Apple CEO Tim Cook cites GOP tax reform as driver in $350B US investment
Following Apple's announcement of plans to repatriate a chunk of its overseas cash to infuse some $350 billion into the U.S. economy over the next five years, CEO Tim Cook took part in an interview addressing the company's investment strategy, the iPhone slowdown controversy and more.
Speaking with ABC News' "World News Tonight with David Muir," Cook discussed the intricacies of Apple's forthcoming investment, which will incur a foreign tax bill of $38 billion.
Earlier on Wednesday, Apple foreshadowed a major shift in financial policy when it announced plans to repatriate a portion of its overseas cash hoard, a move that will pump $350 billion into the U.S. economy. That money will in part go toward a new campus and the generation of 20,000 jobs.
The company expects to pay $38 billion in taxes on the repatriated funds, a sum it says is the largest ever of its kind.
In a one-on-one with reporter Rebecca Jarvis, Cook explained that recent U.S. tax policy changes allowed for the huge capital commitment. Still, the executive insists that some changes, perhaps the grant of employee stock bonuses, would have been made "in any situation."
"Let me be clear, there are large parts of this that are a result of the tax reform, and there's large parts of this that we would have done in any situation," Cook said.
Jarvis suggested President Trump's tax bill is a "huge windfall" for Apple, a statement Cook did not directly refute.
"There are two parts of tax bill, there's a corporate piece and an individual piece," Cook explained. "I do believe the corporate tax side will result in job creation and a faster growing economy."
Just prior to the ABC News exclusive, Trump tweeted out a message taking credit for Apple's announced investments.
"I promised that my policies would allow companies like Apple to bring massive amounts of money back to the United States. Great to see Apple follow through as a result of TAX CUTS. Huge win for American workers and the USA!" Trump wrote.
The conversation moved on to Apple's handling of iPhone battery issues. In 2016, Apple released an iOS update to deal with unexpected iPhone 6, 6s and SE shutdowns related to depleted battery cells. Release notes issued at the time did not specify how, exactly, the software fix handled the apparent problem, but users late last year discovered evidence that it throttled processor speeds.
Amid pressure from customers and media outlets, Apple in December confirmed iOS temporarily slows down processor-intensive tasks on iPhones with degraded batteries in an effort to keep those devices operating smoothly. The revelation has since spawned numerous class-action lawsuits and government inquiries into so-called planned obsolescence.
"When we did put it out, we did say what it was, but I don't think a lot of people were paying attention and maybe we should have been clearer, as well" Cook said. "And so we deeply apologize for anybody that thinks we had some other kind of motivation."
Finally, Jarvis asked whether Apple's decision to bring money back into the U.S. will result in a cheaper iPhone. Cook dismissed the idea, saying the "the phone costs what the innovation inside of it costs." She also confirmed with Cook that Apple's new campus will not be located in California or Texas, where the company already operates large facilities.
Speaking with ABC News' "World News Tonight with David Muir," Cook discussed the intricacies of Apple's forthcoming investment, which will incur a foreign tax bill of $38 billion.
Earlier on Wednesday, Apple foreshadowed a major shift in financial policy when it announced plans to repatriate a portion of its overseas cash hoard, a move that will pump $350 billion into the U.S. economy. That money will in part go toward a new campus and the generation of 20,000 jobs.
The company expects to pay $38 billion in taxes on the repatriated funds, a sum it says is the largest ever of its kind.
In a one-on-one with reporter Rebecca Jarvis, Cook explained that recent U.S. tax policy changes allowed for the huge capital commitment. Still, the executive insists that some changes, perhaps the grant of employee stock bonuses, would have been made "in any situation."
"Let me be clear, there are large parts of this that are a result of the tax reform, and there's large parts of this that we would have done in any situation," Cook said.
Jarvis suggested President Trump's tax bill is a "huge windfall" for Apple, a statement Cook did not directly refute.
"There are two parts of tax bill, there's a corporate piece and an individual piece," Cook explained. "I do believe the corporate tax side will result in job creation and a faster growing economy."
Just prior to the ABC News exclusive, Trump tweeted out a message taking credit for Apple's announced investments.
"I promised that my policies would allow companies like Apple to bring massive amounts of money back to the United States. Great to see Apple follow through as a result of TAX CUTS. Huge win for American workers and the USA!" Trump wrote.
The conversation moved on to Apple's handling of iPhone battery issues. In 2016, Apple released an iOS update to deal with unexpected iPhone 6, 6s and SE shutdowns related to depleted battery cells. Release notes issued at the time did not specify how, exactly, the software fix handled the apparent problem, but users late last year discovered evidence that it throttled processor speeds.
Amid pressure from customers and media outlets, Apple in December confirmed iOS temporarily slows down processor-intensive tasks on iPhones with degraded batteries in an effort to keep those devices operating smoothly. The revelation has since spawned numerous class-action lawsuits and government inquiries into so-called planned obsolescence.
"When we did put it out, we did say what it was, but I don't think a lot of people were paying attention and maybe we should have been clearer, as well" Cook said. "And so we deeply apologize for anybody that thinks we had some other kind of motivation."
Finally, Jarvis asked whether Apple's decision to bring money back into the U.S. will result in a cheaper iPhone. Cook dismissed the idea, saying the "the phone costs what the innovation inside of it costs." She also confirmed with Cook that Apple's new campus will not be located in California or Texas, where the company already operates large facilities.
Comments
This is not "tax reform" on any level. This is a payday loan that YOU PEOPLE will need to pay back at 110% interest. Apple's effective tax rate is close to zero now and none of that is coming your way: you will not see an iMac Pro now starting at $1599 and $299 iPhones. Oh, and by the way: with the last two big tax cuts in the 80s and Bush, wages went NOWHERE. They did not rise. Hell, you all got a bigger tax cut in 2009 to offset the Great Recession, though most people, especially phony libertarian techie boyz don't believe they got one. Can't wait to for the parsing of paychecks in February to find that average $18.
I look forward to the furrowed brows of Americans in a vain attempt to understand things when they start filing their 2018 taxes next year. You people have been ripped off.
Good times.
"When we did put it out, we did say what it was, but I don't think a lot of people were paying attention and maybe we should have been clearer as well"
Maybe? And starting off with people weren't paying attention? That's some weasel wording there. I believe the motive was fine in preventing unexpected shutdowns, but they absolutely should have notified the user as soon as performance could be impacted, as many phone upgrades probably came when the user could have done with a battery swap.
And when they put it out all they said was they addressed shutdown issues, not that tested performance could be cut nearly in half (as on my 6S, that was doubly frustrating as one that went out with the flawed batteries that degraded in months, now THAT should have had a user notification for sure to come in for a swap).
What an interesting way you view other people's money, dude. You take LESS from them, and view that as payday loan. That is some double speak right there. Ever tried to run for a seat in the senate?
It amazes me just how different Steve Jobs was from Tim Cook. One is a visionary, the other ... a corporate bean counter.
Fortunately for Apple, they have a lot of beans to count now. But if they continue to shoot themselves in the foot, as with the new version of iTunes, that denies users the ability to arrange app icons on the iPhone, and a few other moronic moves, one wonders how long the Apple candle will burn.
Now I'm wondering where the new campus will be built—for God's sakes, NOT in California, I hope! What a sad "state of affairs" that is under wacko Gov. Brown!
A campus for customer support, eh? Hmmmm, sounds good to me!
Now I'm wondering what Adobe's response will be! If it's comparable to Apple's, maybe Adobe will invest similarly in customer support and give us back Americans who know a tad about their software and speak AMERICAN!!!
What? No MacMini demand?
Love them or hate them, this was a big win for the Republican Party and Trump.
Gary.
PS I was good at monopoly
The increase in debt is already known but historically the assumed increase in growth has fallen short but by the time folks can prove that, many of the folks that voted for the bill (either D or R) are out of office or simply hope that either no one understands or will believe that they didnt know it would turn out this way.
The difference, in many ways, is like investors looking for profit in the near term and companies structuring for near term profit to make them happy as opposed to looking at the long term and making those folks unhappy with more tepid near term growth.
As a deficit hawk and fiscal conservative this bill seems a lot more like the former (near term thinking) vs the latter (long term thinking).
It it would have been better to have cut spending to go along with cutting income but that would result in slower growth which looks bad and is painful. The party has really abandoned long term thinking on almost every front. Eventually that will bite us on the ass but nobody cares. They only care about the next election cycle which has always been true but it’s really bad and really obvious now.