Apple Inc.

[rogerwilco]

http://www.businessoffashion.com/2013/10...apple.html

Angela Ahrendts to Leave Burberry for Apple, Christopher Bailey to Become CEO
BY VIKRAM ALEXEI KANSARA 15 OCTOBER, 2013

Angela Ahrendts is set to exit her role as the company's chief executive in mid-2014 to join Apple. In an usual move, Christopher Bailey will replace Ahrendts, taking on the dual title of chief creative and chief executive officer.

LONDON, United Kingdom — Angela Ahrendts, who many credit with transforming British luxury brand Burberry, is set to exit her role as the company’s chief executive in mid-2014 to join Apple. In an unusual move, Christopher Bailey, currently Burberry’s chief creative officer, will replace Ahrendts, taking on the dual title of chief creative and chief executive officer.

Following the announcement, Burberry shares fell by more than 6 percent in early trading on London’s stock exchange.

According to market sources, Ahrendts is set to become Apple’s new head of retail, a position that has remained open since the departure of John Browett, who lasted less than a year after replacing the company’s first head of retail, Ron Johnson.

“I am profoundly honored to join Apple in this newly created position next year, and very much look forward to working with the global teams to further enrich the consumer experience on and offline. I have always admired the innovation and impact Apple products and services have on people’s lives and hope in some small way I can help contribute to the company’s continued success and leadership in changing the world,” Ahrendts said in a statement.

Ahrendts is the second senior fashion executive to be hired by Apple in recent months. In July, Paul Deneve, former chief executive of Yves Saint Laurent left the label to join Apple, working on “special projects as a vice president reporting directly to Tim Cook.” He is widely thought to be working on wearable devices — personal accessories with embedded sensors, displays and other digital technology such as Nike’s FuelBand, Google’s Internet-connected eyewear and Apple’s rumoured iWatch.

In a recent interview with The Business of Fashion, one of her last major interviews before today’s news, Ahrendts spoke at length about digital innovation and the importance of the company’s “connected culture.”

Burberry chairman Sir John Peace characterised Ahrendts’ exit as “a natural progression,” adding: “I have no doubt that Christopher’s vision and leadership, with the excellent management team in place, will keep Burberry on the forefront creatively, digitally and financially.”

In a separate statement this morning, Burberry released recent trading results, revealing 17 percent growth in retail sales in the six months to the end of September. Total revenue rose 14 percent to £1.03 billion (about $1.59 billion at current exchange rates) helped by double-digit growth in Asia-Pacific and the Europe, Middle East, India and Africa division, and high single-digit growth in the Americas.

[CityFarmer]

With Angela Ahrendts on board, Apple will be the "Burberry" of mobile phones and tablets.

[rogerwilco]

http://www.businessweek.com/printer/arti...tail-chief

Five Things to Know About Angela Ahrendts, Apple's New Retail Chief
By Sam Grobart October 15, 2013
So does this mean plaid iPhones?

Apple (AAPL) announced it has hired Angela Ahrendts, chief executive officer of British fashion label Burberry (BRBY:LN), to become its senior vice president of retail.

The hire fills a hole in Apple’s executive ranks, which has gone without a retail chief for a year. The job has a touch of the ejector seat about it, as the previous SVP of retail, John Browett, lasted only six months in the position. Before that, Apple’s longtime retail boss was Ron Johnson, who left Apple to become CEO of JC Penney (JCP) in November 2011, only to leave that company 16 months later.

But enough about them. What’s the deal on Ahrendts?

1. Ahrendts has done her job at Burberry, and done it well. She joined Burberry in 2006. At that point, Burberry had undergone a transformation from stuffy English trenchcoat maker to modern fashion label, but it had a new problem: brand overexposure. You couldn’t swing a dead cat and not hit something bearing the trademarked tan-and-brown plaid that Burberry had made famous. Similar to what happened to Gucci (GUCG) in the 1970s and ’80s, it threatened to tank the company. Ahrendts slimmed down Burberry’s brand portfolio and returned the company to its high-end roots.

2. Ahrendts’s hire underscores Apple’s desire to stay upmarket. Previous retail chiefs at Apple came from decidedly mass-market companies. Ron Johnson was an executive at Target (TGT) before joining Apple in Cupertino, Calif., and Browett had held positions at Dixons (DSGI:LN), a British electronics retailer, and Tesco (TESO), the U.K. grocer. Ahrendts comes from the world of galas and Gulfstreams. She will be joined at Apple by Paul Deneve, a vice president in charge of special projects who had previously been CEO of Kering’s (KER:FP) (formerly PPR) Yves Saint Laurent brand. In an interview with Bloomberg Businessweek last month, Tim Cook clearly stated that the high end of the tech market is where he’d like Apple to be. Grabbing execs from Burberry and YSL, as opposed to, say, Pep Boys (PBY) and Home Depot (HD), would seem to confirm that strategy.

3. Ahrendts is professionally fancy, but personally more down to earth. Born in New Palestine, Ind., Ahrendts graduated from Ball State University, the alma mater of David Letterman and Oprah-companion Stedman Graham. In what might surprise watchers of both fashion and tech worlds, Ahrendts is an active Christian who reads the Bible daily and wears a cross around her neck.

4. Ahrendts is tall. 6-foot-3!

5. Ahrendts will be the only woman on Apple’s senior management team. Take a look at the “Apple Leadership” page on the company’s website. Notice anything familiar? At a time when the role of women in tech has become a major conversation point, from Lean In to Marissa Meyer’s maternity leave to the gender composition of Twitter’s board of directors, Ahrendts will immediately become one of the leading women in Silicon Valley, as well as in the general corporate world.

Grobart is a senior writer for Bloomberg Businessweek. Follow him on Twitter @samgrobart.

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Hmm... Apple to release wearable computing products?

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http://www.minyanville.com/articles/print.php?a=52241

Apple Poaches Burberry CEO; Will She Earn More Than Tim Cook?
By VINCENT TRIVETT OCT 15, 2013 11:10 AM
Judging by her performance at Burberry, Angela Ahrendts is worth the fortune that Apple is definitely paying her.


Today Apple (NASDAQ:AAPL) poached Angela Ahrendts from Burberry (OTCMKTS:BURBY). This is the third recent fashion industry hire for Cupertino, and one that might cost quite a lot of dough -- in fact, she might cost even more than CEO Tim Cook.

Apple hired Ahrendts as the senior vice president of retail and online stores, starting in the spring. Ahrendts was the highest-paid boss on the FTSE 100 (INDEXFTSE:UKX), hauling in 16.9 million pounds ($26.93 million) in 2012. This year, according to the Independent, she recieved 6.8 million pounds ($10.84 million) before long-term incentives were factored in.

Assuming that Apple will at least match her current compensation, which it probably is doing since she is stepping down from a CEO role, Ahrendts might earn more than CEO Tim Cook. Cook made $4.17 million in 2012. Of course, we won't know his compensation package details for months. It could be vastly different since he brought home an eye-popping $376 million in 2011.

What did Ahrendts do to become one of the richest women in Britain? In 1989, when she was just 29, Ahrendts was already president of Donna Karan International. In 1998, she joined the board at Liz Claiborne. She was hired to replace another American woman as CEO in 2006 when Burberry was floundering. During her tenure at the company, sales tripled and the share price nearly quadrupled. She pioneered Internet marketing for Burberry, introducing streaming fashion shows and allowing customers to order products from those events.

As The Verge points out, she is the second high-profile fashion hire at Apple this year. In July, Apple poached Paul Deneve, CEO and President of Yves Saint-Laurent, who is credited with engineering the brand's retail expansion. Deneve, who worked in sales and marketing for Apple in the 1990s, is now Apple's VP of "special projects." The tech giant also brought on a Levi Strauss & Co executive, Enrique Atienza, to supervise the US retail operations.

Three is a trend. Clearly, since the summer, Apple has been stuffing itself with fashion retail veterans. Why? Apple has a lot in common with luxury brands. It may come out with industry-leading hardware, but it's also an aspirational brand. This is why iPhone buyers don't want to be seen with the cheaper handset, as we saw yesterday.

Apple is already light years ahead of the competition in retail. In 2012, Apple stores generated $6,050 in sales per square foot -- more than double the next ranked company, Tiffany & Co. (NYSE:TIF). Apple retail stores are largely credited with making Macs familiar to the masses, but Apple competitors aren't following this strategy: Microsoft (NASDAQ:MSFT), for example, has fewer than 100 owned retail stores. And as much as Apple accuses Samsung (OTCMKTS:SSNLF) of copying its designs, the Korean conglomerate never followed Apple into retail. Samsung, which sells far more handsets than Apple but takes a smaller share of global smartphone profits, only has a few Best Buy (NYSE:BBY) locations featuring a Samsung "store within a store."

One can only speculate as to why Apple is poaching high-profile fashion geniuses, but one "theory" in the rumor mill is that Cupertino will use their expertise to market and sell wearables, like the fabled iWatch that people have been talking about for years.

Twitter: @vincent_trivett

[specuvestor]

Looks like the preliminary verdict for the 5C is out:

"The reception for the 5c has been lukewarm in China, which Chief Executive Tim Cook has identified as one of Apple's most important markets. Some local bloggers say the price difference between the 5C and 5S is too narrow."

http://www.reuters.com/article/2013/10/1...8J20131016

[CityFarmer]

Looks like the preliminary verdict for the 5C is out:

"The reception for the 5c has been lukewarm in China, which Chief Executive Tim Cook has identified as one of Apple's most important markets. Some local bloggers say the price difference between the 5C and 5S is too narrow."

http://www.reuters.com/article/2013/10/1...8J20131016

Apple is acknowledging the fact, and adjusting its production orders...

Apple cuts orders of iPhone 5C as consumers prefer 5S

Apple has asked one of its largest suppliers to increase production of the top-tier 5S, which went on sale at the same time, the Wall Street Journal reported. said. Analyst said this allayed concerns that the cheaper 5C will eat into premium sales and erode margins.

Apple has told manufacturers it will reduce orders for the 5c smartphone in the final three months of the year, the source told Reuters. The company added the 5C to the lineup in September along with the flagship iPhone 5S.
http://in.reuters.com/article/2013/10/16...4W20131016

[freedom]

Maybe Apple can take a page from IBM about capital allocation. Putting most of your money oversea does no good to anyone. To make acquisitions? Apple does not spend so much money for acquisition. The oversea operations can fund themselves well enough.

Instead, Apple can use most of its money in the United States. To pay its shareholders through dividends or share repurchases.

To leave most of money oversea does not help improve margin or business. So what's the point? Anti US government?

[CY09]

The main reason is brining the foreign money in is automatically taxed. That is why they keep it overseas.

Using a personal analogy, if you are given 2 choices of 1) your overseas income will be taxed 15% by Singapore upon it being changed to SGD or 2) keeping your foreign money overseas and doing investments without being subjected to such high tax. Which would you choose?

[freedom]

The main reason is brining the foreign money in is automatically taxed. That is why they keep it overseas.

Using a personal analogy, if you are given 2 choices of 1) your overseas income will be taxed 15% by Singapore upon it being changed to SGD or 2) keeping your foreign money overseas and doing investments without being subjected to such high tax. Which would you choose?

First, why is the money oversea in the first place? Apple does it to avoid paying US tax.

Second, leaving the money oversea for what purpose? Just to avoid tax is not a good excuse. It only means the money is dead money for everyone since it is unlikely to be used anyway.

So what's the purpose? To piss the government off?

If I am in that position, I will pay the tax and spend my money if I have no other ways of spending it. What's the use if I am not going to be able to spend the money after I earn it?

[specuvestor]

Money is overseas because revenue is overseas in non US$

It's a cat and mouse game. There was debate on allowing foreign capital to return on reduced tax rate but then again it becomes a moral hazard ie corporates keep waiting for tax breaks like this to repatriate.
http://www.bloomberg.com/news/2012-04-23...sband.html
"

For apple the cost of funding now is lower than payting the tax. So they rather issue bonds to pay dividends than repatriate. For now.

[freedom]

Apple and the likes can continue to dream on that the US government will lower repatriation tax. It is unfair for all those honest companies which paid the tax.

What do you mean by "revenue is overseas in non US$"? The revenue is overseas because they don't use their US subsidiaries to make the sales, which would pay higher tax. So still tax avoidance.