AP­PLE UP­STAGES AMA­ZON IN SE­LECT­ING NEW TECH HUB LO­CA­TIONS

Techlife News - - Summary -

One tech gi­ant strung dozens of North Amer­i­can cities through a cir­cus-like con­test that led may­ors and gov­er­nors to des­per­ately pitch their re­gions — and of­fer huge sums of pub­lic money — in hopes of land­ing a gleam­ing new cor­po­rate cam­pus. The other swept in qui­etly be­fore mak­ing its big move.

The out­come was largely the same: Ama­zon and Ap­ple are run­ning out of room in their West Coast home­towns and es­tab­lish­ing a ma­jor foothold in a handful of U.S. cities al­ready known as sec­ond-tier tech­nol­ogy hubs.

But this week, at least, Ap­ple may have won the prize for com­plet­ing its search with the fewest hurt feel­ings.

Ap­ple an­nounced plans to build a $1 bil­lion cam­pus in Austin, Texas, that will cre­ate at least 5,000 jobs rang­ing from en­gi­neers to call-cen­ter agents while adding more lus­ter to a city that has al­ready be­come a des­ti­na­tion for tech star­tups and big­ger com­pa­nies.

The de­ci­sion comes 11 months af­ter Ap­ple CEO Tim Cook dis­closed plans to open a ma­jor of­fice out­side Cal­i­for­nia on the heels of a mas­sive tax cut on over­seas prof­its, which prompted the com­pany to bring about $250 bil­lion back to the U.S.

The com­pany said it will also open of­fices in Seat­tle, San Diego and Cul­ver City, Cal­i­for­nia, each em­ploy­ing at least 1,000 work­ers over the next three years. Ap­ple also pledged to add hun­dreds of jobs each in New York; Pitts­burgh; Bos­ton; Boul­der, Colorado; and Port­land, Ore­gon.

“They are just pick­ing Amer­ica’s most es­tab­lished su­per­star cities and tech hubs,” said Richard Florida, an ur­ban de­vel­op­ment ex­pert at the Univer­sity of Toronto.

Ap­ple’s scat­ter­shot ex­pan­sion re­flects the in­creas­ing com­pe­ti­tion for en­gi­neers in Sil­i­con Val­ley, which has long been the world’s high­tech cap­i­tal. The bid­ding for pro­gram­mers is driv­ing salaries higher, which in turn is cat­a­pult­ing the av­er­age prices of homes in many parts of the San Fran­cisco Bay Area above $1 mil­lion. Many high-tech work­ers are thus choos­ing to live else­where, caus­ing ma­jor tech em­ploy­ers such as Ap­ple, Ama­zon and Google to look in new places for the em­ploy­ees they need to pur­sue their fu­ture am­bi­tions.

“Tal­ent, cre­ativ­ity and to­mor­row’s break­through ideas aren’t lim­ited by re­gion or ZIP code,” Cook said in a state­ment.

Cities around the coun­try of­fered fi­nan­cial in­cen­tives in an at­tempt to land Ap­ple’s new cam­pus, but Cook avoided a high-pro­file com­pe­ti­tion that pit­ted them against one

an­other, as Ama­zon had be­fore de­cid­ing to build huge new of­fices in New York and Vir­ginia.

Ama­zon could re­ceive up to $2.8 bil­lion in in­cen­tives in New York, depend­ing on how many it ul­ti­mately hires there, and up to $750 mil­lion in Vir­ginia. Ap­ple will re­ceive up to $25 mil­lion from a jobs-cre­ation fund in Texas in ad­di­tion to prop­erty-tax re­bates, which still need ap­proval. The fig­ure is ex­pected to be a small frac­tion of what Ama­zon re­ceived.

The gov­ern­ment in­cen­tives of­fered to Ap­ple seem “more in the line of nor­mal busi­ness site se­lec­tion” com­pared with Ama­zon’s pub­lic “shake­down,” said Mark Muro, a se­nior fel­low at the Brook­ings In­sti­tu­tion’s Metropoli­tan Pol­icy Cen­ter.

“There’s a grow­ing back­lash in the coun­try against the en­tire process of sub­si­dies and re­lo­ca­tion in­duce­ments,” Muro said. “That said, the Ap­ple num­bers for a very sig­nif­i­cant in­crease in jobs are much less eye-pop­ping than the Ama­zon num­bers.”

The spots where Ama­zon and Ap­ple de­cided to ex­pand were ob­vi­ous choices, based on an anal­y­sis re­leased ear­lier this year by CBRE Re­search. Wash­ing­ton, D.C., ranked as the third best place in North Amer­ica for tech tal­ent, be­hind Sil­i­con Val­ley and Seat­tle. New York ranked fifth and Austin sixth. No. 4 was out­side the U.S.: Toronto.

The new Austin cam­pus, with about 3 mil­lion square feet (nearly 280,000 square me­ters) of of­fice space, will be about a mile from an­other large of­fice that Ap­ple opened five years ago. Ap­ple cur­rently em­ploys about 6,200 work­ers in Austin, mak­ing it the com­pany’s largest hub out­side Sil­i­con Val­ley even be­fore the ex­pan­sion.

The new jobs are ex­pected to mir­ror the same mix Ap­ple al­ready has at its Cu­per­tino, Cal­i­for­nia, head­quar­ters, rang­ing from jobs in tech­nol­ogy and re­search that pay well over $100,000 to lower-pay­ing po­si­tions in cus­tomer call cen­ters.

Cities have been ea­ger to bring in more tech em­ploy­ers be­cause their hires of­ten make six-fig­ure salaries. That can rip­ple through the econ­omy, with new em­ploy­ees fill­ing res­tau­rants and the­aters, buy­ing prop­erty and pay­ing taxes.

But an in­flux of af­flu­ent tech work­ers can also drive up rent and home prices, mak­ing it more dif­fi­cult for those in lower-pay­ing jobs to make ends meet.

“When tech com­pa­nies in­vest in a place and try to hire thou­sands of work­ers, it is of course good news for tech work­ers who are al­ready there and want to be there,” said Jed Kolko, chief econ­o­mist for em­ploy­ment web­site In­deed.com. “But it can put a strain on the hous­ing mar­ket and trans­porta­tion.”

Texas Gov. Greg Ab­bott hailed Ap­ple’s new cam­pus as a mile­stone de­vel­op­ment that “truly el­e­vates Austin as one of the pre­mier tech­nol­ogy hubs in the en­tire world.”

Ap­ple’s move was cheered by Pres­i­dent Don­ald Trump, who thanked Cook in a tweet for “agree­ing” to ex­pand its U.S. op­er­a­tions. It was sharp change in tone from Septem­ber, when Trump re­sponded to Cook’s con­cerns about tar­iffs by telling Ap­ple to make its prod­ucts in the U.S. in­stead of China. Ap­ple uses plants in China and else­where to pro­duce com­po­nents and as­sem­ble its prod­ucts.

2018’s big­gest gam­ing ti­tles re­vealed evo­lu­tions in the iOS mo­bile gam­ing mar­ket. From sub­scrip­tions and in­tel­lec­tual prop­erty to ad rev­enue and cross-plat­form pro­mo­tions, take a closer look at the chang­ing gam­ing land­scape, and see what the fu­ture holds for the in­dus­try.

THE BIG­GEST YEAR

Whether you con­sider your­self a hard­core Fort­nite player or you just en­joy a game of Candy Crush from time to time, it’s hard to deny that 2018 has been an in­cred­i­ble year in the world of mo­bile gam­ing. This year, more than 2.3 bil­lion of us have tapped, shook, and flicked our smart­phones and 46% of us - 1.1 bil­lion - have spent money pay­ing for premium ad­dons. That’s not all - for the first time ever, we’ve helped mo­bile gam­ing take over desk­top and con­sole gam­ing, with tablet and smart­phone gam­ing in­creas­ing more than 25% and adding an eye-wa­ter­ing $70.3 bil­lion to the cof­fers of big names and in­de­pen­dents.

In­ter­est­ingly, it’s not just the United States and West­ern mar­kets that have been spend­ing big money on their fa­vorite games. China comes out on top of the Game Rev­enues Rank­ing, spend­ing an in­cred­i­ble $37.9 bil­lion on mo­bile games this year. The US and Ja­pan fol­low in sec­ond and third on mo­bile spend, splash­ing out $30.4 bil­lion and $19.2 bil­lion re­spec­tively. Euro­pean mar­kets are catch­ing up, too, with Ger­mans spend­ing close to $5 bil­lion this year on iPhone and An­droid games, while South Ko­rea spent $5.6 bil­lion on mo­bile games and add-ons.

With smart­phone adop­tion at its high­est level (32.3% of cit­i­zens world­wide have a phone)

since records be­gan, and af­ford­able smart­phone man­u­fac­tur­ers dom­i­nat­ing the mo­bile mar­ket, more and more of us have ac­cess to the Google Play Store and App Store and are spend­ing our hard-earned cash on en­ter­tain­ment. Huawei, for ex­am­ple, is set to grow to $100 bil­lion in rev­enue be­fore the New Year af­ter in­vest­ing in mar­ket­ing around the world, and is not only chal­leng­ing the likes of Sam­sung and Ap­ple but is pro­vid­ing con­sumers in both Asian and West­ern mar­kets with low-cost, high-pow­ered phones suit­able for gam­ing.

Ac­cord­ing to some tech­nol­ogy jour­nal­ists and gam­ing an­a­lysts, 2018 was the year when the mo­bile gam­ing mar­ket fi­nally started to take it­self se­ri­ously. In­deed, we’ve gone years try­ing out one-hit won­ders such as Flappy Bird and Tem­ple Run, but with se­ri­ous game de­vel­op­ers now turn­ing their at­ten­tion to the mar­ket in a bid to cre­ate the next global smash, we have ex­pe­ri­enced a whole wave of in­no­va­tion in 2018 - one that will fol­low into the years to come.

GOT THE POWER

Although smart­phones have been ar­guably the most pop­u­lar gam­ing plat­form for the past cou­ple of years, they haven’t been able to com­pete with the likes of the XBox, PlaySta­tion or desk­top com­put­ers. Un­til now, that is. In 2018, many news out­lets re­ported on the fact that it makes more sense to buy an iPhone XS for $1,000 than it does to buy a $1,000 MacBook, as the for­mer of­fers more power and func­tion­al­ity and is more likely to be used to its po­ten­tial.

Some tech­nol­ogy an­a­lysts say that the pro­ces­sors in the lat­est iPhones are ‘paving the

way’ for a hy­brid iPhone and MacBook line, with the lat­ter us­ing the same Ap­ple A12X chip to power its PCs. In­deed, a com­par­i­son of the XS Max and MacBook Pro from tech­nol­ogy fan Alex B showed very lit­tle dif­fer­ence be­tween the two de­vices’ CPU and GeekBench specs, which means that many are now aban­don­ing their desk­top com­put­ers and lap­tops and choos­ing smart­phones in­stead.

In 2018, the com­put­ers in our pock­ets are just as pow­er­ful - if not more pow­er­ful - than the com­put­ers we use in the gam­ing room, and de­vel­op­ers are cash­ing in on the ever-clos­ing tech­no­log­i­cal gap. Games that five years ago would only have been avail­able on PC are now be­ing re­leased to our smart­phones, which is mak­ing the in­dus­try more ex­cit­ing than ever be­fore. Fort­nite, for ex­am­ple, is ar­guably the big­gest gam­ing hit of the year - in May of 2018 alone, a month af­ter launch­ing on iOS, de­vel­op­ers gen­er­ated a record-break­ing $318 mil­lion and end-of-year turnover is set to be in the hun­dreds of mil­lions, all thanks to a sin­gle game.

What’s so in­ter­est­ing about Fort­nite, how­ever, is that the Fort­nite Bat­tle Royale was orig­i­nally re­leased to games con­soles and com­put­ers in 2017, but it was only when it was ported to iOS and An­droid this year that it re­ally took off. Rather than be­ing a wa­tered-down ver­sion of its desk­top ex­pe­ri­ence, the mo­bile game is an iden­ti­cal port and it’s cross-plat­form; you can do ev­ery­thing on Fort­nite on iOS that you’d be able to do on Fort­nite on the com­puter, which trans­formed the in­dus­try and is spear­head­ing wider change. Play­erUn­known’s Bat­tle­grounds (PUBG) is fol­low­ing the same busi­ness plan and

also gen­er­ated in­cred­i­ble prof­its in the first month fol­low­ing its port to iOS. In March of this year alone, PUBG gen­er­ated $103 mil­lion in sales through one-off $30 soft­ware li­censes that it made avail­able for pur­chase on Steam, but is now look­ing to new rev­enue streams such as in-app pur­chases to take the busi­ness to the next level and to di­ver­sify its of­fer­ing.

In-app pur­chases have been the big topic of the year, with gam­ing de­vel­op­ers mov­ing away from the premium or sub­scrip­tion-based model and al­low­ing con­sumers to ac­cess its con­tent for free, with the op­tion of pay­ing for ad­di­tional fea­tures. Fort­nite’s Bat­tle Pass is the big­gest suc­cess story in this niche, al­low­ing de­vel­oper Epic to en­joy on­go­ing profitabil­ity from its game, rather than of­fer­ing one-time pur­chases or use­less in-game cur­rency that is de­val­ued through pro­mo­tions and dis­counts. The game adopts a unique mi­cro­trans­ac­tion sys­tem, which al­lows play­ers to spend $10 on a Bat­tle Pass that un­locks new emotes, skins, pets, and cos­met­ics in the game - and the best part is, play­ers still have to work to ac­cess them. The Passes are ad­dic­tive, rely on users en­gag­ing with the game, and play on the Fear of Miss­ing Out - lim­ited time out­fits and cos­met­ics are in high-de­mand amongst play­ers, which is only height­ened amongst the younger gen­er­a­tion who are fol­low­ing suc­cess­ful streamers and YouTu­bers who are mak­ing mil­lions off of stream­ing games like Fort­nite.

TRAP­PING AND PHISH­ING

2018 hasn’t been an en­tirely pos­i­tive year in the mo­bile gam­ing mar­ket, how­ever. Just as le­git­i­mate de­vel­op­ers are spend­ing all of their

time com­ing up with new ways to get play­ers to part with their cash, ‘bad ac­tors’ are spend­ing their time try­ing to phish users and cap­ture their data and money. Ac­cord­ing to data from mo­bile se­cu­rity com­pany Wan­dera, 25% of all web­based mo­bile phish­ing at­tacks come from de­vel­op­ers cre­at­ing fake games, only to trap users into sign­ing up for in-app sub­scrip­tions or phish­ing data to use on other sites. Many have cre­ated knock-off ver­sions of pop­u­lar games, or add-ons de­signed to of­fer free cur­rency or ex­clu­sive ben­e­fits, and young and in­ex­pe­ri­enced users are down­load­ing them with­out un­der­stand­ing the po­ten­tial con­se­quences. Re­mem­ber to only use the ded­i­cated App Store and down­load apps that are from trusted and known de­vel­op­ers with lots of re­views and com­ments.

But de­vel­op­ers should also take some of the blame. Back to Fort­nite, who was crit­i­cized by Google when it en­cour­aged users to down­load its game out­side of the Google Play Store in an at­tempt to keep more of its in­app pur­chase prof­its; if it was to ap­pear on the Play Store, Google would take 30%. This led to a whole host of fake Fort­nite APK pack­ages be­ing dis­trib­uted on­line, with some gamers in­putting their per­sonal data and Fort­nite pass­words, only to be then hacked.

Re­port­ing phish­ing scams to Ap­ple or Google and re­main­ing vig­i­lant is key. Al­ways rely on the App Store and Google Play Store for in­app pur­chases, and never hand over sen­si­tive in­for­ma­tion or en­ter your pass­words on web­sites or on so­cial me­dia un­less it’s through ver­i­fied and of­fi­cial sources. Bet­ter still, take ad­van­tage of two-fac­tor au­then­ti­ca­tion and only

play games on a trusted de­vice that only you have ac­cess to, or your progress could be lost.

2019 IN MO­BILE GAM­ING

Xbox and PlaySta­tion, be­tween them, still gen­er­ate hun­dreds of mil­lions in rev­enue, but new play­ers like the Nin­tendo Switch are en­ter­ing the fold and en­cour­ag­ing users to look out­side of their tra­di­tional gam­ing set­ups. Mo­bile gam­ing, too, will con­tinue to add to the mix, and the suc­cess of 2018 will no doubt help to change the in­dus­try. Bl­iz­zard, for ex­am­ple, re­cently an­nounced plans for a new game in the Di­ablo se­ries that will be ex­clu­sive to mo­bile de­vices - although the an­nounce­ment re­ceived sig­nif­i­cant back­lash from fans and hard­core play­ers. With more and more gam­ing stu­dios tak­ing their ti­tles to smart­phones and tablets, and with both An­droid and iOS of­fer­ing new ad­vance­ments in aug­mented re­al­ity to power the next gen­er­a­tion of games, like the ever-pop­u­lar Poke­mon Go and iOS 12-ex­clu­sive LEGO AR Stu­dio, the in­dus­try is set to con­tinue to grow at new speeds and uti­lize the hard­ware on our lat­est smart­phones to max­i­mize game­play per­for­mance and de­liver next-gen­er­a­tion ex­pe­ri­ences.

Also set to make a splash in 2019 is the port. Some of the world’s most iconic gam­ing ti­tles, like PAC-MAN, Sonic The Hedge­hog 2 and Roller­Coaster Ty­coon have been ported to mo­bile, spark­ing a wave of new re­leases and sat­is­fy­ing crav­ings from older play­ers. On top of that, on­line games will also make a splash in the mo­bile mar­ket in 2019, with ti­tles such as Old­School RuneS­cape, one of the world’s most suc­cess­ful MMORPGs, on iOS and An­droid. The cross-plat­form ti­tle has at­tracted more than 100,000 play­ers since ex­pand­ing to mo­bile.

Whether you’re into shoot­ers and strat­egy games, or you pre­fer some­thing more lowkey, there is no deny­ing that mo­bile gam­ing is chang­ing. No longer does an iOS game have to be a wa­tered-down ver­sion of a pop­u­lar in­tel­lec­tual prop­erty ti­tle, nor does a tablet gam­ing ex­pe­ri­ence have to be clunky and lit­tered with ads. With new busi­ness mod­els, in­vest­ments, and in­no­va­tions across the sec­tor, mo­bile gam­ing has never been so ex­cit­ing. Time to play!

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