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Apple Opening Israel Development Center, First Outside US

December 14, 2011

For the second day in a row, Apple is making hi-tech headlines in Israel. On Tuesday, a report said that Apple was considering spending up to $500 million on Israeli flash memory startup Anobit – and on Wednesday, Globes reported that Apple is planning to open a development center in Israel, its first outside the U.S.

By doing so, Apple will finally be joining other global tech leaders who have, for years, had large development centers in Israel. Microsoft has nearly 1,000 people working on RD in Israel – and its teams here have come up with some important innovations, such as the networking technology at the center of every version of Windows for the past decade. Google has not one, but two development centers in Israel – the only country in the world outside the U.S. so honored. Much of Intel’s laptop technology was developed at its two RD centers in Israel. And Motorola – which first set up shop in Israel in 1964 – Cisco, IBM, Oracle, and many others have been here for decades.

Apple currently has only one development center, at is Cupertino, California headquarters. Often, when foreign tech companies acquire Israeli companies, they convert the local office of the startup they’ve bought into a “development center” – as, for example, CAD software giant Autodesk did last year when it acquired Israel’s PlanPlatform – but according to Globes, Apple had made the decision to set up an Israeli development center even before beginning talks with Anobit on its possible acquisition,

According to the report, Apple has hired Aharon Aharon, currently Chairman of the Board of Camero, located outside of Netanya. Aharon is a veteran of IBM and in the past ran the Israel design center for Zoran (now CSR). Camero specializes in Radio Frequency (RF) based imaging systems, and is known for its through wall imaging systems have become the solution of choice for top military and law enforcement agencies throughout the world, according to the company.

For a major hi-tech company, Apple has invested very little in development – as little as 2% of its total sales, considered a very small percentage in the hi-tech world. The vast majority of Apple staff engage in sales and support. Apple is said to have some $80 billion in the bank, and has been shopping around for ways to invest and grow their business, according to Silicon Valley insiders. Many of Apple’s products are manufactured in China, but its main support centers are in the U.S. Several years ago Apple planned to open a tech support center in India, but the plan was scrapped for various reasons.

There was no word on when the Apple development center would open, but Aharon will reportedly be traveling to California where he will learn firsthand about the “Apple Way” before opening and managing the center here. Apple corporate VP RD Ed Frank is currently visiting Israel, said to be exploring options for the development center. Frank’s specialty is semiconductors, and he has worked at several senior positions at Broadcom, another multinational with Israeli roots. By seeking to open a development center in Israel, Apple is joining what has become a tradition among multinational tech companies – picking up some of their best ideas in Israel and bringing them to the rest of the world.

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