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Even though Apple announced a major U.S. campus in January, pundits have barely speculated as to its location — partially because Apple’s process is opaque, unlike Amazon’s highly publicized “pitch your city for HQ2” campaign. This morning, Bloomberg handicapped Apple’s likely top prospects, relying largely on economic metrics to identify 17 potential campus locations spread across the United States. My view is that Apple’s list of possible locations is much smaller, and geographically focused on the East Coast.
While Bloomberg’s analysis includes the locations of Apple’s existing facilities, it doesn’t assign weights to them, and I’d argue that this factor is important in understanding the company’s plans. Apple’s current campuses are in states where it maintains AppleCare repair facilities, and only four states have those facilities: California, Texas, Tennessee, and Pennsylvania. Since Apple has said it won’t build the new campus in California or Texas, that leaves Tennessee and Pennsylvania as two major contenders.
Bloomberg also notes the locations of “smaller corporate offices” Apple operates around the U.S., plus “major parts suppliers” for its products, but my view is that these are just adding noise to the map. Many of Apple’s small offices were set up for limited reasons, such as integrating acquired companies, and don’t signal any broader expansion plans. Similarly, the fact that Apple sources a particularly critical component like screen glass from a Corning, New York-based company — or buys a bunch of parts from New York — doesn’t actually increase the likelihood that it will set up a new campus in the same city or state.
I have focused on Apple’s initial announcement of the new campus, which stated that the facility will begin by housing technical support for customers — that’s AppleCare. Previously, Apple has paired large AppleCare tech support locations with physical repair facilities, but it also offers work-from-home tech support positions across the country. Over the past few months, I’ve noticed that quite a few of those positions were in the Southeast. Since Apple already has tech support facilities in the Pacific and Central time zones, an Eastern location makes sense, thus reducing the likelihood that states such as Washington, Oregon, Colorado, Wisconsin, and Illinois will be selected.
That leaves several strong contenders: New York, Massachusetts, the D.C./Maryland area, Georgia, Florida, and North Carolina. Bloomberg paid attention to Moody’s assessments of local tax incentives and business environments, which I believe is wise, particularly since those factors also align with Apple’s existing major campuses. Focusing on this aspect alone would tend to downplay New York, Massachusetts, and the D.C./Maryland area in favor of North Carolina, Tennessee, and Florida. However, Moody’s assessments of available human resources and transportation factors place greater weight on Northeastern states.
I wouldn’t call this a wash for all of those states, but there are other factors — such as high taxes in New York and traffic congestion in the D.C./Maryland area — that make some of them less appealing than others. Apple will be looking for a young, smart, technology-positive workforce unburdened by ultra-high local rents and wage expectations. Massachusetts? Georgia? Florida? Maybe. North Carolina? Yes.
One thing Bloomberg doesn’t take into account is an abstract factor: sentiment. As much as some would expect decisions like this to be based wholly on data — and Apple isn’t generally viewed as a backwards-looking company — campus selection isn’t just about the raw numbers. The specific location, “park” theme, and collaboration-focused design of the new Apple Park campus were all based on former Apple CEO Steve Jobs’ personal recollections of his life in Cupertino. There might have been a city with better tax incentives or a larger airport, but those factors didn’t seem to matter when Jobs pitched Cupertino on the campus. Emotion mattered.
If anything, Apple has become more sentimental under Tim Cook, and that’s why one state stands out to me as a particularly strong contender: North Carolina. Current CEO Tim Cook is a very proud alumnus of Duke University, and less than a decade ago Apple chose the city of Maiden to house an iCloud datacenter. North Carolina is also a midway point between Apple’s existing Pennsylvania and Tennessee repair centers, sits in the Eastern time zone, and has multiple cities on the tax incentives and business environment list.
On the other hand, North Carolina doesn’t have an AppleCare repair facility (yet), which is the only reason I’m not calling the state a lock — Pennsylvania and Tennessee both have strong positions, and Apple might be concerned about moving jobs between states. But picking the area near Duke (and announcing it during a commencement speech there on May 13) just feels like something Tim Cook would do.
Where do you think Apple will locate its campus? Reach out to me on Twitter at @horwitz and share your thoughts.
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