"We will be closing all of our retail stores outside of Greater China until March 27" - Does this mean all stores globally closed, except inside China, which are back open?
Nice! Everyone make sure you get your coronavirus response papers ready! Wouldnt want to be the only person on the planet not talking about how they're handling it!
In the last 24 hours I've received more than a dozen emails from random businesses that have my email address - many of which I have not interacted with in years - letting me know that my health and safety is their top priority. It's like someone in the marketing department realized "hey, here's an opportunity to send some spam without looking sleazy".
Perhaps their support teams are receiving a lot of questions, and they decided to cover them in an email. On the scale of sleazy things companies do, this is on the low end for me.
Thank you for your support here. I want you to know that I deeply care about everyone who responds to my post. You'll be glad to know that you can keep writing responses from home for the next week. After that the coast should be clear, so I expect you to come in.
Apple’s committed donations to the global COVID-19 response — both to help treat those who are sick and to help lessen the economic and community impacts of the pandemic — today reached $15 million worldwide.
Not that it's Apple's job to fix COVID-19, but this is the equivalent of an average US houshold income family crowing about donating $1.80 of their yearly $63k income. Using Apple's annual profit, not revenue. [Edit: correction $18]
> We’re also announcing that we are matching our employee donations two-to-one to support COVID-19 response efforts locally, nationally and internationally.
Plus everyone is still getting paid:
> All of our hourly workers will continue to receive pay in alignment with business as usual operations. We have expanded our leave policies to accommodate personal or family health circumstances created by COVID-19 — including recovering from an illness, caring for a sick loved one, mandatory quarantining, or childcare challenges due to school closures.
I don't know whether to be happy that a major American company has publically said such things, or carry on being disgusted that such a thing is not normal and is worth a PR announcement.
Seriously, Apple's leave policy didn't include "recovering from an illness"??
I work at Apple. I’ve not reviewed the new guidelines but can confirm that yes, Apple do indeed let you take sick time to recover from an illness. Of course they do.
In fact, the only time I ever had to interact with Apple HR about time off was when I wanted 3 months off after my kid was born. I ended up getting paid for all of it except the last week. Any other time I’ve taken sick leave I just need to let my manager know, and I took 2 weeks once when I was hit by a car.
Don’t get the wrong idea, I don’t take sick leave at the drop of a hat, but I’ve been here for 15 years, and life happens. I currently have the max-possible 240 hours of sick leave available. In my view, Apple are fairly generous for a US company regarding sick leave. US companies pale in comparison to EU companies, but that’s the US for you.
More money doesn't always make something happen faster or better. Governments are likely spending hundreds of millions to billions. Even if Apple had committed a billion dollars, would that result in better training, more personnel, more useful medication, medication where it needs to be, better tests, or more testing in the short term?
I suspect the answer is no, because I think those are likely all constrained on the supply side right now and money is not currently the problem.
It's sort of like a disaster happening in the area close to you. Maybe you go to try to donate your time to help others affected by the disaster. Maybe when you get there you see 50 other people standing around twiddling their thumbs because there's more people than they have useful tasks for at the moment. Do you stick around all day with nothing to do so you can say you helped, or do you leave after 30 minutes and promise you'll check back tomorrow to see if they have more use for you then?
> More money doesn't always make something happen faster or better.
Elon Musk tweeted "Coronavirus panic is dumb"[1]. When there were school kids stuck in a cave, he sent a team of engineers halfway round the world to try and build a submarine rescue effort. Instead of tweeting that, he could have tried to build cheap CPAP/respirators in bulk, on short notice and deliver them to hospitals.
I'm not saying he should have, but SpaceX dropped the price of rocketry a lot by trying and using off the shelf components; manufacturing is something which effort and money could plausibly move the needle on quickly, where research into speculative medication might not have any results, and that is something we can imagine him doing where we can't imagine a large company with big manufacturing experience pivoting to doing unexpectedly.
> Instead of tweeting that, he could have tried to build cheap CPAP/respirators in bulk, on short notice and deliver them to hospitals.
Could he have? How long would it take to retool and retrain whatever resources are needed to be able to do that and actually start producing something? What capacity would he be capable of putting out, given that his his facilities are probably configured for a much difference scale (cars and large semi-bespoke aeronautical components)? If it's a 5% increase in CPAP machines 6 months from now, how helpful is that?
What if doing so means that 20% of the workforce no longer has work to do? What if not producing their actual product and CPAP machines instead leads to enough loss in money/market they need to let some amount of their workforce go?
At some level I don't think asking Musk or Tesla/SapceX to do this is really any different than asking you to work half days for three months and donate the other half your time to helping with Coronavirus issues in some manner while living off savings to help supplement less pay. If during or at the end of that time you don't have a job anymore (either because you weren't there or general market recession), or some major problem came up that you were unprepared to address because you've been reducing your savings, was that a smart thing to do? Did it help more than it hurt? What if you have a family to support?
Musk's responsibility is to his stock holders and employees. He should do his best to make sure his company runs well and is profitable enough that he's not laying people off, or causing the stock price to drop any more than it might because the general market is in free fall, which also negatively affects many (including retirees and pension funds).
Could he have tried? Yes he could have tried. Again, not saying he had to, but he did set a precedent with the Thailand cave rescue that he's not only after shareholder and company interest directly. An iron lung is a metal tube and some rubber seals, it's a hair's breadth from what SpaceX makes already. They were built in the 1800s. How hard can it be to pump air in and out of a tube for a few weeks?
The difference is that Musk is a billionaire and could waste $1M a thousand times over, and barely move the needle on his net worth, and I couldn't. I reject your suggestion that Musk trying to build some air pumps and failing might leave him homeless and unable to provide for his family and leave Tesla/SpaceX in tatters.
> how long would it take to retool and retrain whatever resources are needed to be able to do that and actually start producing something?
Tesla crowed about building an "entire new general assembly line" in 3 weeks with "minimal resources" when they started building cars in a tent in 2018: https://www.theverge.com/2018/6/22/17488372/tesla-model-3-pr... Let's imagine that making ventilators is simpler than cars, so how about ... i dunno .. 2 weeks?
> At some level I don't think asking Musk or Tesla/SapceX to do this is really any different to ..
To .. the UK government asking carmakers (and other companies) to investigate whether they could produce ventilators? Because they have done that - Ford, JCB, Rolls Royce, are "looking into it". https://www.bbc.co.uk/news/business-51914490
A producer of ventilators says, in that article, "they can't they can't, woe, woe" which is what the space industry used to say about SpaceX, and the car industry about decent electric cars. ""The idea that an engineering company can quickly manufacturer medical devices, and comply with the rules, is unrealistic because of the heavy burden of standards and regulations that need to be complied with," said Penlon's Mr Thompson." - a) change the rules for an emergency situation, b) instead of making positive pressure ventilators which have to force clean air into a patient's face with all kinds of sterility problems, make negative pressure ones which the patient is inside and not otherwise touching or breathing air out of, lowering the risk of infection and other complications.
> If it's a 5% increase in CPAP machines 6 months from now, how helpful is that?
Good question. Who knows? The company in the above link makes 750 ventilators annually, so a 5% increase in those would be making 37 machines. Imagine if a billionaire made 37 machines and didn't save anyone. What folly. Everyone would laugh!(?) Have you seen any suggestions that COVID-19 will be done and dusted, worldwide, in 6 months? Can't think that I have.
I wonder which companies will benefit from this pandemic, long-term. If there’s a surge in remote working, for example, seems like that could be good for FAANG, bad for transport companies, commercial real estate, public events. Is there any analysis out there about this?
Maybe Disney, more likely. Hollywood has essentially frozen production and from what I'm hearing they're really not setup for working remote in pre/post (especially the latter). Combine with delayed releases, cancellation of film festivals (which are marketplaces as much as exhibitions for content) and the new releases this year appear to be on a giant delay.
Disney is interesting because they have the deepest bench, so to speak in terms of catalog. They also have the kids stuff, and all the kids are at home. They also had their stock dip below $100 with the crash this week, had to shutdown their parks, and quite recently reorganized the entire direct to consumer business. I'd put some money on Disney coming out on top there.
Netflix relies on new content to reduce churn. If production is halted I don't know how that looks for them. However if you take out their capex on production, they suddenly become stupidly profitable. So who knows.
Disney is also hemorrhaging cash with their parks closed. Along with resorts and cruises. And their TV advertising just vanished with losing all live sports. The next earnings season is going to be insane.
Even with it's deep catalog, Disney+ still has far less content than Netflix. I do agree that Netflix relies on new content to reduce churn, but my argument wasn't so much about existing users (churn), but about millions of new people who never had Netflix deciding to sign up because they have nothing else to do at home.
As for the rest of people, I agree that when you're competing with hundreds of other sources of entertainment and ways to spend your days, Netflix's catalog may not be amazing, but when most of the population is stuck at home, I'm sure there are plenty of stuff people will find and enjoy on Netflix.
Disney is definitely a runner up too. They've started moving releases closers. They just released Frozen 2 and the new Starwars movie digitally.
Good for Cloud services. In the short term, streaming services are probably more popular than ever. Gaming will probably do quite well with all the students off. Good for video chat apps, slack, Atlassian and other work management systems.
It seems to be quite bad for the AA in FAANG. Or at least one of them
I don't think any analysis is valid right now since we don't know what long term even means at this point.
I think the companies that will benefit will be entirely unpredictable, because we're about to fall into a steep descent in our gradient and the optimization of companies business models and products is about to get crazy. Just like '08 and '01.
That's on the condition that they can keep up with demand or even keep their existing infrastructure running.
If the electronics supply chain starts breaking down they can't just throw new hardware at an increasing workload.
On top of that there's the fact that existing hardware like hard drives has a best-before date based on the cumulated read/write operations they can handle.
I think there's going to be a big demand for engineers and developers that can squeeze out maximum performance out of existing pipes.
Data compression is going to be big too, as well as smarter hw drivers for hard drives.
Bragging about unrelated topics in the first paragraph, and touting a $15M donation while sitting on $200B in cash. So magnanimous. By the way, get back to work.
Seems like you missed the next part where he’s talking about matching two-to-one and also everyone getting paid even when closed. That’s more than enough they are doing. Also I dislike when people comment on why so and so is only donating X amount of money.
I would never criticize how or whether an individual donated. Apple is fair game. The entire announcement is self-congratulatory PR. Yeah, it's good that they're donating some money and matching some employee donations. They could have just done that. They turned it into a PR item, fluffed it up with other self-aggrandizing anecdotes, and announced what, to them, amounts to a token gesture. I don't go around town bragging when I drop $20 in the veterans' bucket at Walmart.
Even if they do it for the PR, what's the harm? It just encourages even more companies to try to out play Apple and more companies to follow suit. I really don't see any harm - I think it actually helps more companies from doing good gesture. This is also quite surprising coming from me because usually I am very cynical.
My intuition is that this is a supply chain / inventory management closure, not a virus risk closure. They have 509 stores in 25 countries (incl China). I don't believe that they would close over 90% of those stores simultaneously due simply to generalized viral transmission risk.
I find it guileful that they announced the closure in the middle of the night at the end of the week, a day after having announced the opening of their four remaining China stores to great fanfare from the equity market.
They are providing inventory to a bunch of other retailers and are continuing online sales, this really sounds like they don't want people coming in and touching the same piece of glass.
Inventory is a lot easier to manage when you don't have to send it to 500 different sites and predict demand. If you're coming up short on inventory, the reasonable choice is to put it into one central repository and ship from there. There are several different configurations for each type of device, varying based on color, memory, and carrier.
If they were only concerned about the virus, they would take the display models out of the showroom and continue to process pick-up orders. And they wouldn't shut down stores worldwide (ex-China).
No health body has recommended worldwide retail shutdowns, and no competing device vendor has closed all of its stores worldwide (ex-China). This is a ramification of the factory shutdowns we saw in China several weeks ago.
Good to read they're doing what they can. In the meantime, there's business like ours (in travel, 70-ish people, not profitable) that are fighting to survive this crisis. Would've liked to see an extension of the deadline for the apple sign-up requirement. I know we're late, but this means we need to spend valuable time redesigning our sign-up whereas what we currently need to do is redesign our entire business model to stay alive. Curious how others in the market feel about this
53 comments
[ 4.0 ms ] story [ 111 ms ] threadIn the last 24 hours I've received more than a dozen emails from random businesses that have my email address - many of which I have not interacted with in years - letting me know that my health and safety is their top priority. It's like someone in the marketing department realized "hey, here's an opportunity to send some spam without looking sleazy".
It's opportunistic and gross.
-sent from nuclear bunker
Not that it's Apple's job to fix COVID-19, but this is the equivalent of an average US houshold income family crowing about donating $1.80 of their yearly $63k income. Using Apple's annual profit, not revenue. [Edit: correction $18]
> We’re also announcing that we are matching our employee donations two-to-one to support COVID-19 response efforts locally, nationally and internationally.
Plus everyone is still getting paid:
> All of our hourly workers will continue to receive pay in alignment with business as usual operations. We have expanded our leave policies to accommodate personal or family health circumstances created by COVID-19 — including recovering from an illness, caring for a sick loved one, mandatory quarantining, or childcare challenges due to school closures.
Seriously, Apple's leave policy didn't include "recovering from an illness"??
In fact, the only time I ever had to interact with Apple HR about time off was when I wanted 3 months off after my kid was born. I ended up getting paid for all of it except the last week. Any other time I’ve taken sick leave I just need to let my manager know, and I took 2 weeks once when I was hit by a car.
Don’t get the wrong idea, I don’t take sick leave at the drop of a hat, but I’ve been here for 15 years, and life happens. I currently have the max-possible 240 hours of sick leave available. In my view, Apple are fairly generous for a US company regarding sick leave. US companies pale in comparison to EU companies, but that’s the US for you.
I suspect the answer is no, because I think those are likely all constrained on the supply side right now and money is not currently the problem.
It's sort of like a disaster happening in the area close to you. Maybe you go to try to donate your time to help others affected by the disaster. Maybe when you get there you see 50 other people standing around twiddling their thumbs because there's more people than they have useful tasks for at the moment. Do you stick around all day with nothing to do so you can say you helped, or do you leave after 30 minutes and promise you'll check back tomorrow to see if they have more use for you then?
Elon Musk tweeted "Coronavirus panic is dumb"[1]. When there were school kids stuck in a cave, he sent a team of engineers halfway round the world to try and build a submarine rescue effort. Instead of tweeting that, he could have tried to build cheap CPAP/respirators in bulk, on short notice and deliver them to hospitals.
I'm not saying he should have, but SpaceX dropped the price of rocketry a lot by trying and using off the shelf components; manufacturing is something which effort and money could plausibly move the needle on quickly, where research into speculative medication might not have any results, and that is something we can imagine him doing where we can't imagine a large company with big manufacturing experience pivoting to doing unexpectedly.
[1] https://twitter.com/elonmusk/status/1236029449042198528?ref_...
Could he have? How long would it take to retool and retrain whatever resources are needed to be able to do that and actually start producing something? What capacity would he be capable of putting out, given that his his facilities are probably configured for a much difference scale (cars and large semi-bespoke aeronautical components)? If it's a 5% increase in CPAP machines 6 months from now, how helpful is that?
What if doing so means that 20% of the workforce no longer has work to do? What if not producing their actual product and CPAP machines instead leads to enough loss in money/market they need to let some amount of their workforce go?
At some level I don't think asking Musk or Tesla/SapceX to do this is really any different than asking you to work half days for three months and donate the other half your time to helping with Coronavirus issues in some manner while living off savings to help supplement less pay. If during or at the end of that time you don't have a job anymore (either because you weren't there or general market recession), or some major problem came up that you were unprepared to address because you've been reducing your savings, was that a smart thing to do? Did it help more than it hurt? What if you have a family to support?
Musk's responsibility is to his stock holders and employees. He should do his best to make sure his company runs well and is profitable enough that he's not laying people off, or causing the stock price to drop any more than it might because the general market is in free fall, which also negatively affects many (including retirees and pension funds).
The difference is that Musk is a billionaire and could waste $1M a thousand times over, and barely move the needle on his net worth, and I couldn't. I reject your suggestion that Musk trying to build some air pumps and failing might leave him homeless and unable to provide for his family and leave Tesla/SpaceX in tatters.
> how long would it take to retool and retrain whatever resources are needed to be able to do that and actually start producing something?
Tesla crowed about building an "entire new general assembly line" in 3 weeks with "minimal resources" when they started building cars in a tent in 2018: https://www.theverge.com/2018/6/22/17488372/tesla-model-3-pr... Let's imagine that making ventilators is simpler than cars, so how about ... i dunno .. 2 weeks?
> At some level I don't think asking Musk or Tesla/SapceX to do this is really any different to ..
To .. the UK government asking carmakers (and other companies) to investigate whether they could produce ventilators? Because they have done that - Ford, JCB, Rolls Royce, are "looking into it". https://www.bbc.co.uk/news/business-51914490
A producer of ventilators says, in that article, "they can't they can't, woe, woe" which is what the space industry used to say about SpaceX, and the car industry about decent electric cars. ""The idea that an engineering company can quickly manufacturer medical devices, and comply with the rules, is unrealistic because of the heavy burden of standards and regulations that need to be complied with," said Penlon's Mr Thompson." - a) change the rules for an emergency situation, b) instead of making positive pressure ventilators which have to force clean air into a patient's face with all kinds of sterility problems, make negative pressure ones which the patient is inside and not otherwise touching or breathing air out of, lowering the risk of infection and other complications.
> If it's a 5% increase in CPAP machines 6 months from now, how helpful is that?
Good question. Who knows? The company in the above link makes 750 ventilators annually, so a 5% increase in those would be making 37 machines. Imagine if a billionaire made 37 machines and didn't save anyone. What folly. Everyone would laugh!(?) Have you seen any suggestions that COVID-19 will be done and dusted, worldwide, in 6 months? Can't think that I have.
Disney is interesting because they have the deepest bench, so to speak in terms of catalog. They also have the kids stuff, and all the kids are at home. They also had their stock dip below $100 with the crash this week, had to shutdown their parks, and quite recently reorganized the entire direct to consumer business. I'd put some money on Disney coming out on top there.
Netflix relies on new content to reduce churn. If production is halted I don't know how that looks for them. However if you take out their capex on production, they suddenly become stupidly profitable. So who knows.
As for the rest of people, I agree that when you're competing with hundreds of other sources of entertainment and ways to spend your days, Netflix's catalog may not be amazing, but when most of the population is stuck at home, I'm sure there are plenty of stuff people will find and enjoy on Netflix.
Disney is definitely a runner up too. They've started moving releases closers. They just released Frozen 2 and the new Starwars movie digitally.
I don't think any analysis is valid right now since we don't know what long term even means at this point.
I think the companies that will benefit will be entirely unpredictable, because we're about to fall into a steep descent in our gradient and the optimization of companies business models and products is about to get crazy. Just like '08 and '01.
I've already tried buying some stuff I'd normally get at a store from Amazon and the lead time was questionable.
Better way to think is what is NOT going to change - food, shelter, utilities, telco, etc.
Will go down - luxuries, appliances, home improvement, cars, etc.
The only problem in the long run with streaming services is that they will soon run out of fresh content.
I find it guileful that they announced the closure in the middle of the night at the end of the week, a day after having announced the opening of their four remaining China stores to great fanfare from the equity market.
If they were only concerned about the virus, they would take the display models out of the showroom and continue to process pick-up orders. And they wouldn't shut down stores worldwide (ex-China).
No health body has recommended worldwide retail shutdowns, and no competing device vendor has closed all of its stores worldwide (ex-China). This is a ramification of the factory shutdowns we saw in China several weeks ago.