Apple announces $1bn for ‘advanced manufacturing’ in the US
Apple CEO Tim Cook (pictured above) has announced plans to create a $1bn fund to invest in US companies that perform advanced manufacturing.
The iPhone maker’s pledge appears to be a way to show how it is creating US jobs in the wake of President Donald Trump’s outwardly protectionist policies.
Apple will announce the fund’s first investment later in May, Cook said during an interview on CNBC.
He also said Apple plans to fund programmes that could include teaching people how to write computer code to create apps, and will release more details about the effort this summer.
The announcements were the latest in a series of disclosures to highlight how Apple, the world’s largest company by market valuation, contributes to job creation in the United States.
Apple notably came under fire from President Donald Trump during his campaign because it makes most of its products in China.
In February during the company’s annual shareholder meeting, Cook said Apple spent $50bn in 2016 with its US suppliers, which include firms like 3M Co and Corning, the first time Apple has disclosed the metric.
Cook reiterated that point during the CNBC interview, along with Apple’s claim that it has created 2 million jobs in the United States, 80,000 of which are directly at Apple and the rest coming from suppliers and software developers for the company’s app ecosystem.
Apple is highlighting its US presence at the same time as lawmakers are considering a major tax proposal by Trump that would let Apple, along with other large companies, bring back accumulated profits from overseas at potentially lower tax rates. Ninety-three per cent of Apple’s $256.8bn cash is held overseas.
Cook, who met with lawmakers in Washington earlier this year to discuss tax policy and technology issues, said that Apple would have to borrow the cash for its US manufacturing investment fund and said he was hopeful Trump administration would address the repatriation issue.
Cook stopped short of saying Apple would bring some of its cash back into the United States if Trump’s tax proposal was enacted.
“To invest in the United States, we have to borrow. This doesn’t make sense on a broad basis. So I think the administration, you saw they’re really getting this and want to bring this (cash) back. And I hope that comes to pass,” Cook said in response to a question about tax reform.
In April Apple pledged to create all of its future products from recycled materials.
Imagination Technologies launches dispute
British chip maker Imagination Technologies has launched a formal dispute against Apple just a month after the iPhone maker said it would scrap royalty and licence agreements that make up half of the UK firm’s revenues.
The company is concerned Apple’s plans to replace Imagination’s intellectual property - used in the graphics processor units for Apple’s phones, tablets, iPods and TVs - with its own technology within the next two year risks violating the British company’s patents.
The move would also mean Imagination would not be eligible for Apple’s royalty payments and licence fees, which brought in £60.7m in revenues in the year to 30 April.
That accounted for half of the £120m made in group revenue from continuing operations for the last financial year.
Imagination said in a trading update that while it had proposed “alternative” commercial arrangements with Apple, the two companies failed to reach a deal.
Oliver Knott, an equity analyst at N+1 Singer, said Imagination was not in a strong selling position.
“It is unclear how the dispute resolution process will move the conversation on, but it is a necessary step before the group can take any further action,” he said.
“There is no guarantee the group will commence full legal action, which would be very costly.”