Apple takes a bite out of Israel’s high tech scene, dumping billions into the country
The technology giant has quietly created a hardware development center in Israel, where engineers are crafting top-secret future products; it has so far invested $1.2 billion in Israel and continue to eagerly recruit new Israeli employees.
The conference room where Johny Srouji meets us overlooks the landscape of the hi-tech buildings of Herzliya Pituach. Laid out on the white table, as if in an intricate military ceremony, are the most glittering gadgets Apple released last year: iPhone 6s, iPhone 6s Plus, iPad Pro and the new MacBook computer – aligned side by side, spaced accurately.
Steve Jobs, Apple’s late founder, who was known for his obsessive zeal for aesthetics, would probably be proud. “Apple’s core values dating from Jobs’ period remain unchanged to this day,” Srouji tells us. “Value number one at Apple is to provide customers with products that enrich their lives, and the best way to do this is by using a beautiful design, the best hardware and the best software. We possess mastery over all these areas, thus providing the best experience. This is what makes us unique.”
Although Srouji, an international expert in advanced technologies, is virtually unknown in Israel, he is one of the most influential Israeli executives in the global technology industry. Last December, he was promoted to senior vice president of hardware technologies at Apple. The meaning of this title is membership in Apple’s highest administrative ranks – an honor reserved for ten people only, including the legendary super-designer Jonathan Ive and director of global marketing Philip Schiller. Besides, Srouji is also responsible for the establishment of Apple’s development center in Israel.
At the end of 2011, Apple – under the leadership of Tim Cook, who replaced Steve Jobs as CEO following his illness – secretly decided to set up a hardware development center in Israel. This was rooted in the company’s strategic decision to start independently developing hardware and chipsets for its own mobile phones, eschewing the reliance on other manufacturers that is customary in the industry. To that end, Apple had to expand its hardware engineering program and identify knowledge centers outside the United States. It was Srouji who brought Israel to the attention of Apple’s management.
“We had hardware development centers in Cupertino and Austin, and came to the conclusion that Israel has a foundation of technological expertise thanks to its many universities and startups. We saw that there was innovation, ideas and capabilities,” Srouji says in the first exclusive interview he gave to Israeli media.
“When Steve was the CEO, he greatly supported the idea of setting up a research and development center in Israel,” continues Srouji. “Tim Cook, who replaced him, is also very supportive of the center and technologies we developed in Israel. He even visited here last February, which indicates how much enthusiastic he is on the subject.”
At almost the same time as that decision, Apple made its first purchase of an Israeli start-up: Anobit, in Herzliya, which was purchased for an estimated $400 million. “We decided to purchase Anobit because we found it had the expertise and technology we wanted,” Srouji says.
The next task, and perhaps the most important one , was to find a director for the development’s center. “The first thing you need when setting up a new development center is a good manager with the necessary skills and cultural fit,” explains Srugi. Aharon Aharo, an esteemed veteran manager in the chip industry, was chosen for the prestigious post. The two knew each other well, as Aharon was Srouji’s professor at the Israel Institute of Technology. “He is a very talented person with outstanding capabilities,” says Srouji. “I knew him and his personality and knew he would suit us very well.”
Laughing with employees
And so, almost under the media’s radar, Apple began investing in Israel. The company reveals to us the first time that it has so far invested a huge sum of $1.2 billion and employs 800 locals, most of them hardware and software engineers, 400 of whom were recruited in the last two years alone. Apple also acquired two other companies for hundreds of millions of dollars, and a year ago opened a magificent office building in Herzliya Pituach, as well as a branch that occupies several floors in Haifa. It continues to eagerly recruit employees according to its evolving needs.
If the high-tech nation needed additional reinforcement to what is already said about the Israeli engineer’s mind, it received that ultimate confirmation. When a company as esteemed as Apple opens its first hardware development center in Israel, it is not only a cause for pride, but also a step of immense economic value to the Israeli economy and the high tech industry in general – certainly if Apple continues to expand its operations here in the future, as it declares explicitly.
So how is it possible that many Israelis did not even hear about Apple’s development activities in Israel? The answer is, of course, the company’s policy of secrecy, made in Steve Jobs’ image. CEO Tim Cook recently admitted in an interview with US TV show “60 Minutes” that “Apple is more secretive than the CIA”. He’s not kidding: the company has been in Israe since March 2012 and only this month gave journalists a glimpse into its inner sanctum and allowed its senior ranks to be interviewed by the Israeli media.
Apple Israel CEO Aharon Aharon, warm and unpretentious, takes us on a tour in the shiny new building in Herzliya, which seems like a product that envisioned by one of the company’s designers: the dominant colors in the corridors, offices and in the cubicles are white and clear. Scribbled diagrams and equations can be seen an some of the transparent partitions, but beyond that the working areas are arranged in perfect order, evoking almost a sterile feel. On the walls hang giant close-up photos, almost erotic, of iPhones, Apple iPads and Apple watches.
Employees sit in “neighborhoods”. “Each neighborhood has a set of four cubicles. Just like the company’s gadget designs, the cubicle design is not accidental at Apple. They were planned after a long and rigorous process, which included the establishment of mock cubicles designed to test, for example, the optimal height of the partitions that separate them – low enough to encourage collaboration, but tall enough to maintain privacy and quiet. Plants were incorporated
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