Apple Just Bought 36K Acres of Forest Land

Jokes about tree hugging and all that aside, the fact of the matter is Apple is buying 36K acres of forest land to more closely control its own paper supply line and insure that all paper comes from trees that are replanted after harvesting, protecting the ecosystem.

These days, you’d be hard pressed to find a “greener” company in tech than Apple, which is quite a marked shift from the days when we seemingly couldn’t go 3 months without hearing Greenpeace complain about all of the things Apple wasn’t doing to keep its environmental footprint as small as possible.

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Bottom line is profits for Apple...the "green" is just spin... All land (doesn't matter who owns it) used for timber harvesting is replanted judiciously...because it wouldn't be profitable *not* to replant. Apple is simply following the crowd in replanting. "Greenpeace" is hardly an authority figure on "green"... Even one of its co-founders says the organization is way off base with its man-made global warming propaganda.

Well it looks like Apple is making inroads into markets where it can neither conduct business efficiently or make any additional revenue from its effort. In effect branching out into sectors that are already mature markets in which they have no expertise and no hope of becoming a significant market player. Given this is how they are choosing to spend the huge amounts of capital that their corporation is awash in (rather than announcing a shareholder dividend program), I would suggest that Apple has peaked. These branch decisions are in my opinion substantial business errors that will result in the creation of departments/divisions of Apple that are money blackholes. Eventually, this will be apparent on the Apple balance sheets, and Apple's huge stockpile of cash will begin dwindling as they bleed money. Maybe their board of directors and management will take corrective action before the side projects get too out of control on costs and dwindling savings, or maybe Apple will continue down the same path it took in the late 80's-90's floundering the core things the company is good in favor of side-projects and initiatives that erode the brand and drag the company to the red side of the balance sheet.

You are forgetting what Apples primary market is. Do you think Apple's primary product is electronic devices?

If so, you must believe that Harley Davidson is focused on making motorcycles and that Gucci is focused on clothes.

Apple, Harley, Gucci, Beats by Dre, and the like primarily sell IMAGE. Its not hard to make Apple, Harley, Beats, and Gucci products that are as good or better at 1/2 the price, but those brands have an IMAGE.

People will buy an Apple watch or Harley or Gucci suit because they need it or its the best value for the money, but because of the image it projects. And pretending to care about the environment, even if they are just buying up some local tree farming business and slapping their name on it, doing the same-old same-old, whats important is does it raise an eyebrow to your stereotypical aging hipster liberal douche paying $7.25 for a coffee and wearing a silly hat and help bolster that image that Apple is maintaining.

So in that way, this totally makes sense, even though to those that have a clue it seems like it makes no sense whatsoever. You just have to remember how dumb and image conscious the average consumer is.

It's really not just the tree farm, but the solar panel business and the new apple-car project which I see as revealing the multi-year course that Apple's Board of Directors and CEO want to plot for the company over the next decade. The solar and apple-car projects are guaranteed to be multi-year (probably multi-decade for the apple-car) R&D cash sucking ventures that frankly have very little chance of turning a profit over the lifetime of the project for Apple Inc.

For solar:
In the current market environment, Apple simply cannot do solar and turn any profit on it. Asian based corporations have already cornered the market with decent quality solar solutions that undercut substantially on price other American corporation's competitor products. The Asian corporations appear to have subsidies and government grants, significantly less environmental regulation, and an ample supply of low cost workforce that they aren't even required by law to protect from toxic byproducts of the production process. Apple being an American corporation may qualify for a US government grant for their solar initiative, but that hasn't helped any other American corporation venturing into the solar market to overcome the other disadvantages it faces in that market given the competition. I would venture to say Apple's products must continue to be something that is constantly interactive for the vast majority of people to care about the branding over price in a purchasing decision. Solar panels and related power solutions are one time interaction systems (if they work how they are intended). I believe the branding Apple has will be rather ineffective as a consumer product (much the same way I think Apple branding wouldn't make any difference if Apple were to sell fireplaces, tires, or bicycle chains). Note when I say interact I don't just mean the device is functioning and a person is benefitting from the device being there, what I mean is the person is constantly drawn back to awareness of the device and interacting with the device as it functions.

For Cars:
The amount of R&D expense required to get a car production company from zero to functional product that is cleared by the various government regulatory entities for sale and driving on public roads is incredible. The barriers to entry in this market are extreme (much to the liking of the current manufacturers). Apple-car will obviously not be producing, as it's first model, a car for under-developed or developing nations with little regulations as has been the path of most successful car companies that have managed to break into the US car market in the past 50 years. The stepping stone model to ramping up to standards required by US regulations while making money along the way is not a method Apple would employ (in fact, that method would put an Apple product into areas where their branding was largely unknown and/or irrelevant to those starter markets while Apple was also in a position to have to sell each car at a loss just to compete with other low-cost offerings from other start-up companies who could capitalize on less overhead / more agility since there is no massive corporation / set-in-stone business culture in those competing companies). So Apple's way to the Apple-car will have to involve putting out a high end product as its first release without any opportunity for revenue or offsetting losses from that entire division until such time as the car is selling at dealerships across America and/or the world. If I recall what I read about this initiative, analysts believed it would be something like 10 years to get a product like that to market, so that alone is a huge amount of R&D with no return on a 10 year business plan.

Anyway, just figured I'd expound upon the reasoning behind the thoughts I shared in my original post.

Apple already has a shareholder dividends that were announced a few years back (2012) and we got a 7:1 stock split last year, which was phenomenal.

Paper isn't farmed sustainably around the globe, that's a false impression based on heavy regulation we have here in the US. It's also a significant reason in why it's less expensive to bring lumber in from around the globe rather than source it locally.

Apple isn't competing with the Chinese in the solar domain. Apple is *collaborating* with the largest manufacturer (and producer of the most efficient panels) in China to build out two projects that provide energy to two provinces.

Are they also going to provide sustainable paper to the legal departments of all the companies they sue for having "curved edges" and "a button below the screen", and other things that Apple clearly didn't do first but got a patent for anyway? I am pretty sure Apple generates at least 3 times as much paper use in this manner than they use on their own internally.

Ducman69 said:

You are forgetting what Apples primary market is. Do you think Apple's primary product is electronic devices?

If so, you must believe that Harley Davidson is focused on making motorcycles and that Gucci is focused on clothes.

Apple, Harley, Gucci, Beats by Dre, and the like primarily sell IMAGE. Its not hard to make Apple, Harley, Beats, and Gucci products that are as good or better at 1/2 the price, but those brands have an IMAGE.

People will buy an Apple watch or Harley or Gucci suit because they need it or its the best value for the money, but because of the image it projects. And pretending to care about the environment, even if they are just buying up some local tree farming business and slapping their name on it, doing the same-old same-old, whats important is does it raise an eyebrow to your stereotypical aging hipster liberal douche paying $7.25 for a coffee and wearing a silly hat and help bolster that image that Apple is maintaining.

So in that way, this totally makes sense, even though to those that have a clue it seems like it makes no sense whatsoever. You just have to remember how dumb and image conscious the average consumer is.

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Yup, people but an image created through marketing.

Very similar to people vote for the finely crafted image a politician "sells", or projects.

Product & competence are secondary.

Buying 36K of land is simply called a business expense, it negates that profit that they made so they pay less taxes on it. And it probably also gives them further tax discounts for the "environmental" side of things, although if you think they're using that forest for their paper supply you're gullible as all hell.

They're gonna hire the children of the forest???