In the quarter ending June 2011, Apple spent less than $1 billion on property, plants, and equipment.
By March 2012, the number had spiked beyond $2 billion, beyond $3 billion, and approached $4 billion.
Here’s a chart he made to show what the spike looks like so far:
Here’s the the interesting part about all this massive spending.
No one outside of Apple knows where it’s going.
“The capital is being deployed almost silently and, though vast in scale, barely gets a mention from analysts,” writes Dediu. “Not even a single question has been raised at any earnings call about this spending.”
His theory is that Apple, which prefers an “integrated” approach in everything it does, will soon make more of the components inside its gadgets, like chips.
That would explain why Apple has been so busy hiring former Texas Instruments employees, for example.
The truth is, Apple is a very secret company and it doesn’t have to say, specifically, where it’s spending that money.
For all we know, it could be building TV set factories.
One thing one know for sure is the Apple is always working on products that would cannibalize its current lineup.
Maybe Apple is investing billions in a product that could kill the iPhone, like computerized glasses.
As the world’s largest online retailer, it’s no surprise that its biggest fulfillment center in Phoenix, Arizona is the size of 28 football fields.
That’s because it’s their goal to have everything anyone wants at anytime.
Amazon has 80 fulfillment centers in the world to handle all of its orders.
Even though Amazon already has massive operations, it’s still planning to open at least two new fulfillment centers in California over the next year or so.
And with the holiday shopping season in full force, Amazon hired an additional 50,000 employees to help with the expected demand.
Thanks to Imgur user SippingTea’s incredible photos, we have a sense of that this incredible scale actually looks like.
Stacks of shelves line the warehouse
Employees need carts to navigate through the massive amounts of inventory
Hundreds of boxes full of products cover the floor
The daily deal world is in turmoil.
LivingSocial just announced the firing of 400 employees, which is about 8.9% of its total workforce.
What’s more unnerving is that over the past six months, Groupon reduced its workforce by 648 positions.
More than 1,000 reductions across both businesses is a huge deal. Those reductions aren’t all layoffs; some are through attrition.
To cap it all, Groupon CEO Andrew Mason’s job was in question all week, and he only received his board of directors’ seal of approval late Thursday.
So why isn’t anyone freaking out yet?
Arguably, this is a recession in the daily deal business.
It’s the industry’s first, given that it didn’t exist until about four years ago.
LivingSocial told Business Insider via email about the job cuts. “After two years of hyper-growth from 450 to more than 4500 employees, these moves will align our cost structure against our 2013 plans and will help us set the company on a path for long-term growth and profitability. Specifically, they will allow us to invest more in critical pr! iorities like marketing, mobile, and the hiring of additional technology staff.”
LivingSocial told CNNMoney that it is moving much of its customer service from its headquarters in D.C. to Tuscon, “so some job openings will be available in that area.” Sales and editorial, however, have simply been “streamlined.”
The job losses reflect the shaky economic underpinnings of the daily deal business, which Groupon and LivingSocial have yet to wrestle into control.
LivingSocial posted a net loss of $566 million in Q3 2012. $496 million of LivingSocial’s loss stems from a huge writedown of some of its acquisitions from 2011, the Washington Business Journal reports. LivingSocial’s revenue also fell to $124 million in the three-month period, down from $138 million in the second quarter.
As of market close today, Groupon’s stock price is currently sitting at $4.54, according to Yahoo Finance. The 52-week range is shocking: it reached a high of $25.84. That followed six months’ of shrinking total billings at the company. (Its American business is robust; the international arm less so.)
A Groupon spokesperson tells us that its layoffs were largely due to new technology the company invested in that made those jobs irrelevant. In fact, we’re told, Groupon has 200 job vacancies open across North America right now.
And, of course, the job cuts don’t mean that Groupon and LivingSocial are going to vanish tomorrow. They’re huge businesses after all. But they are cause for concern as they illuminate potential weaknesses in the daily deal ! business model.
The main problem is operational scale.
Both companies are dependent on large salesforces. It is very difficult for them to leverage operation scale: To sell more, they need to employ more people. Groupon historically has prided itself on the long-term relationships its salesforce builds with its merchants. They have struggled to leverage self-serve, turnkey sales the way Facebook has.
In fact, Groupon and LivingSocial aren’t even tech companies. Rather, they’re email companies. Although email is here to stay for a long time, the tidal shift among consumers is away from email to instant messaging, social media messaging, and mobile phone messaging. They need to pivot into alternate methods.
Groupon is trying just that, with Groupon Goods, which so far has been a success. And both companies need to do what Groupon says it is trying to do, which is replace human-to-human selling with tech that can increase each individual worker’s selling power.
Lastly, the downturn ask whether the daily deal business has hit one of its natural ceilings: new merchants. Both companies need a fresh supply of new merchants to offer more deals, or to re-up on repeated deals. It’s an open question that both Groupon and LivingSocial now have to prove: Is there enough new merchants or incremental repeat business from merchants for the sector to continue to grow?
A thousand-plus layoffs suggest that, for now, the question lacks a satisfying answer.
Don’t Miss: Groupon CEO Andrew Mason Keeps His Job!
It inherited the system from Zagat, the local guide business it bought last year to bolster its search results.
Search Engine Land’s Matt McGee argues that adopting the Zagat system was a mistake, since Google’s own reviews and sites like Yelp have trained most Internet users to expect a system built around points or stars—usually on a scale of one to five.
Now Google is asking consumers to rate businesses as “Poor-Fair,” “Good,” “Very Good,” or “Excellent.” It’s still converting those ratings into a Zagat-style score, but it’s displaying the descriptive terms rather than the score on individual reviews.
The Zagat system is distinctive, but it’s really only useful to people who were familiar with it from Zagat’s printed guides.
Take it away, and one wonders why Google did the Zagat deal in the first place.
Here’s the new review interface, via Search Engine Land:
Intel has been talking up wireless charging for years, to the point where we thought its implementation would forever remain a concept for the lab. Not so: Intel is having Integrated Device Technology (IDT) build a real-world chipset to support resonance charging in our gadgets. The lofty goal is to have a ready-made platform for charging up a mobile device or peripheral just by keeping it close to another device with a charger built-in, such as an Ultrabook; there’s none of the unseemly contact plates used with inductive wireless power. Intel’s commitment is still very much early and won’t put a full, two-way resonance chipset into the hands of hardware makers until sometime during the first half of 2013, let alone into a shipping product. We’ll take it all the same, as it just might be the first step toward embracing wireless power on a truly large scale.
Intel, IDT to make resonance charging a reality, see reference chipset coming in first half of 2013 originally appeared on Engadget on Wed, 29 Aug 2012 17:41:00 EDT. Please see our terms for use of feeds.
Brewster, the new contacts management app for iPhone, had a few privacy leaks on launch day yesterday.
We pressed Brewster for more details, but they would only give us this statement:
“We take privacy extremely seriously at Brewster. When we launched yesterday, we had a tremendous number of user signups, and fixed a number of problems, including scale issues and bugs.
One unfortunate problem that arose was for Foursquare users who were fans, but not friends, of other Foursquare users. Even further, Foursquare only offers the ability to be fanned to an extremely small number of users. In this case, if we had the contact information from a full Foursquare friend, we briefly displayed their contact information to fans. This happened with one user who was fans of multiple people on Foursquare.
As soon as we heard of this issue from the user, we made sure this bug was resolved immediately, and put safeguards in place to ensure it never happens again. This is the only instance we heard of this issue.
Separately, from this bug, we have also responded to questions from users related to information that they had access to from different services. For instance, a user might have a public photo available that they haven’t seen before, or a phone number rightfully accessible if connected on Foursquare. These instances are completely consistent with the access the user gives these third-party services.
Brewster strives to be a trusted personalized address book for our users. We hope this serves as an example of how seriously we take issues of privacy, how candid we will be if issues ever arise, and that our users remain a top priority.
InMobi CEO Naveen Tewari tells us that he expects his mobile ad company — which he believes operates the largest mobile ad network bar Google’s — to remain a large standalone play in the future, even though it is not yet profitable.
InMobi has about 850 employees in about 30 countries worldwide, of which 125 – 150 are in the U.S. Tewari declined to discuss revenues as the company is still private, having taken a $200 million investment from SoftBank last year.
“We think this could be a standalone company,” Tewari said when asked if he believed InMobi would be acquired. Growth has been “so fast and so large, we’re one of only a handful of players that exists in this space” at scale, he said. InMobi serves 93.4 billion impressions monthly, across the planet.
But the company is not yet running a profit, Tewari said. “We are in investment mode so we’re concentrating on that. We have internal targets but we’d rather keep it that way.”
Profits have proven elusive among the large-scale mobile ad network providers. Both Velti and Millennial Media are also currently running at a loss.
If you’ve ever wondered why people write malware, it’s just like anything else – it’s all about the money. Symantec has worked out that the evil-doing bottom-feeders behind that nasty Flashback Trojan, which caught the Mac world with its pants down, were raking in around $10,000 a day.
Apparently Flashback was cheating Google out of ad money on a colossal scale, redirecting clicks and banking the cash. With 100,000s of users unknowingly infected, all those tiny 5p clicks quickly added up, and that was just one variant of the Trojan.
With that much money on the line it’s no wonder Macs have become a target – Windows users are supposedly wiser to these kinds of things. In theory it’s a lot easier, once you’ve actually managed to get onto a Mac, to hide-out there earning serious money. Now that they’ve successfully proved Macs are vulnerable, and made a hatful of money in the process, don’t expect the Mac to escape Windows-style virus hell – where there’s a will, there’s a way. [Symantec via MacWorld UK]
Image by Images of Money under Creative Commons license
Our newest offspring Gizmodo UK is gobbling up the news in a different timezone, so check them out if you need another Giz fix.
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
Collaborators – Digital Profs
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