BusinessWeek: Inside Apple's Plans for Its Futuristic, $5 Billion Headquarters

By Peter Burrows

At what turned out to be his last public appearance, Steve Jobs stood before the Cupertino City Council on June 7, 2011, to present plans for a new corporate campus for Apple (AAPL). Scarecrow thin but forceful as ever, Jobs displayed several renderings of a headquarters intended to accommodate more than 12,000 employees in a single, circular building. “It’s a little like a spaceship,” he said of the massive, four-story ring, which, at 2.8 million square feet, would be two-thirds the size of the Pentagon and set among 176 acres of trees where today there are mostly asphalt parking lots. “We have a shot,” he said, “at building the best office building in the world. I really do think that architecture students will come here to see it.”

Jobs presenting plans for Apple’s new campus

Jobs died four months later, before the final plans could be submitted to Cupertino city planners, but he had made it clear that this corporate Shangri-La would be expensive. Apple would add 6,000 trees and hide nearly all the roads and parking spaces underground. There would be plenty of cafeterias, including one that could handle lunch for 3,000 employees. Jobs highlighted the main building’s curved exterior walls. The plans call for unprecedented 40-foot, floor-to-ceiling panes of concave glass from Germany. Before the Cupertino council, Jobs noted, “there isn’t a straight piece of glass on the whole building … and as you know if you build things, this isn’t the cheapest way to build them.”

He had that right. Since 2011, the budget for Apple’s Campus 2 has ballooned from less than $3 billion to nearly $5 billion, according to five people close to the project who were not authorized to speak on the record. If their consensus estimate is accurate, Apple’s expansion would eclipse the $3.9 billion being spent on the new World Trade Center complex in New York, and the new office space would run more than $1,500 per square foot—three times the cost of many top-of-the-line downtown corporate towers.

 

Before his death, Jobs had hoped to break ground in 2012 and to move in by the end of 2015. Apple will start tearing down the 26 buildings on the site in June, according to another person familiar with the plan. At the company’s annual meeting on Feb. 27, Chief Executive Officer Tim Cook said the move-in date has been pushed back to 2016. Apple declined to comment for this article.

 

One reason for the new timetable, say three people who have spoken to Apple personnel about the project, is that the company has been working with lead architect Foster + Partners to cut $1 billion from the budget before proceeding. Jobs and Apple first hired Norman Foster’s firm, renowned for the rebuilt Reichstag in Berlin and Hearst Tower in New York, in 2010. Apple has named a general contractor—a joint venture of DPR Construction, in Redwood City, Calif., and prefabrication specialists Skanska USA Building in New York—but has not finalized agreements with the scores of subcontractors needed to complete the job. Some contractors will be submitting bids by May. There’s so much dirt to be removed, excavating the site will take six months and require a continuous, 24-hour convoy of trucks, says a former Apple manager who heard a presentation from Foster’s firm.

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. Meanwhile, $1 billion is still less than 1 percent of Apple’s $137 billion in cash reserves. Yet the multibillion-dollar budget for Campus 2 could add fuel to the debate about what Apple’s doing with all its money. Investors didn’t squawk much when Apple was dominating the smartphone and tablet market, but shares have fallen 38 percent since September amid rising competition from Samsung Electronics and concerns about Apple’s product pipeline. Now shareholders are calling for a big dividend, stock buyback, or, in the case of Greenlight Capital’s David Einhorn, the issuance of a new class of preferred shares.

 

Apple has hinted it might oblige in some way, but critics are sure to question whether curved glass is the best use of funds. “It would take some convincing for me to understand why $5 billion is the right number for a project like this,” says Keith Goddard, the chief executive of Tulsa-based Capital Advisors, which owns 30,537 shares of Apple. “This is rubbing salt in the wound, to spend at a level that most anyone would say is extravagant, at a time when they’re being so stingy on dividends.” If the stock continues to underperform, Goddard predicts, “this headquarters would perpetuate the negative story.”

 

To read it in full: http://www.businessweek.com/articles/2013-04-04/apples-campus-2-shapes-up-as-an-investor-relations-nightmare  

 

Burrows is a senior writer for Bloomberg Businessweek, based in San Francisco.

 

Technology Insider: from Bloomberg BusinessWeek

Skype's Been Hijacked in China, and Microsoft Is O.K. With It
Cybersecurity By Vernon Silver on March 08, 2013

A pair of China residents using Skype to communicate

Jeffrey Knockel is an unlikely candidate to expose the inner workings of Skype’s role in China’s online surveillance apparatus. The 27-year-old computer-science graduate student at the University of New Mexico, Albuquerque doesn’t speak Chinese, let alone follow Chinese politics. “I don’t really keep up with news in China that much,” he says. But he loves solving puzzles. So when a professor pulled Knockel aside after class two years ago and suggested a long-shot project—to figure out how the Chinese version of Microsoft’s (MSFT) Skype secretly monitors users—he hunkered down in his bedroom with his Dell (DELL) laptop and did it.

 

Since then, Knockel, a bearded, yoga-practicing son of a retired U.S. Air Force officer, has repeatedly beaten the ever-changing encryption that cloaks Skype’s Chinese service. This has allowed him to compile for the first time the thousands of terms—such as “Amnesty International” and “Tiananmen”—that prompt Skype in China to intercept typed messages and send copies to its computer servers in the country. Some messages are blocked altogether. The lists—which are the subject of a presentation Knockel will make on Friday, March 8, at Boston University, as well as a paper he’s writing with researchers from the University of Toronto’s Citizen Lab—shed light on the monitoring of Internet communications in China. Skype’s videophone-and-texting service there, with nearly 96 million users, is known as TOM-Skype, a joint venture formed in 2005 with majority owner Tom Online, a Chinese wireless Internet company.

 

The words that are subject to being monitored, which Knockel updates almost daily on his department’s website, range from references to pornography and drugs to politically sensitive terms, including “Human Rights Watch,” “Reporters Without Borders,” “BBC News,” and the locations of planned protests. (The system he traced does not involve voice calls.) Knockel says his findings expose a conflict between Microsoft’s advocacy of privacy rights and its role in surveillance. Microsoft, which bought Skype in 2011, is a founding member of the Global Network Initiative, a group that promotes corporate responsibility in online freedom of expression. “I would hope for more,” Knockel says of Microsoft. “I would like to get a statement out of them on their social policy regarding whether they approve of what TOM-Skype is doing on surveillance.”

On Jan. 24, an international group of activists and rights groups published an open letter to Skype, calling on it to disclose its security and privacy practices. Microsoft, when asked for comment on Knockel’s findings and activists’ concerns, issued a statement it attributed to an unnamed spokesperson for its Skype unit. “Skype’s mission is to break down barriers to communications and enable conversations worldwide,” the statement said. “Skype is committed to continued improvement of end user transparency wherever our software is used.” Microsoft’s statement also said that “in China, the Skype software is made available through a joint venture with TOM Online. As majority partner in the joint venture, TOM has established procedures to meet its obligations under local laws.” Hong Kong-based Tom Group (2383), the parent of Tom Online, didn’t respond to e-mailed requests for comment for this story.

 

In an October 2008 statement addressing TOM-Skype censorship, it said: “As a Chinese company, we adhere to rules and regulations in China where we operate our businesses.” China’s Ministry of Foreign Affairs didn’t immediately respond to faxed questions seeking comment.

 

When Internet users in China try to access Skype.com, they’re diverted to the TOM-Skype site. While the Chinese version bears the blue Skype logo—and provides services for online phone calls and text chats—it’s a modified version of the program found elsewhere in the world. The surveillance feature in TOM-Skype conducts the monitoring directly on a user’s computer, scanning messages for specific words and phrases, Knockel says. When the program finds a match, it sends a copy of the offending missive to a TOM-Skype computer server, along with the account’s username, time and date of transmission, and whether the message was sent or received by the user, his research shows. Whether that information is then shared with the Chinese government wasn’t explored by Knockel—and couldn’t be learned from TOM-Skype.

 

Knockel’s project began in April 2011, when one of his advisers at the University of New Mexico, computer science professor Jedidiah Crandall, referred him to a 2008 paper by Nart Villeneuve, a Canadian security researcher. Villeneuve had identified Chinese servers that stored TOM-Skype’s flagged messages, yet he couldn’t tell for certain which terms had triggered the surveillance. “He didn’t know what the keyword list was,” says Masashi Crete-Nishihata, research manager at Citizen Lab in Toronto and an author of the upcoming paper on Knockel’s findings. “What was interesting about what Jeff did was grab the keyword list.” To get the words, Knockel downloaded TOM-Skype onto his computer and watched how the monitoring worked. Every time he went online, servers in China would silently send his machine an updated blacklist that would serve as the surveillance filter on his laptop.

 

Yet there was a hitch: The lists were in code. Each term appeared as a random-looking series of numbers and letters. To crack the code, Knockel focused on one word Villeneuve had identified as being routinely blocked: the common obscenity known as the f-word. Knockel’s plan was to create a single-word Rosetta stone by figuring out which string of code corresponded to “f—.” If he succeeded, he could eventually decipher other codes and identify the associated words that set off the surveillance.

 

First, he needed to take control of the list on his own computer, instead of letting the Chinese servers send the list to him.

 

Once he accomplished this, Knockel analyzed the coding with a technique known as a binary search. He chopped the list in half, and then sent the f-word in a TOM-Skype instant message. If it got blocked, he knew the banned term was in a slice of the list under examination. He’d then chop it again. “We would delete half the list. A half. A half,” he says. “By repeatedly halving the list like this, we were able to eventually find the exact line that contained the word.” From there, he played with it. Why not change the “f” and see what “duck” looked like? The whole process took about a week, he says. On later versions of the software, he also poked around and found encryption keys, or passwords that the program itself uses to understand the garble. “I reverse-engineered the software,” he says. “From there it just exploded.”

 

Crandall, his adviser, gave him an A+ for the class. “These things were major feats,” he says of Knockel’s work. “He comes across as shy at first, but once you get to know him, he’s very much an iconoclast who likes to get into trouble and speak truth to power.”

 

The terms Knockel discovered yield a rare view of the faceless actors behind Chinese surveillance. “Some keywords are highly targeted—specific locations, going down to exact address details of where a protest is going to happen,” Citizen Lab’s Crete-Nishihata says.

 

These included lines from demonstration organizers’ instructions during 2011′s Jasmine Revolution pro-democracy gatherings, such as “McDonald’s in front of Chunxi Road in Chengdu,” Knockel found. The data posted on Knockel’s university department website show that the lists have changed over time to keep up with events. In all, more than 2,000 terms have come and gone from the lists since April 2011, says Crete-Nishihata, who helped analyze the data.

 

Recent additions include phrases with the word “Ferrari,” a reference to the March 2012 car-crash death of a Communist Party leader’s son, and “723,” a reference to the July 23, 2011, date of a train crash that killed 40 people. Knockel says one of the most surprising findings is that the latest enhancement to TOM-Skype sends information about both sender and recipient to the Chinese computer servers. That means that even users of the standard Skype program outside China are subject to monitoring if they communicate with users of the Chinese version, he says. “If you are talking to someone using TOM-Skype, you yourself are being surveilled,” he says.

 

This week in Technology Insider: from Boomblerg BusinessWeek

Features

As Evernote's Cult Grows, the Business Market Beckons

By Rob Walker on February 28, 2013

 

(Corrects in fifth paragraph the rate at which Evernote is adding users)

Photograph by Damien Maloney for Bloomberg BusinessweekZerkel, a productivity consultant, recommends Evernote to nearly all of his clients

It happens gradually, devoted fans insist. Once you get it, they say, you live and die by Evernote, the five-year-old, everything-in-one-place personal organization application that is hyped by its creators as your “external brain.”

 

Joshua Zerkel has seen it happen again and again—and he’s lived it to some degree, too. The 37-year-old San Franciscan came across Evernote a few years ago and was attracted to its ability to work across platforms more cleanly than the note-taking software he’d been using. Today he’s one of several dozen “Evernote Ambassadors”—power users who volunteer to spread the word about its wonders. Zerkel is a productivity consultant for businesses and individuals, and he recommends Evernote to almost all his clients; leads Evernote training sessions; and just published his second e-book about best Evernote practices, Evernote @ Work. The company pays him nothing, yet even he finds some users a little over the top. “There are definitely Evernote junkies,” he says.

 

VIDEO:

Evernote CEO Says User Data Privacy Most Important

Ted Barnett is one of them. A serial entrepreneur who now works as chief operating officer of digital publisher Byliner, Barnett answered questions about his Evernote usage before they could be asked, with a crisp outline he’d created in Evernote. He heard of the app from a friend in 2009 and was attracted to the idea that he could enter and access his data, stored in the cloud, from any smartphone, tablet, or computer. His first entry recorded vital health statistics he entered via his phone during a doctor visit.

 

“I have a terrible memory,” Barnett says, explaining that he used to rely largely on physical notebooks to keep track of ideas, until he started adding those to Evernote. Then he added a cheat sheet of parents’ names at his daughter’s school. Now, at the end of a work meeting, he’ll photograph the whiteboard, store that picture in Evernote, add some thoughts and questions, and send it around to his team. On his recent vacation in Istanbul, he used Evernote to create a one-man Fodor’s guide to the city for friends. Basically, the more Barnett used Evernote, the more he thought of new ways to use it.

 

Evernote says it has 50 million users around the world (a third in the U.S.) and is adding 100,000 a day. Operating on a “freemium” model, the company makes money primarily from the sliver of that user base that pays $45 a year, or $5 a month, for a souped-up version with more storage capacity. It has been profitable, and though it’s investing heavily now, it expects to be profitable again soon. But with $251 million in venture backing and a valuation estimated at $1 billion, Evernote has greater ambitions. Chief Executive Officer Phil Libin talks about reaching a billion users; others at the company freely throw around the phrase “the Evernote lifestyle.”

 

VIDEO:

Evernote's Libin on Business Strategy

That’s a lot of expectations for an experience that boils down to three columns in a browser window. You type, or clip or upload a new “note” (an image, a recording, or a Web page) into the right-hand column; store it in a “notebook” listed on the left-hand side; and browse or search in the middle. The promise is that Evernote saves your ideas, documents your meetings, archives articles, reminds you what your kid wants for Christmas, and coughs up the business card of Plaid Jacket Guy from that conference in Scottsdale. In addition to segregating such material into notebooks, users can organize it with tags, but don’t have to.

 

Evernote’s search function, with optical character recognition that even picks up words within pictures, is impressively accurate and speedy. The effectiveness of this function is crucial, because the willingness to dump work and personal material in one place is central to Evernote’s worldview.

 

“I always hated the term life/work balance,” Libin, 41, declares during an interview at Evernote’s offices in Redwood City, Calif. “I never had a distinction between work and personal life. I had a BlackBerry (BBRY) from Day One, and people would say, ‘This is terrible, now you check your e-mail at 11 o’clock at night.’ Yeah, but that’s great! I love that I can check my e-mail at 11 o’clock at night.”

 

VIDEO:

Evernote Raises $85M in Recent Round of Funding

 

To read the whole article, go to:

 

http://www.businessweek.com/

 

Technology Insider: from Bloomberg BusinessWeek

The Firefox OS mobile operating system launches in Barcelona
Mobile & Telecom

The 3 Most-Important Things at Mobile World Congress

By Bernhard Warner on February 26, 2013

Gadget fans walked away this week from Mobile World Congress in Barcelona, the annual geek fest for connected devices, grumbling about a glaring lack of breakthrough products. There were no successors to last year’s wide-screen, HD wonder Samsung (005930) Galaxy Note 10.1, nor did anybody dare push beyond the 41-megapixel barrier broken a year ago by Nokia’s PureView 808 camera phone. And with Apple (AAPL) a no-show (as usual) and Google (GOOG) suspiciously scarce at this year’s event, tablet news was decidedly understated.

 

Instead the automotive industry, energy sector, and city planning experts attracted some of the biggest crowds on the trade show floors, showing off how mobile technologies could transform creaking energy grids, save inefficient healthcare systems billions, and improve disaster response capabilities in big cities. Dull perhaps, but important.

 

Here are the three most important things that emerged from Mobile World Congress:

 

1) Infrastructure tech. Deutsche Telekom (DTE) introduced a new machine-to-machine (or M2M) telematics marketplace. It is asking developers to build out managed software solutions that it can then sell to, say, port operators and power companies. Among the new apps in its marketplace are remote pipeline-monitoring and cargo-tracking software bundles, said Jurgen Hase, vice president of Deutsche Telekom’s M2M Competence Center.

 

2) Automaker apps. French carmaker Renault (RNO) demonstrated the R-Link app store where its customers can buy apps for the road (think maps, weather updates, and streaming music) for its new in-dash tablet display for select car models to launch later this year. Renault is trying to catch up to higher-end rivals BMW (BMW), Audi (NSU), and Toyota (TM), which have introduced their own proprietary app marketplaces.

 

3) Handset austerity. The biggest buzz came courtesy of Mozilla, which introduced yet another mobile operating system in an already crowded market. Firefox OS mobiles will run on HTML5, the Web-based language that has yet to catch fire in the development community. The selling point is that Firefox OS phones will be targeted squarely at consumers that cannot afford iPhones or high-end Android phones. The handsets, to be made by China’s ZTE (763) and Huawei, as well as LG (066570) and Alcatel Airtouch (ALU), will launch later this summer in Eastern Europe, South America, and just one EU country, Spain, whose official youth unemployment rate is 55 percent.

 

Nokia (NOK) also caught the thrift bug—news that won’t cheer shareholders. Among the four handsets Nokia Chief Executive Officer Stephen Elop unveiled in Barcelona are the “105,” carrying a suggested retail price of €15 ($19.60), and the “301,” at $85. Even its smartphone line, Lumia, is priced to move. Two new intros, the Lumia 520 and the Lumia 720, will carry suggested retail prices of about $180 and $325, respectively.

 

Warner writes about innovation for Bloomberg Businessweek. Follow him on Twitter @bernhardwarner.

 

http://www.businessweek.com/articles/2013-02-26/the-3-most-important-things-at-mobile-world-congress 

 

 

Bloomberg BusinessWeek: Tecnología Esta Semana

Personal Technology

Mind Turns Into Matter With 3D Printing Pen

 By Ashlee Vance on February 20, 2013

For years, the star of the arts and crafts scene has been the hot-glue gun. What child hasn’t cheered after plugging the gun in and watching plastic ooze out the nozzle? By-the-book types could neatly fuse appropriate things together, while the more abstract individuals among us could create wonderful mounds of goop.

 

It would appear, though, that the venerable hot-glue gun has been bested by a new, more audacious smoking-hot tool. Meet the 3Doodler, a pen that lets people draw three-dimensional objects. (Let that sink in for a moment.) It is, in essence, a novel play on 3D printing technology.

Current consumer 3D printers have a movable nozzle that hangs over a platform. The machines receive an image file from a computer and set to work building physical replicas of the images. A spool of plastic is fed into the 3D printer and melted by the nozzle, which then builds up the object one thin layer at a time.

 

The 3Doodler does away with the whole precision printing idea. It’s a bulky pen that takes a thread of plastic in one end, melts it, and squirts a stream of plastic out the other end. Instead of drawing on paper, people more or less draw in thin air and have the objects in their head appear in real life. It’s magical stuff.

 

For the moment, the 3Doodler is a Kickstarter project, with the first production units promised to arrive around September. The company behind the product is WobbleWorks, and it has already raised $700,000. On the Kickstarter page, you can see creations that range from Eiffel Tower replicas to animals and jewelry.

 

Children everywhere should rejoice at this addition to the arts and crafts arsenal.

 

Vance is a technology writer for Bloomberg Businessweek in Palo Alto, Calif. Follow him on Twitter @valleyhack.

Prince Alwaleed Bets Another Chip on Chinese E-Commerce

(From http://www.businessweek.com/ )

China E-Commerce Prince Alwaleed Bets Another Chip on Chinese E-Commerce

Prince Alwaleed, Saudi Arabia’s most high-profile investor, shouldn’t need to make a new investment to capitalize on China’s rapidly growing Internet population. After all, the prince already is a major shareholder in Twitter, having put $300 million into the company in 2011. But China’s censors block Twitter (along with Facebook (FB), YouTube, and others), so the Saudi billionaire needs another vehicle if he wants to take part.
Hence the news from over the weekend that Kingdom Holding, the company controlled by His Royal Highness Prince Alwaleed bin Talal bin Abdulaziz Alsaud, is one of several investors putting about $400 million into 360buy Jingdong, an Amazon-like online shopping mall based in Beijing that is one of China’s leading e-commerce players. Kingdom is investing $125 million, according to the Feb. 16 statement on its website. Combined with a recent investment by the Ontario Teachers Pension Plan and other investors, the Kingdom-led deal gives 360buy an extra $700 million.

No doubt the Saudi billionaire and other 360buy investors are attracted by the big potential of Chinese e-commerce, which is still in its fast-growth phase. The official Xinhua news agency reported Monday that 247 million Chinese shopped online in 2012, a year-on-year increase of 21.7 percent, and the value of online retail transactions increased 64.7 percent last year, with China’s E-Commerce Research Center putting the total at 1.32 trillion yuan ($211.5 billion). That total should continue growing, Xinhua added, hitting 1.81 trillion yuan this year. (By comparison, U.S. online retail sales grew 15.8 percent last year, to $225.5 billion, according to the U.S. Commerce Department.)

 

Still, investors looking to profit from this growth have not had much luck. Last year was grim for many Chinese e-commerce plays, as 360buy and its rivals engaged in a brutal price war that included 360buy Chairman Liu Qiangdong announcing via his microblog his willingness to suffer three years without profits on electric appliances it sold online. The price war took its toll on the stock prices of 360buy competitors Suning Appliance (002024) (its Shenzhen-listed shares fell 20 percent over the past 12 months) and Gome Electrical Appliances (493) (its Hong Kong-listed shares were down 56 percent). The ADRs of Beijing’s E-Commerce China Dangdang (DANG), a 360buy competitor that got its start as a bookseller and now also sells clothing, cosmetics, and other products, fell 41 percent .

It’s not just the retailers. Other Chinese online companies have suffered, too. Social networking company Renren (RENN) (which benefits from Facebook’s absence) was also down 41 percent over the past 12 months. Chinese search leader Baidu (BIDU) didn’t fare much better, with its shares declining 31 percent.
This isn’t the first time 360buy has made headlines with a supersize investment round. In 2011, the company raised $1.5 billion from investors, prompting speculation about a speedy move to an initial public offering. The IPO never happened, though, as allegations of accounting irregularities at some listed Chinese companies soured investors on new IPOs from China.

The additional money from the latest fundraising should help 360buy manage its cash flow till sentiment about Chinese stocks improves. And the prince’s involvement gives us something of a timetable: Kingdom’s executive director for private equity and international investments, Ahmed Halawani, said in the statement announcing the deal that the investment is in line with Kingdom’s strategy of targeting “high-growth companies potentially seeking to be listed in one of the international capital markets within three years.”

 

By Bruce Einhorn on February 18, 2013

Einhorn is Asia regional editor in Bloomberg Businessweek's Hong Kong bureau.

CAMACOL Holiday Distribution Drive/ Las Jabas de Navidad de CAMACOL

The Governor and First Lady were right there helping distribute the food...
El Gobernador y la Primera Dama estuvieron aquí ayudando a entregar los alimentos

The CAMACOL Holiday Food Distribution Drive was a success...thanks to our corporate family of members and core of awesome volunteers!

La Entrega de las Jabas de Navidad de CAMACOL fue un éxito...gracias a nuestra familia de miembros corporativa y a un núcleo tremendo de voluntarios !

 

 

"The greatestest gift of the holiday season is the joy that comes from helping others."   "El mayot regalo de la época de las Fiestas es el júbilo que viene de ayudar a otros"