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Apple's 'spaceship' campus budget balloons from $3 billion to $5 billion - Page 2

post #41 of 73
Quote:
Originally Posted by Rot'nApple View Post

Who the heck budgeted this thing? If I gave an estimate of three bucks and it turned out to be five, no sweat. But if one was looking to spend 3 billion and it turned out to be $5 billion??? That's some serious scratch!

first quote made up from thin air

second quote you go to the contractors with finished plans and numbers and they calculate how much work it will take and give you a realistic number

first quote was in a recession. i bet the price of materials is higher now than a few years ago as well.

post #42 of 73
Quote:
Originally Posted by zoffdino View Post

Dangerous thinking, my friend. Having a lot of cash doesn't mean you are allowed to squander it all away. This is exactly a reason why I, as an investor, don't like corporations keeping too much cash on hand. They will fall into the mindset of "we have too much, this amounts to nothing". They will build corporate jets, pay for expensive retreats, or overpay on acquisitions (think Microsoft). I prefer that company keeps a good amount of cash, say $50B, for capital projects, R&D and acquisitions, and distribute the rest to investors. With their cash hoard near $150B now, you've gotta admit it's more than they need to run their operations.


So you actually prefer, as an investor, that they use their money to pay you money. OKAAAAY.

As an investor, I prefer they use their money to buy you out so I don't have to read that crap again.

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #43 of 73
Quote:
Originally Posted by al_bundy View Post

second quote you go to the contractors with finished plans and numbers and they calculate how much work it will take and give you a realistic number

first quote was in a recession. i bet the price of materials is higher now than a few years ago as well.

Serious question. Such quotes for multi-year projects are not made in nominal (i.e., price inflation-included) dollars!?

post #44 of 73
Quote:
Originally Posted by anantksundaram View Post

Serious question. Such quotes for multi-year projects are not made in nominal (i.e., price inflation-included) dollars!?

It can be, but typically is not.

In most cases, the contractor either absorbs any inflation or locks in the price of key raw materials as soon as they get the contract. Only rarely would someone building something like this agree to an inflation adjustment for the capital cost.
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Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #45 of 73
Quote:
Originally Posted by GadgetCanada View Post

How can anyone accurately price a building like this? Yea it will be round with custom curved glass panels and the entire 30 acre roof will be solar panels. Plus all the custom and cutting-edge stuff we don't even know about and it will take 5 years to complete. The original quantity surveyor probably screwed up the original estimate or didn't have enough information to price it properly.

If the contractor is competent to build it, they should be able to price it.

There are, however, many unknowns. For example, someone pointed out above that if Apple changed the plans, that would greatly increase the price. Or maybe Apple relied on a 'budgetary' price for their estimates and the actual firm prices are coming in higher (which is not at all unusual, although a 67% increase is).
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #46 of 73
Quote:
Originally Posted by zoffdino View Post

AI reported that each tree would cost $60K to relocate.

 

I call BS on that estimate unless they're bringing them from, say, Armenia. We had a 25' tall, 8" trunk diameter maple tree planted in our front yard for a total of under $900.

post #47 of 73
Quote:
Originally Posted by NeilM View Post

I call BS on that estimate unless they're bringing them from, say, Armenia. We had a 25' tall, 8" trunk diameter maple tree planted in our front yard for a total of under $900.

Even in Business Class it wouldn't cost that much from Armenia. For $60,000 I'd expect them to come from some magical land called Apricotia

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #48 of 73

Analysts predict Apple to release less expensive plastic iCampus iSpaceShip.  

 

Asian rumor sites are showing what may be fake photos of iCampus cases, for Apple fans who want to cover up the cheap plastic look:

 

tap-a-draft-replacement-rubber-washer.jpg

 

 

Supply chain analyst, Sukkma Balhs, thinks Apple will release a new iCampus Mini, but it won't be retina quality, at least in the first release. 

post #49 of 73
Quote:
Originally Posted by Rot'nApple View Post

Who the heck budgeted this thing? If I gave an estimate of three bucks and it turned out to be five, no sweat. But if one was looking to spend 3 billion and it turned out to be $5 billion??? That's some serious scratch!

 

They probably ran into difficulties installing the warp engines.

Life is too short to drink bad coffee.

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Life is too short to drink bad coffee.

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post #50 of 73
Quote:
Originally Posted by msimpson View Post

Analysts predict Apple to release less expensive plastic iCampus iSpaceShip.  

Asian rumor sites are showing what may be fake photos of iCampus cases, for Apple fans who want to cover up the cheap plastic look:

tap-a-draft-replacement-rubber-washer.jpg


Supply chain analyst, Sukkma Balhs, thinks Apple will release a new iCampus Mini, but it won't be retina quality, at least in the first release. 

... and down goes AAPL on this 'news' ... 1wink.gif
Been using Apple since Apple ][ - Long on AAPL so biased
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Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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post #51 of 73
Quote:
Originally Posted by GadgetCanada View Post

How can anyone accurately price a building like this? Yea it will be round with custom curved glass panels and the entire 30 acre roof will be solar panels. Plus all the custom and cutting-edge stuff we don't even know about and it will take 5 years to complete. The original quantity surveyor probably screwed up the original estimate or didn't have enough information to price it properly.

Not to mention once they put the contracts out to bid the price got inflated, just because it is Apple. Those contractors will earn their money though complying with the obsessive attention to detail required by Apple.

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Life is too short to drink bad coffee.

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post #52 of 73

Spaceship 2 will come out in 2017, will be 20% lighter, 14.7% smaller, come in white or black, and still cost the same.

post #53 of 73
Uh, anyone that has been involved in any ambitious building project knows that this is par for the course- The initial estimate is almost ALWAYS way, way off.

Also, investor relations nightmare? I thought investors were running around shrieking with concern about how much money Apple has in the bank, shouldn't they be satisfied that some of it is being used? Apple can do whatever the **** it wants with it, and I can't think of a better use $5B for a new HQ that is going to serve them for the next few decades. Their hoard is approaching $150B, this is nothing but a drop in the bucket considering the real, significant benefits. Instagram was acquired for $1B. Motorola, $8B. Skype, $12B. A state of the art HQ for the most successful company on the planet is worth every penny.
post #54 of 73
Apple has the dough. I say build Jobs' dream. Then rule the world.
post #55 of 73
Quote:
Originally Posted by jragosta View Post


If the contractor is competent to build it, they should be able to price it.

There are, however, many unknowns. For example, someone pointed out above that if Apple changed the plans, that would greatly increase the price. Or maybe Apple relied on a 'budgetary' price for their estimates and the actual firm prices are coming in higher (which is not at all unusual, although a 67% increase is).

I suspect we'll see a followup article later that details this. Isn't it possible that the plans changed somewhere in there prompting the updated figure?

post #56 of 73
Quote:
Originally Posted by hmm View Post

I suspect we'll see a followup article later that details this. Isn't it possible that the plans changed somewhere in there prompting the updated figure?


What did they do... add a second donut?!

 

Shit, man, they haven't started building it yet and the price has supposedly gone up dramatically. Most likely by the time they are done it will be $ 7 billion +.

 

If I was on the board and this report was true I'd be very very concerned.

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post #57 of 73
Quote:
Originally Posted by GadgetCanada View Post

I doubt contractors have even priced this yet. Usually they would bring a quantity surveyor consulting firm to come up with an original estimate. This is done again just before the tender drawings and documents go to the contractors for pricing to make sure the budget is still on track. Obviously with that kind of a jump, the original estimate was not even close or the design changed.

 

This happens quite often when the second estimate is calculated.

 

In government projects I've always called the first estimate the Politician's Budget. The second estimate is a mix of the Politician's Budget and the real estimate. The third and final actual end cost just follows along the line that it is easier to ask for forgiveness than it is to ask for permission.

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post #58 of 73
Quote:
Originally Posted by island hermit View Post

Quote:
Originally Posted by SolipsismX View Post


I can certainly help with that. I coincidently started today an apricot tree relocation service. Only $180,000 per tree.


Just to remind you... this is not a military contract.


Sure it is. Thermonuclear is IN in Cupertino /s

post #59 of 73

If you read the article closely you'll discover that what they're portraying as a cost "overrun" is actually an expansion of the project's scope. "Cost overruns are to be expected on large construction projects, and the scale of this one has evolved—from an initial plan to accommodate 6,000 employees, to offices for 12,000 or even 13,000 in one place." So the project was intentionally doubled in size to accommodate more people but Businessweek is choosing to characterise it as an overrun, as if it was unintentional.

post #60 of 73
How long can they keep selling their gadgets at a premium? Will this mothership beam me aboard?
post #61 of 73
Quote:
Originally Posted by anantksundaram View Post

It's stuff like this that gives CEOs pause in building their US presence. Whether it's in the government or in the private sector, stuff never seems to come in on budget or on time.

 

A 67% budget balloon, if true, is absolutely ridiculous.

 

You obviously didn't read the article because it's because of the CEO's wishes that the costs are ballooning.  Jobs wanted specific products, wanted it to built in a non-efficient way, wanted it spit and polished, and to higher standards than normal (drywall or wall products had to be 1/32" apart instead of 1/8").

 

I think he did go a bit overboard, but then, considering they have over a $100 Billion, what's a measly $5 Billion.  Banks probably spend that amount or more on alot of their skyscraper headquarters.

post #62 of 73
Quote:
Originally Posted by Slurpy View Post
Instagram was acquired for $1B. Motorola, $8B. Skype, $12B. A state of the art HQ for the most successful company on the planet is worth every penny.

You forgot the mother of them all: Autonomy by HP for $11B (of which $8.8B was promptly written off; this coming on the heels of $8B in EDS's value being written off by HP in 2008)! 

 

I think the US Dept of Energy has a better track record.....lol.gif

post #63 of 73
Quote:
Originally Posted by Leonard View Post

 

You obviously didn't read the article because it's because of the CEO's wishes that the costs are ballooning.  Jobs wanted specific products, wanted it to built in a non-efficient way, wanted it spit and polished, and to higher standards than normal (drywall or wall products had to be 1/32" apart instead of 1/8").

 

I think he did go a bit overboard, but then, considering they have over a $100 Billion, what's a measly $5 Billion.  Banks probably spend that amount or more on alot of their skyscraper headquarters.

You obviously didn't understand what I wrote.

 

CEOs come up with investment plans based on estimates of what they think it will cost. Not based on what they think it will cost + 67%.

post #64 of 73

I'd be fine with them spending yet another two billion if they manage to grab those apartments, get the full plot, and redesign the main building to be the TRUE original vision.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #65 of 73
Quote:
Originally Posted by bigpics View Post

It seems clear to me that Jobs' intimations of his own mortality overlapped somewhere in the conception and design of the new campus - and while it should be a functional structure, its aesthetic overspeccing is a metaphorical pyramid/memorial ("seamless," "all curved," the heartwood of specific maples, the transplantation of mature trees [to look "finished" as soon as built], etc.).

 

I read a comment somewhere that alluded to some zen/buddhist "circle" completion in reference to the video of Jobs' proposal of the new campus to the Cupertino City Council (http://www.youtube.com/watch?v=gtuz5OmOh_M if anyone hasn't seen it) but can't find it, and they had a term for it. Was it this?

 

http://en.wikipedia.org/wiki/Ensō

 

or

 

http://en.wikipedia.org/wiki/Saṃsāra_(Buddhism) ?

post #66 of 73
This "spaceship" campus will be the downfall of Apple. There is absolutely nothing to be gained from this ridiculous expense.
post #67 of 73
Originally Posted by 76roea View Post
This "spaceship" campus will be the downfall of Apple. There is absolutely nothing to be gained from this ridiculous expense.

 

Never having to pay for building rental again

Having the space to expand in the future without building or buying new buildings

Having the entire Cupertino operation together in two, fully-owned complexes a short drive away from each other instead of scattered around the region

Being able to collaborate more easily given that nearly everyone is under one roof

Reclamation of concrete for foliage

Beautification of industrial park and surrounding area

Increased morale from all of the above

 

Yeah, you certainly know anything at all about what you're saying¡

 

Wish we could just dump these fools right off the bat.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #68 of 73
Quote:
Originally Posted by fastasleep View Post

 

I read a comment somewhere that alluded to some zen/buddhist "circle" completion in reference to the video of Jobs' proposal of the new campus to the Cupertino City Council (http://www.youtube.com/watch?v=gtuz5OmOh_M if anyone hasn't seen it) but can't find it, and they had a term for it. Was it this?

 

http://en.wikipedia.org/wiki/Ensō

 

or

 

http://en.wikipedia.org/wiki/Saṃsāra_(Buddhism) ?

 

Here's the closest I can find — good synopsis of the idea anyway:

http://blog.archpaper.com/wordpress/archives/29794

post #69 of 73
Quote:
Originally Posted by island hermit View Post


What did they do... add a second donut?!

Shit, man, they haven't started building it yet and the price has supposedly gone up dramatically. Most likely by the time they are done it will be $ 7 billion +.

If I was on the board and this report was true I'd be very very concerned.

Consider that these things often present an incomplete picture. Either proposal would have line items and costs associated with them as well as further detail. I really don't know what changed. I can understand the board being concerned about cost, but the article mentions that they were looking at things to cut.
post #70 of 73
post #71 of 73
I would rather they spend the 2 Billion more to adhere to Job's standard. And 12,000 workers are a relatively small size comparing to Google. They have more that that just for engineers.
post #72 of 73
[quote name="anantksundaram"
A 67% budget balloon, if true, is absolutely ridiculous.
[/quote]

PEANUTS 4 Apple
post #73 of 73
Quote:
Originally Posted by SolipsismX View Post

The Burj construction labor and costs have a lot more in common with the Great Pyramids of Giza than with Apple's new campus.

Also note it's estimated Apple has already spent about 1/2 billion dollars on just the property.

And of course, the Burj Khalifa was built by Samsung construction. Maybe Apple should hire Samsung Engineering & Construction Group instead.
Edited by peter236 - 4/5/13 at 3:15pm
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