To anyone who has visited the current “campus”, it’s obvious that Apple has outgrown it some time ago. It’s also obvious given the increase in headcount and operational expenses over time as can be seen below:


Screen Shot 2013-04-15 at 4-15-12.27.57 PM

(I added Q1 2013 estimate based on company guidance.)

One can understand why, from a practical point of view, they want to consolidate what amounts to at least twice as many people back into one place.

But there is also a more subtle reason and it has to do to a fundamental distinction: Apple is a functional organization. Unlike almost every other large company it’s not organized in “divisions” which have responsibility for “a business” in the sense of profit or loss. At Apple most people or teams are assigned a function like “design”, “engineering”, “sales” etc. When a product is being built, they are assigned to that effort. When the product is complete, they go to another product.

This is not a matter of hypothesis. Not only have we heard rumors of how one product was delayed (e.g. OS X) because the teams were busy finishing another (iOS), but Adam Lashinsky’s work (sanctioned by Apple as it was) revealed the structure almost two years ago.

This structure may seem obvious to those working in small companies, but it’s completely unheard of in large companies. The nearest comparison to this structure is a military organization. There you have Infantry, Armor, Aviation etc. These groups are assigned (in a combined fashion) to a particular effort or battle and then go back to the barracks when done.

Another example is the way movies are made. Disney famously built his company around the same principle.

Seen from this perspective, the architecture of their proposed campus makes perfect sense. If it was a divisional structure then each division could live in its own building or campus. In fact, each division would not have much to talk about to any other division. But as a functional organization Apple needs to move people quickly between projects. It needs to re-configure itself frequently. Being in the same building means they can do this much more efficiently.

This is why there needs to be one building and this is why the shape chosen is probably optimal: each point within can be reached with minimal routing. The fact that it’s aesthetically pleasing is a coincidence.

Or perhaps not. Some say that in beauty there is truth. At least to me, the design looks to be pure logic.

  • Childermass

    Deep subject, and I will declare myself as a ‘truth in beauty’ man. Nevertheless building design does affect how we think and feel as well as how we move about. Try for a start.
    It is no coincidence that the Enlightenment coincided with higher ceilings.

    • obarthelemy

      Correlation does not imply causation… maybe architecture progressed as part of the Enlightenment ?

      • YesToSpaceship

        Yet causation does imply causation. Jobs caused Apple’s success. Job’s passionately wanted the Spaceship. Why should we doubt this is a good thing? Let’s give Steve the benefit of the doubt.

    • Duncan

      It is no coincidence that lower ceilings and smaller windows coincided with the affordability of air conditioning.

      • FalKirk

        “It is no coincidence that lower ceilings and smaller windows coincided with the affordability of air conditioning.” – Duncan

        Isn’t it possible that you have cause and effect reversed…that air conditioning made lower ceilings and smaller (and no) windows more practical?

      • I remember some of the buildings in the 1970’s looking a bit like prisons.

        As an aside, I had the opportunity to tour Frank Lloyd Wright’s Falling Water just a week ago. The tour guide explained that the low ceiling was to draw your attention to the view out of the mostly glass walls. I don’t mean to discredit what @Childermass:disqus has said, just offering up an alternative.

      • Childermass

        Exactly. FLW knew the emotional effect he wanted and used space to allow it.

      • GiveJobsTheBenefitOfDoubt

        Do you know what the ceiling height is in the Spaceship??

      • Childermass

        Sarcasm aside … unless you are merely referring to recent electrical a/c then the answer is no they didn’t. The Arabs and Indians used large wall spaces (high ceilings) with false lattice-work fronts to allow water to gently cascade down the inner wall. That and the very large windows and doors to allow air to circulate freely causes the desired cooling. Try the Alhambra, or the Red Fort in Agra.

  • obarthelemy

    I’m sure the reality is a bit more balanced than that:

    1- some people are attached long-term to long-term projects: OS work, Cloud software, even apps don’t have a beginning and an end, there’s ongoing work the whole time, it makes no sense to stop-and-go it. There must indeed be a “floating contingent” of people that get reassigned to priority projects on an as-needed basis, but that makes it all the more important that “project insiders” be available to manage them.

    2- that works when you have few products and product lines. Apple have what, 13 ? (iPod, iPad, iPhone, Macbook, iMac, Mac, Mac Mini, Apple TV, Accessories, Software, apps, cloud ?) and are already neglecting some product lines (Mac, Software)

    Of course, extreme balkanization à la Microsoft with departments not only disconnected, but often working against each other is way worse… see Kin, or Office for Metro (what Office for Metro ? Exactly !) Then again MS have an order of magnitude more products than Apple.

    • JohnDoey

      The Mac is not being neglected. It moves more quickly than any other Intel-based system. The Mac has a 3 year AppleCare service plan. When you replace a 3 year old Mac, every single component has been dramatically improved. Buy a MacBook Pro today to replace a 3 year old MacBook Pro and you get Retina Display, 2–4x the RAM, SSD, 10x the CPU/GPU, a much smaller and lighter enclosure, radically redesigned cooling system, and an operating system that is a couple of generations newer and has 400 or more new features.

      Apple’s software is also not being neglected in any way. You are making the same mistake people make when they compare an original iPhone to iPhone 5 and see the same basic form factor and think that nothing has changed, when in fact, almost everything had changed. Today, I can buy a new Mac and open Mac App Store and tap a few buttons and turn the Mac into a pro audio/video editing workstation. It used to take all day just to install and configure Logic, which is about 25 years old. Since Apple bought it, every version got dramatically better and has required less setup, and now it takes only minutes to get up and running. I could buy a new Mac on the way to a session and feel comfortable setting Logic up when I get there. And the iPad/iPhone has hundreds of apps that integrate with Logic on the Mac because Apple put CoreAudio/CoreMIDI into iOS.

      So I disagree with your whole premise.

      • obarthelemy

        When was the last update to the Mac (pro) again ? (you might have noticed I listed iMac, Mini, and Book separately ?)

        As for the software, on the Mac,iTunes, iWork, even Final Cut “pro” have major issues, or haven’t been updated in a very long time. On the PC, iTunes is even worse. I never said anything about iP5 nor OS, so I don’t know what your comment in the iP5 comes from.

        It’s probably good for Apple to keep a non-siloed organizational chart. It does have its cost in terms of how many markets Apple is able to handle.

      • capnbob67

        Your personal attribution of Apple’s issues is pretty irrelevant to an analysis of the effectiveness of organization structure. Your anecdotal musings are poor support for that argument, e.g.

        the Mac Pro is the outlier that proves the rule. It is the lowest volume, most difficult and non-synergistic item in their HW portfolio and they would probably be better off dumping it for business reasons (effort vs. return). It is not an issue of neglect or lack of capacity to manage it. It is a choice (or rather the lack of making one). Every other Mac is on a fairly breakneck update schedule these days (since most share core components) with strong innovation occurring regularly (retina, SSD, form factors, thunderbolt, USB3, battery tech. etc.) typically rolled out to most models quite quickly

        Software is an area where everyone can have an opinion about what constitutes perfection but iTunes is constantly updated, iWork is still yearly, Final Cut has been repositioned to a mid-market position (hence bitching from high-end users), etc. Compare to Microsoft who still push out reasonable (but rarely brilliant) software but also garbage and bloatware on a highly irregular schedule… and they are a software company with specific divisions for key products. Creating a new division does not somehow give you the magical capacity and capability to execute well – see constant MS or Google failures. Apple have as broad a scope of things to manage as does MS but Apple seems to be consistently doing better with its structure.

  • StoneFlake

    Apple functional org. is a fact, and a anomaly among large cos and an essential element of Apple’s unique strategy/execution.
    Having said that, isn’t it about time Apple sustain a bit more of a divisional structure, specially in their software roadmap? iOS, OSX, iTunes, Final Cut and iWork etc.: they all have in common recent stories of delays, setbacks, haphazard evolutions etc.
    It makes MS Office’s consistent evolution looks goods in comparison…

    • No.

      • Walt French

        There are lots of faMany factoids, such as Ron Johnson going from genius to disaster when he was taken out of the Apple system, suggest that Apple is indeed exceptionally well-structured for its work.

        But I think the organizational advantage deserves a lot more study before we can say why it’s the right thing for Apple, why it would or not be the best way for say, Microsoft to organize this way. (Microsoft’s internecine battles, and the cost of them to strategy, are legion. But isn’t that really just a sign that Ballmer doesn’t have the vision or authority to keep the OS, Office and hardware groups aligned with the overall company success?)

        I have long thought that in most organizations senior management is the most limited resource. That’s why the CEOs get the megabucks, despite often being way less than superb at what they do. Apple was cited today as having incredibly expensive senior management, and although I’d be foolish to argue with the results, I wonder whether the typical firm’s org chart reflects the reality that the top management can only be excellent at so many things at once. This may make for a great iPhone, which is inarguably the most important product in the lineup. But it makes for a sucko iWork suite, way under-resourced considering its potential for pure profit and its potential role as the Office replacement for mobile (and the desktop, which needs mobile more than mobile needs the desktop).

        Everybody has his favorite area to develop faster, but despite my sympathy with the almost-abandoned Mac Pro users, I think software is the area where Apple most reliably settles for 80%, rather than 99% solutions, enough to discourage third parties from Apple-first professional tools, but leaving Safari, iWork and other products at levels that discourage pros from relying on Apple.

        While the bar for Tim Cook’s and Bob Mansfield’s time must be incredibly high, why couldn’t they profitably oversee, at arm’s length, standing projects that, while not the product du jour, are so basic to Apple’s success? Why wouldn’t some more standing efforts work even better for Apple?

      • Sacto_Joe

        Here’s the problem with your standing projects: It’s more organized, but it inevitably creates fifedoms. I’ve seen how destructive fifedoms can be to the ability to adapt new ideas. And since new ideas are Apple’s life’s blood, it’s obviously a conscious decision to not go there. Does that mean that Apple is slow to move in a classic sense? Of course. But it’s a case of taking the bitter with the sweet.

        Take the iWork suite: It’s clear to me that Apple would much rather someone else did the job, preferably Microsoft. In fact, the failure of Microsoft to bow to the inevitable and move the Office suite to iOS is just amazing to me. To forgo all that income for what amounts to a fit of pique is just shocking. Now, I’ll admit that it needs to be done just right, and that’s no easy task, but even slowboat Apple may end up getting v2 of iWorks in place before Microsoft makes their move. And if that happens then Office may find itself with a true competitor on its hands.

        Bottom line: It’s frustrating waiting on Apple, but the proof of the pudding is in the eating.

      • Walt French

        I’m still frustrated in understanding why some functions and some organizations demand a unitary model, while others require divisions. The bumbling at Microsoft seems to have little to do with their success; when they were growing rapidly they had the same structure, no?

        But what they ALSO had was an undisputed leader, personally extremely talented and strategic as all hell; he just didn’t go the next step to create a Microsoft U that inculcated his ability to judge and focus in the top 100 Softies.

        BTW, I’m much less confident that Office on iOS is a bad lost opportunity than I used to be, and than you seem. Microsoft could profit much more IF RT-class and WP machines took off because of significantly better Office compatibility, than if Microsoft blessed iOS products as a Microsoft-Approved Mobile Solution®. Past Microsoft strategies don’t leave me very hopeful for their success, but unless WP and Metro take off pretty soon, Microsoft would be better off putting them on life support and redirecting to whatever the next Next Great Thing is.

      • rational2

        The answer to your Microsoft org question may be answered by this observation. The different Microsoft divisions could operate with minimal interaction, mostly through apis and libraries as interfaces, and still produce reasonably well integrated systems and apps running on a pc. Now we are in a different world, with vertical integration of devices, interaction between services etc that are not as simple as api level loose coupling.

      • JohnDoey

        We don’t need to know why it works. We just have to recognize that nothing succeeds like success. The modern Apple not only works better than the modern Microsoft, it also works better than the Scully Apple. We have seen what happens when Apple is run by MBA’s instead of designers and we don’t like it.

        Also notice that 3rd party Mac/iOS developers and 3rd party music/movie producers are essentially divisions of Apple. So Apple is not working alone, they have many people orbiting the mother ship.

      • Walt French

        As I replied to @Sacto_Joe, Microsoft was hugely successful until lately, with a very different org chart. If we want to assert that Apple is not coasting on the Jobs genius the way that Microsoft did, but has been unable to keep coasting on the Gates genius, we should understand what drives success. This website is perhaps our best chance to catch the difference, which I think we all see but maybe haven’t quite put our fingers on.

      • Tatil_S

        Could you define “lately”? I’d say MS ate fruits of the dominance of Windows and Office established until the mid 90’s, back when it was inevitably much smaller. Since then, its only success in consumer products was developing a browser and bundling it with Windows, years after Netscape has showed the way. Xbox has sold many, but there is a good chance it has not made back all of the money spent on it, as that division has started losing money again early last year. In other words, stagnation in MS has been on going for almost two decades now.

      • Walt French

        IIRC, Horace once mentioned that Microsoft was a strong disruptor until about 2002. I wasn’t paying close attention at the time but that sounds about right.

        OK, calling 11 years “lately” is a bit of a stretch.

      • Tatil_S

        I suppose it was still growing in Enterprise, but I am not sure if I would call MS a disruptor in consumer markets in 2002. In any case, my main theory is that it is easier to sustain a dominant market share (or a revolutionary disruption) for a long while after your company culture or organization has become an impediment for long term health. It might be a mistake to compare MS after 2002 with MS before 2002 and think that the explanation cannot lie in how the company is organized, because it was the same before 2002 and after 2002. We need to look at what happened around the time when the patient contracted the disease, rather than when the symptoms became unmistakeable.

      • claimchowder

        Using Microsoft as a yardstick to measure other companies is, IMHO, a mistake.

        This company was not successful due to the merits of their products *or* their leader, but due to their status as a monopoly. I’m not a Microsoft-Hater but Gates never did or said anything particularly impressing. Their monopoly was generated on little interaction with customers and instead by making deals with OEMs, mostly to the disadvantage of customers who ended up having no choice. That was possible due to a well understood set of circumstance, luck, lack of ethics and the ability to see and seize an opportunity, which is the one merit I grant them.

        Yes, they were successful, but not in a sustainable way (a lot of their end users hate their products). I doubt they would have been successful under any other set of circumstances, so we should find a different company as a reference.

      • anonymous_coward12

        if i had to guess, apple is around where MS was in 2001 or 2002. revenue and profit growth is slowing down and they are in a replacement cycle now.

        give it another few years for someone to make a good enough but cheaper product for people to dump their iphones and ipads. or as in the case of Windows, stop buying new versions and keep their current toy longer.

        i remember MS in the 90’s. 12 years ago you couldn’t touch them. chances are apple will end up the same way. apple of today is not the same apple of 10 years ago.

      • WhatAboutMacs?

        “give it another few years for someone to make a good enough but cheaper product for people to dump their iphones and ipads.”

        Well, there have been all sorts of companies offering “good enough but cheaper” personal computers for the past seven years, but that hasn’t stopped Mac from persistently taking market share with its high-end, expensive laptops and desktops. So why should we assume that there won’t similarly be a strong market in search of a high-end (and expensive) product with phones and tablets? I keep hearing your argument over and over, but it contradicts what is happening in the consumer personal computer market.

    • poke

      The problem with divisions is that they’re hard to get rid of.

    • JohnDoey

      MS Office is not better in any way than Final Cut, Logic, Aperture, OS X, iOS, etc. Apple’s software has made revolutionary leaps and then provided consistent evolution in-between those leaps, while MS Office has not really improved at all for most of its users, most of the time, and is still stuck in 1985 in many ways.

      So: no.

      • rational2

        I take it you haven’t been sold on the Ribbon UI 🙂

      • claimchowder

        …which was (poorly) stolen from NeXT’s inspector model.

    • As a matter of fact, huge growth goes with organization changes, it occured to some people that new CEO was a finance expert here to work for stocks earnings.

  • LTMP

    Reminds me of something my gymnastics coach told me when I was a kid. “The most efficient way to do something is also the most beautiful”.

    He went on to coach the Canadian olympic team.

  • I think with Cook’s re-shuffle Apple is becoming more functional but I don’t agree it always was. Maybe people think that because only one person (the CFO) controls the P&L, but if you look in the past Jon Rubenstien and then Tony Fadell owned the iPod division. For a while Bob Mansfield had responsibility for Mac Hardware, Scott Forstall was in charge of iOS, and there was a different leader for OS X. Only now has Cook turned Apple into a truly functional organization with one leader for software, hardware, design and services. Along with the support teams for operations, finance, marketing, legal, etc.

    • JohnDoey

      That was only because those products were new. There may be a tiny “watch division” within Apple right now, but after launch it would gradually become part of the whole.

      iOS *is* OS X, same as GarageBand is Logic underneath. They were never really separate. iOS is just a convenient marketing name for “OS X on ARM” or “consumer-focused OS X.”

      iPod was developed and launched in 2001, but by 2002 they were already running OS X on it behind the scenes. Only 6 years later the iPod phone and iPod touch were launched, running OS X.

      If you compare Word on MS TabletPC/Surface to Pages on iPad you can see that Microsoft’s Office division severely hamstrung the MS tablet products, while Apple sang from the same songbook the whole way. iPad launched with a full touch version of Pages — Microsoft has yet to ship a touch Word, over 10 years after their first tablet product.

      • Chaka10

        I use iWork on my iPad, but it seems to miss some basic functionality. Until the last update Pages didn’t have track changes. It still doesn’t have a highlighting function and does not have “print to PDF”. I.e., iWorks can and need to be improved for the professional/enterprise grade use.

      • Print to PDF is built in to all OS X apps. It’s part of the print dialog box (you can even mail PDF with one click). A more elegant solution would be under the Share menu and a more controlled solution is under the Export option. PDF support is system-wide and I use it almost every day in iWork.

      • Chaka10

        Sorry, I should have been clearer. Where I miss print to PDF is in iOS.

      • iwork

        That is in there too. When you go to Tools > Share and Print all the options there have an option for PDF export. e.g. Email Document and select PDF or Open in Another App, select PDF and open in iBooks, etc.

      • Chaka10

        Indeed. I stand corrected. Thank you.

  • poke

    It’s another iteration of the Pixar building. In the Pixar building the offices are arranged around a central atrium where people meet. In the Spaceship campus the offices are arranged around a central courtyard.

    • Walt French

      Correct me if I’m wrong, but the Pixar space was laid out so that creatives and techs got together easily and naturally, not that they were intermingled. There might be some natural progression as R&D flows into core software, which flows into hard and soft product concepts, which flow into production and marketing. But I have yet to hear that the Spaceship is supposed to be a convenient physical embodiment of the way that teams naturally pass the ball forward.

      • JohnDoey

        In the Jobs biography, Jobs himself is quoted as saying the Apple spaceship is designed to produce collaboration, same as the Pixar building.

        In the spaceship, if you want to get to the opposite side if the building, you have to walk half of the building’s circumference, passing by all kinds of people you might not otherwise see, same as in the (much smaller) Pixar building you have to walk through the center to get anywhere.

      • steve_wildstrom

        Eero Saarinen’s IBM Watson Research Center in Yorktown Heights, N.Y., is a semicircle with offices and labs on projecting fingers. To move between fingers, you have to go to the hub, sort of like connecting between airport concourses. Mostly it’s a PITA.

      • pk_de_cville

        Even better, one could choose the short cut through the interior park. I imagine that park ‘regulars’ would self select on the aesthetics of the walk.

      • Jon Romig

        This planning concept is called “strategic inconvenience” – forcing a less efficient layout on people in order to increase interaction. It is often used in research environments, but at a much smaller scale. As a 30 year architect/planner of science and technology buildings, I doubt that the proposed building will pull it off – the scale and distances are just too great.

  • RobDK

    Or as Mies van der Rohe said “Form follows Function”, the holy grail of Modern Architecture!

    • I thought it was Louis Sullivan.

    • Silencio

      Louis Sullivan coined the “Form follows function” quote.

      Mies most famously said “Less is more”, which is also very applicable to Apple design.

  • albertkinng

    Again. Even that he is Dead… Steve was a genius.

  • anonymous_coward12

    technically iOS is just OS X lite. our security appliances at work would even detect the early versions of iOS as older versions of OS X

    there is lots of shared code between them. its not like programmers just dump all their code after a project and start fresh.

    when you think about it, Apple sells one main OS product across a few hardware packages. the feature set you get depends on the hardware package you buy it in.

  • handleym

    “This is why there needs to be one building and this is why the shape chosen is probably optimal: each point within can be reached with minimal routing. The fact that it’s aesthetically pleasing is a coincidence.”

    Hmm. Infinite Loop has the same (sort of) shape, on a substantially smaller scale of course, and that’s a total pain to navigate. It’s easy enough to get to which of the six main sections you want, and the floor, but after that all bets are off as you have this weird curvilinear structure that I, in ten years in the place, never found gelling into any sort of intuitive sense.

    I certainly hope the new building either has better support for navigation, or best of all, is well enough designed internally that such support is not necessary because it DOES actually make sense.

    It’s also worth pointing out scale. Infinite Loop, while not large, is large enough that going from one random place to another takes enough time that it’s not going to be a simple walk across the corridor. The new building looks a LOT larger, and even cutting across the center, a personal visit could take ten minutes of walking. I’m not sure that, in reality, it’s any real improvement over walking to Bandley from Infinite Loop.

    There is obviously a convenience in not having to shuffle people around frequently, and in having a nice space in which you can store all the things you want and need; but I suspect this “form follows function” theory of the building is a bridge too far.

    • HiThere

      I think you’re ignoring those of us out in the boonies. Bandley isn’t even close to the furthest “campus”.

    • neutrino23

      The problem of location might not be the shape of the building. If every floor has all the same doors, carpeting and windows then it would be easy to get lost. I recall visiting a semiconductor office some years ago. It was an enormous sea of cubicles. You needed a cubicle address and a map to find anything.

      If the different areas are allowed to gain their own personalities then it might not be so bad. I’m sure that by the time this is built employees will be able to use iPhone apps to navigate. They should also use FaceTime and collaboration apps to reduce the need for running around.

  • LRLee

    No corner offices in a ring

  • lukeb

    To further your military analogy, the Pentagon is similarly designed as a continuous loop. As a functional organization, maybe they reached the same conclusion as Apple regarding building design and organizational efficacy.

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  • GiveJobsTheBenefitOfDoubt

    Bottom Line: the Spaceship was one of Jobs more prized projects. He was a genius. He was Apple. Apple was Jobs. Despite the high price tag, I think we should give Steve the benefit of the doubt. Best case scenario: the office is a stunning success, and helps Apple to thrive going forward. Worst case: there’s $5B less cash sitting around earning less than the rate of inflation.

  • Thanks from you nice insights Asymco, like always.
    But I well remember one of Samsung’s head of sales in one EU country stating their strategy was not about price, but volume.

    Thus I read you data with a lot of attention (I’m not in mobile business, maybe far far away).

    Plus you can easily state that App marketplace is a cutthroat to industrials, even small app makers (

    I’m very curious to watch who will gain this battle, and to your nice analysis,


  • kiran bhanushali

    What would be a good resource to see the differences and advantages and disadvantages of the various org structures?

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