms using apple development tools. That's a radical transformation relative to just 5 years ago. It is a great benefit to Apple to have such a large developer community. For one thing, it creates a larger labor pool for Apple itself to hire from.
post #22 of 43
Amazing!
post #23 of 43
Quote:
Originally Posted by Blastdoor View Post

The real story here has nothing to do with "jobs" in the macroeconomic or political sense. Instead, the interesting thing here is that there are a lot more people out there writing software for apple platforms using apple development tools. That's a radical transformation relative to just 5 years ago. It is a great benefit to Apple to have such a large developer community. For one thing, it creates a larger labor pool for Apple itself to hire from.


Just wait until we see the numbers from the iBooks textbook platform

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post #24 of 43
Oh, how dare you write about this, don't we all know know that Apple only takes jobs outside of the US?

This article illustrates the problem with sensationalist reporting - like on Apples foreign manufacturing. Why didn't the NYT article note that while manufacturing jobs are overseas, buying Apple products creates jobs in the US? (I won't go into the utter failure to place the working conditions issue in any meaningful context.) At least Apple Insider readers are getting some information that can help them understand the whole picture of Apple's impact on the economy. The Gorrilla Glass story is another example - Apple's innovation revived an innovative product and helped give Corning's otherwise apparently dead product an new life.
post #25 of 43
Quote:
Originally Posted by Blastdoor View Post

It's not really a rebuttal at all. To make an apples to apples comparison, you'd have to include all the people employed in the "GM economy" back in the day, including suppliers, auto mechanics, etc.

I think its a partial rebuttal. But you make a really good point that I didn't think of. The GM economy is huge.
post #26 of 43
Quote:
Originally Posted by shadash View Post

This is an interesting rebuttal to the New York times piece, specifically this:

Yellow journalism doesn't need a rebuttal.
Quote:
"Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apples contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apples other products. But almost none of them work in the United States."

When did people in the USA becomes so self centered that they would rather see the rest of the world live in deplorable conditions? The thing that is being glossed over here is that many people in China are having their standard of living vastly improved by having these jobs available to them. Just because it isn't the standard that the rich left thinks the should have available to them doesn't make it any less of a vast improvement.
Quote:
Although it is doubtful the "App Economy" jobs are the high-wage, stable union jobs of the 1950s, they're still jobs.

BS. Write a good app and you will make millions where as a union worker seldom has much left to retire upon. More so the situation only gets better as more and more iOS devices hit the hands of users.

What makes these jobs almost idea is that they represent small independent businesses that are free of Unions and high over head. Thus the vast majority of the cash generated goes to the business owners who are often the developers themselves. It is pure capitalism at work.
post #27 of 43
None of this takes in account all the American jobs created by companies who make hardware add-ons for Apple iDevices like cases and covers! There must be... umm... never mind...
post #28 of 43
Quote:
Originally Posted by wizard69 View Post

Yellow journalism doesn't need a rebuttal.

When did people in the USA becomes so self centered that they would rather see the rest of the world live in deplorable conditions? The thing that is being glossed over here is that many people in China are having their standard of living vastly improved by having these jobs available to them. Just because it isn't the standard that the rich left thinks the should have available to them doesn't make it any less of a vast improvement.


BS. Write a good app and you will make millions where as a union worker seldom has much left to retire upon. More so the situation only gets better as more and more iOS devices hit the hands of users.

What makes these jobs almost idea is that they represent small independent businesses that are free of Unions and high over head. Thus the vast majority of the cash generated goes to the business owners who are often the developers themselves. It is pure capitalism at work.

Umm... not so much capitalism, more like free-enterprise which has been the real backbone of the U.S. economy since its beginning.
post #29 of 43
Quote:
Originally Posted by Blastdoor View Post

It's not really a rebuttal at all. To make an apples to apples comparison, you'd have to include all the people employed in the "GM economy" back in the day, including suppliers, auto mechanics, etc.

I mean really how far does one need to go here. Micron, Intel, Samsung, Toshiba, Corning and a host of others are all associated with Apple in one sense or another and are in the same way part of the Apple economy. Notably the list could go on for much longer but you get the idea.

Frankly all of this focus on Apples business in China is BS. It is no different than the TV manufacturing of the 60's leaving the US or the gentle decline of the US auto industry. Frankly Americans have been living high on the hog for so long now that we as a nation don't have a clue anymore about what it is like to actually manufacture something. I see this all the time in the forums here as people whine about why Apple can't build this or that in the USA. It is pretty simple they can't afford too.

By afford too I mean more than just the problem of producing an iPhone economically, there are other issues that one has to deal with such as lazy stupid workers, unions that protect those workers, outside interference from government in its various forms, taxes, the welfare system and the entitlement mentality that it creates and a host of other issues that makes US based manufacturing a difficult if not impossible idea. Until we have a massive make over with respect to social issues and start to admit to mistakes like the current regime in the White house we will never recover.
post #30 of 43
Yet all armchair critics talk about and focus on is why Apple isn't bringing those shitty low paying manufacturing jobs in China (that Americans don't want) back to the U.S.

All the high paying jobs that's involved in developing iDevices (software and hardware) is still here in the U.S.
post #31 of 43
Quote:
Originally Posted by Macky the Macky View Post

Umm... not so much capitalism, more like free-enterprise which has been the real backbone of the U.S. economy since its beginning.

Can one really have one without the other? Are they not more or less linked at the hip?

YOu do have an interesting point but I don't really see how you can have free enterprise without capitalism. Granted many of the companies that are part of the app economy don't have much capital or at least don't need much to get started, but others need to raise money and that is in part what capitalism is all about.

There is much negativity with regards to the works capitalism {definition: an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state} these days but I think those people are highly misguided. The definition comes right from my Mac. Now often the word is used to smear people but that is down with a very narrow meaning of the term.

Maybe the term free-enterprise is a new age term for those afraid to associate with their parents!
post #32 of 43
Tho nobody is actually talking about the article, this how I got my job. I was a unemployed industrial designer until I became an app developer in 2010.
post #33 of 43
The darker side to this story, that Apple doesn't want you to know, is that many of these people are working long hours, often in their own homes, with nothing to eat but pizza and soft drinks! In fact, a significant number of these laborers don't even own suits!
post #34 of 43
Quote:
Originally Posted by wizard69 View Post

By afford too I mean more than just the problem of producing an iPhone economically, there are other issues that one has to deal with such as lazy stupid workers, unions that protect those workers, outside interference from government in its various forms, taxes, the welfare system and the entitlement mentality that it creates and a host of other issues that makes US based manufacturing a difficult if not impossible idea. Until we have a massive make over with respect to social issues and start to admit to mistakes like the current regime in the White house we will never recover.

Hey, TRAITOR, go back to Red China where you belong. Or maybe they are paying you already?

"Lazy, stupid workers?" US workers work longer hours than anyone in the developed world.

Stupid? I met a kid here from China last Saturday. In his country only the top 2% of students get to go to university. We have a highly educated workforce, much better than most countries.

"Outside" interference from government? That is OUR government, not black helicopters manned by the UN. Our elected representatives voted for those regulations because Americans wanted safe workplaces, safe food, minimum wages and a clean environment. Go live in the pollution and exploitation of of Shanghai and see how you like it.

USA has either the largest (or second largest, depending upon how you count) manufacturing sector in the world. So you really believe it is tough to create jobs here, or are you just an anti-American BS artist? Lazy and stupid applied to you, not me and my fellow Americans.

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post #35 of 43
Quote:
Originally Posted by Gatorguy View Post

I figured closer to 420K IMO.

Heck, you're probably right: perhaps it's only 420K, not 430K.
post #36 of 43
I'm as much of an Apple fan as the next guy, but this sounds absurd. Taking the $4 billion number floated by Apple & dividing it by 466,000 people gives an average share of the pie of $8583/person. Assuming that this is divided out over however long the app store has been in existence, and the $ amount per year per person drops. Even assuming that half of the payouts have been in the last 12 months gives an average of less than $4300/ person. That number assumes no overhead or benefits. The numbers just don't add up.
post #37 of 43
Here's another number that just doesn't add up...


Quote:
Originally Posted by AppleInsider View Post

Apple recently announced that it had paid developers over $4 billion since the launch of the App Store, and the company's over 315 million iOS devices sold has helped software engineers make $700,000 during the last quarter alone.

This appeared in another article. Shouldn't that number be $7,000,000?....or $70,000,000??? $700K is nothing for a quarter and if one multiplies that $700K shocking figure by as many quarters as iPhone/iPad has been selling (20?), it adds up to a pittance. ($14,000,000 or $1.4B) Based on that quarterly figure, how can Apple have paid $4 BILLION since launch of the App Store?

Am I missing something?


Quote:
Originally Posted by mkral View Post

I'm as much of an Apple fan as the next guy, but this sounds absurd. Taking the $4 billion number floated by Apple & dividing it by 466,000 people gives an average share of the pie of $8583/person. Assuming that this is divided out over however long the app store has been in existence, and the $ amount per year per person drops. Even assuming that half of the payouts have been in the last 12 months gives an average of less than $4300/ person. That number assumes no overhead or benefits. The numbers just don't add up.

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post #38 of 43
It is a basic theory of Economics/Business is that when an economy grows, it went to a different level leaving the old behind. For example, why Americans do not produce garments anymore. Because they can produce Guns with the same resource and it gives a better return. Americans can buy Garments with the surplus. So, the whole system (education, aim in life, mindset) shifts. Since factory work is at a lower level than Corporate White Collar jobs or Intellectual Works, America have shiofted to that gear muchy earlier.

Do any American really wants to do Factory works? Do any School, College, politician, parents told you that you should do the factory work? Nobody. But in China and other countries, people are taught that way. They have Vocational Training Institutes which teach these kinds of things. People have an aspiration to work at Foxconn.

Once the Chinese economy grows sufficient and people start earning more than they used to, they will want more. It is Maslow's Need Hierarchy. You can't overstep the steps. You have to cross them one at a time.



Quote:
Originally Posted by Macky the Macky View Post

None of this takes in account all the American jobs created by companies who make hardware add-ons for Apple iDevices like cases and covers! There must be... umm... never mind...
post #39 of 43
Quote:
Originally Posted by mkral View Post

I'm as much of an Apple fan as the next guy, but this sounds absurd. Taking the $4 billion number floated by Apple & dividing it by 466,000 people gives an average share of the pie of $8583/person. Assuming that this is divided out over however long the app store has been in existence, and the $ amount per year per person drops. Even assuming that half of the payouts have been in the last 12 months gives an average of less than $4300/ person. That number assumes no overhead or benefits. The numbers just don't add up.

The methodology used in the article doesn't just look at direct employment, but also assumes an "employment spillover" factor of 1.5 (which seems pretty high to me, but I'm not an economist).

Their overall methodology was:
1. They found 44,400 non-duplicate help-wanted ads for "app economy" technical jobs (i.e. computer and math)
2. They Multiplied this by 3.5, assuming for every want ad there are actually 3.5 jobs
3. They assumed that for each tech job there is also one non-technical job (sales, marketing, HR, etc...)
4. They assumed a multiplier of 1.5 for spillover
5. 44.4K*3.5*2*1.5 = 466K

They also mention an estimate of $20 Billion for the App market.
post #40 of 43
The amount of money Apple pays iOS developers is only part of the equation!

The number of free apps that are created by companies is staggering -- look at Facebook, Home Depot, Amazon, and of course, many many others. People were hired to do these apps, even if they contracted the work out, somebody had to cut the code!

I think this is great news, and I know its improved the economy, considering that I know many people doing app development, who were outsourced, or otherwise; companies were started, just based on app development!

I don't think this news should poo-pood in any way. If you don't believe me, search for 'mobile app development companies' and see how many results & ads you get :-)

I personally credit Apple for this, because Windows Mobile & Palm were dead long before the iPhone, and Android would have never happened if it weren't for the iPhone.
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