Apple Branches Out to High-Tech Israel
In January, U.S. electronics firm Apple confirmed its purchase of Israeli flash memory company Anobit. Apple often uses its vast cash reserves to buy small companies with interesting technology, and Apple is already using Anobit’s products for “packing more storage capacity into Macs and iOS devices at lower prices, with the same level of component reliability and longevity,” according to AppleInsider.
Why did Apple go to Israel to find this kind of chip research?
Flash memory is hugely important to Apple, and Apple is important to the global flash memory market. The basic components of flash memory are traded as commodities, and every Apple product announcement — especially if it includes a jump in device memory — causes the whole market to move. According to iSuppli, flash memory is the second most expensive part of devices like the iPad (following the screen).
Flash memory, which retains information without the need to be powered constantly, was invented in Israel by Eli Harari, a former Intel engineer who founded a company in 1988 that went on to become SanDisk. In its early history, Kodak was offered his technology but talks fell through when Kodak asked for a three-year exclusive contract. Harari preferred a competitive market and talks broke off.
But what was a former Intel engineer doing in Israel in 1988? Well, Intel first came to Israel in 1974. Yes, you read that correctly: a few months after the 1973 Yom Kippur war, Israel was the first country outside of the U.S. that Intel performed development work in. Founded in 1968, by 1971 Intel was selling the world’s first complete microprocessor on a single chip, and already in 1974 Intel realized Israel held a pool of engineering talent unrivaled in the world.
Intel was just the earliest pioneer: now Apple joins a shopping list of the top names of the high-tech world: Microsoft, Google, SAP, Cisco, and dozens of others maintain large offices in Israel. And these are not just local sales or support offices: full-scale research and development is performed on a large scale in Israel. The mayor of Tel Aviv, a city that has spawned dozens of startup companies later bought by giants, doesn’t talk about subsidies. He says:
We are creating a good place for high-tech people to live in. I am doing it for the people working in high-tech.
Buying Anobit is not the end of the story for Apple. Sources in Israel are reporting that, independent of the Anobit purchase, Apple is looking to establish their own chip research and development office. This is big news because Apple has never performed core component or product design work outside of California. Only marketing, selling, and support have happened out of the state.
One of the last major components of their own products that Apple doesn’t directly control is processor design. Their computers use Intel processors, though the mobile products use an Apple-designed chip manufactured to order by Samsung.
So what are the reasons for such a huge step? Israel has as strong a history in these technologies as anyone: Intel’s investment in 1974 shows that.
One of the little known phenomena of Israel’s permanent need for almost universal conscription is the creative use to which the brightest and best kids are put: a special program in the army, known as “Talpiot,” takes a select few from each year’s intake and grooms them in technical sciences. This elite group has gone on to produce many of Israel’s best-known technical successes. In effect, the three or more years in the army are put to extraordinary use. It’s almost incalculable what contribution this IDF program has made to Israel’s economy. Apple will tap into this just by being in Israel.
More good news from Israel! Not a surprise, but still nice to read.
One quibble – the IDF’s Talpiot program is only one of many elite units that helps transform outstanding young soldiers into outstanding resources for a high-tech economy. In the bestselling book “Startup Nation” — which sought to explain the economic miracle of Israel creating a thriving first-world economy despite an almost total lack of natural resources and near-constant state of war — Saul Singer points out that the very fact that young men and women are put into leadership positions through the army is an important contributing factor as well.
BTW, this is true not just for the super-bright kids studying electrical engineering, but for the 20-year-old commanding officers who gain real management skills by leading units of 18-year-old grunt soldiers.
Sandy, I agree, there are more positive aspects to the IDF for young people, especially prior to a college degree than just the Talpiot. In the limitied space I had I couldn’t go into this. As you mention, Startup Nation is a great book as is George Gilder’s Israel Test.
IDF honing young management talent? Oh yes! My daughter’ s being inducted tomorrow. She’s been admitted into a fast-track officer candidate program. And with good reason; at 19, she was already acting manager of a popular local bakery franchise. And now she gets 3 years of hands-on personnel management training.
Somebody has to take care of her poor old mother, after all.
No surprise really. Jews are massively successful at everything they do. So of cause a country inhabited primarily by Jews will be a massively successful country. It’s only a matter of time before Israel will be the wealthiest country i the world.
I would not want to meet you alone in a dark alley. Why am I sure from the tone of your response that you would grab me by my side curls, wrap them around my neck and choke me to death.
That was a disgusting and insulting comment. You should be ashamed of yourself.
Jews are without any contest the most successful ethnic/cultural group on the planet. Despite being only around 20 million people, Jews account for a whopping 150 Nobel prizes in medicine, economy and science. No other group is even close. That’s the truth. And exactly what is the problem with that? Are you ashamed of your own success? It is awesome and Jews should be immensely proud of it.
Take away inventions and scientific accomplishments by Jews and see what is left. Not much. Without the Jews, we would probably still live in the stone ages.
Therefore it should not come as a surprise that Israel is fast becoming a leader in technology and science.
I wrote the original remark about JL being scary. I stand by it. I am inside the Jewish community and know well that intelligence is a highly regarded trait. But to judge people by their intelligence (which is genetic and not, therefore, something which is praiseworthy) and even their accomplishments is so far off the mark as to constitute a danger to those so described. I know low-intelligence Jews who are just fine human beings and I know or am aware of Jews with exceedingly high intelligence who are inferior human beings in every other sense of the word. I must say as well that accomplishment is 50 percent (or thereabouts) chance or luck. So, if anything, Jews who succeed are persistent or in the terms of the antisemite “pushy.” From a psycholinguistic point of view, there is no positive trait than cannot be turned about into something negative and no negative trait that cannot be touted as wondrous. So, yes, high praise scares the he!! out of me. In such complex matters, then, silence is a superior response and always more accurate and less destructive than words.
Wow. I cannot imagine just what is in JL’s post that would prompt such a response from anyone other than an antisemitic, bigoted prick.
You can’t imagine? What’s the flip side of saying Jews are massively successful? Once you establish such an argument as having a credible baseline, can’t one say Jews are this and that, positive or negative with both having equal credibility. The comment got the sarcastic reply it deserved.
Then JL make the same basic mistake and points out the few-Jews-huge-influence remark. Trouble with that is, when someone else says it, then they’re a bigot who posits a Jewish conspiracy and the argument in response is that Jews don’t have the numbers to do anything like that – but you’re saying they do.
What’s good for the goose is good for the gander and JL’s remarks are a double edged sword of stupid and unwitting bigotry.
What Jerry said to JL was over the top & devoid of any counter argument. That you would defend such a remark is almost as dumbfounding as the remark itself.
I think that this was a case of mutual misunderstanding.
I think that Jerry, if he is Jewish, which I think that, probably, he is, misinterpreted what JL’s feelings and intentions were, and I think that Jerry jumped the gun (as a result of being in a state of distress).
I think that JL meant well, but I think that JL didn’t understand the situation that those of us who are Jewish are in (how would it be that JL would understand it? – most Jewish people don’t express it, and almost no Jewish people express it clearly or fully), and I think that JL didn’t understand how very many of those of us who are Jewish feel as a result of Jewish people being in the situation that Jewish people are in (how would it be that JL would understand it? almost no Jewish people express it), and I think that, as a result of that, JL didn’t understand why Jerry would react the way that he did.
Are you saying ISMW that JL’s remarks encompass what Jews don’t usually express or are you saying that his remarks do not reflect what most Jews think of themselves but do not express?
bobcat,
Those of us who are Jewish are in a distressing difficult situation. I don’t have the wherewithal right now to describe and explain the situation that those of us who are Jewish are in and how, as part of the situation that I’m in as a result of being in the situation that those of us who are Jewish are in, I feel as a result of those of us who are Jewish being in the situation that those of us who are Jewish are in, and how I think that other Jewish people also feel as a result of being in the situation that those of us who are Jewish are in.
I think that it’s good for those of us who are Jewish to be mindful and to be forbearing and patient and to express ourselves clearly.
I think that it’s good for us all – Jewish and non-Jewish – to be patient with each other and for us all to be kind to each other.
bobbcat,
I apologize for misspelling your name in my previous comment. I misspelled your name in my previous comment by accident, by mistake. I didn’t see that there were two “b’s” after the “o” in your name.
Daniel
I misspelled my name in the “Name” field in my previous comment by mistake, by accident.
Daniel
I just recently realized what I now realize was, I think, the sarcastic nature of the comment by Jerry, and which I think was accurately described by Saile Furman. I was sleep deprived, and stressed, when I wrote my previous comment.
I think that it’s good to be forbearing, and sincere, and to express oneself clearly – in order to avoid there occurring misunderstanding, and in order to make things better.
AFA I can tell, Jerry & Saile are assuming that JL is a bigot. Both, IMO, have overreacted to his post.
I do believe you have tried to make the point that people should take a more open-minded approach to one another. This would be especially true for exchanges in a 2-dimensional medium such as this forum, where no voice inflections are heard in order to help one assess just where another person is coming from. If there was more of that, comments such as those made by these two in response to mine & Jl’s posts would be more rarely seen.
Bobbcat, it is not a question of assuming anyone is a bigot but pointing out a language of bigotry. To me, bigotry is a language and once that language is put into play it can twist around and bite you back.
Many years ago I remember Dick Cavitt remarking how it always seemed groups of black kids were livelier and happier than white kids. Well, you don’t have to be a genius to understand this opens a Pandora’s Box that can then say black kids are noisy jitterbugs.
The same is true of saying Jews are successful simply by virtue of being Jews. The same standard is enabled and I say it is just as stupid to put people on a pedestal as in a ditch or concentration camp in this regard but make no mistake that both are being put into play. It is one thing to talk about the brightness of a value system and quite another to talk about blood as one can have a good value system without automatically triggering of a thing that is inherent and therefore unalterable; value systems come and go.
The same argument that portrays Jews as massively successful despite few numbers can be used to say Jews are massively successful at the old “Jewish conspiracy” argument so fondly used by hate groups as well. I understand people are sometimes enthusiastic and will says positive things like blacks make great music without thinking of the negative part of that mindset and “logic” but it is nevertheless inadvisable to do so. Championing a cause in the wrong way can hurt a cause. Unless one is in love with the ethnic double standards of the Left I’d just not do it.
Jerry
I wrote the original remark about JL being scary. I stand by it. I am inside the Jewish community and know well that intelligence is a highly regarded trait. But to judge people by their intelligence (which is genetic and not, therefore, something which is praiseworthy) and even their accomplishments is so far off the mark as to constitute a danger to those so described. I know low-intelligence Jews who are just fine human beings and I know or am aware of Jews with exceedingly high intelligence who are inferior human beings in every other sense of the word. I must say as well that accomplishment is 50 percent (or thereabouts) chance or luck. So, if anything, Jews who succeed are persistent or in the terms of the antisemite “pushy.” From a psycholinguistic point of view, there is no positive trait than cannot be turned about into something negative and no negative trait that cannot be touted as wondrous. So, yes, high praise scares the he!! out of me. In such complex matters, then, silence is a superior response and always more accurate and less destructive than words.
February 6, 2012 – 10:44 pm
From thread #2:
Fail Burton: Enlightening post. Your points are well taken. I appreciate it.
Jerry: You should have posted your second post as your original response to JL. Glad that you elaborated.
Don’t forget all the crap Apple has to deal with in California (even with their deals up in Sacramento) it’s no wonder they try to move more and more of their stuff elsewhere.
It is really a blessing that in the mideast Israel was without natural resources and had to develop an innovative tech economy to survive. The oil rich nations will have nothing when that market dries up.
Israel’s enemies have helped a great deal. Israel had no choice but to maintain a conscript army and large numbers of reserves which, as has been pointed out, has been critical in its economic development. Also because they are outnumbered Israel has had to rely on technological superiority to maintain its edge, which spins off into the regular economy.
The boycotters fail because most of what Israel exports is bundled into other products such as software or cell phones so the economy is relativly immune from boycotts. Because of its regional isolation it parters with large multinationals to grow. This is another way Israels enemies have actually made it stronger.
When life hands you potatos, make potato latkes.
Happy to see you posting here Brian. I have been following Isreallycool for years.
The descriptions of the Land of Israel in the Torah—especially, but not only, Parshas Eikev (Deut. 8:7-10)—describes the variety of the Land. Unlike ancient Egypt, which was wholly dependent on the Nile, the Land of Israel has widely varied topography, springs, rivers, lakes, desert, minerals, coastline, forest. In other words, the room to develop multiple skills and a highly variant economy was a blessing upon the Land when contrasted with the one-note economies of richer neighboring lands in ancient times, no less than today.
“But what was a former Intel engineer doing in Israel in 1988? Well, Intel first came to Israel in 1974.”
There’s a good reason Israel was Intel’s first off-shore R&D post: Many of the innovations that first put Intel on the high-tech map were created by ex-pat Israeli engineers. Gilder tells some of this story in “The Israel Test”. He writes of Dov Frohman, “an Israeli studying at Berkeley” who help Intel resolve problems with their early DRAM chips, then went on to create the EPROM. Then with help from Xicor – started by yet another Israeli, Raffi Klein – EPROM became Flash. It was Frohman who pushed Intel to set up a development center in Israel and who helped train the next generation of electronic wizards there. The Intel Core architecture, used in most of today’s PCs (and Macs) was developed by Intel’s engineers in Israel.
Apple, Microsoft, Intel and Google are hardly the only US big names doing work in Israel. So is Cisco. And Texas Instruments. And General Electric. And Johnson&Johnson. So yeah, feel free to boycott anything with Israeli content. It won’t be much of a life. And should you have the misfortune of needing emergency care, tell the folks in the ambulance you’re boycotting Israeli goods. That means no “Israeli bandage”, no Israeli-made monitors, no Israel-developed drugs or stents, no Israel-developed diagnostic tools, etc.
As to Apple’s reticence in setting up an Israel center, I don’t know how much Jobs’ wife had to do with it. After all, no development outside of that associated with manufacturing was done *anywhere* outside of California. But why no Apple Store? Why no mention of Israel when Apple lays out their iPhone rollout schedule? There’s only iDigital (owned by the son of Labor icon and peacenik Shimon Peres). In contrast, Microsoft made an early investment in Israel and has one of their largest overseas development centers there. Not surprisingly, Israel is very much a large “Windows shop”. (As a Mac user I hardly hold that to Israel’s credit.)
Thank you Raymond! I met George Gilder some years ago and purchased his book on my (then brand new) Kindle in front of him. The Kindle, of course, uses an e-ink screen created in Israel. The only downside was he didn’t have anywhere to sign it but I didn’t have to lug a hardback all the way home to Israel.
I think it’s fair to say that no major multinational tech company isn’t represented here. Apple was, till now, conspicuous by it’s absence.
I’m in a similar business to iDigital (without the retail side) importing Windows machines (though I’m hard core Mac only!) and I can’t fully understand Apple’s lack of desire to take the Israeli market and really do it properly. The demand is here and iDigital has kept the market small for no good reason. My short piece about Job’s wife’s political leanings is fairly speculative, but I have heard it from a few directions over a number of years.
Reason #1,237 why the complaint about “Israel is the cause of most of America’s problems” is so vacuous, it should be summarily laughed at.
True story:
My first job out of college many moons ago was playing a very small part in refurbishing the McDonnell Douglas F-15 Strike Eagle. I happened to be put under one of the designers and lead engineers of the original design team.
As a young, dumb lad, I was soaking up every story this wonderfully brilliant, grizzled old bear of a man with a foul mouth was relaying to each of us about the history of the project. The question of our sales to Israel of the F-15 came up in conversation from another young punk who didn’t agree with arm sales to our allies – especially Israel.
The old man looked at the newly minted engineer and said, “See this plane here, son? Some of the finest engineering on the planet. I built the damn things and sent them to Israel some years back. The smart, little bastards took our plane, modified it, sent some suggestions back for improvement, and we implemented every damn one of their ideas as standard practice. So instead of criticizing the little bastards you ought to be thanking your maker their working for us.”
With tail between legs, the punk slinked to the back of the pack, nary another word.
http://vimeo.com/9296899
http://www.iaf.org.il/1478-23715-en/IAF.aspx
Yes. The Israelis have this annoying habit of taking the fighters that we sell them, replacing the electronics with better stuff, and then selling the upgrades back to us. Their anti-missile systems are pretty good too.
Here’s another word: try modifying nothing. Then look up the word “obvious.”
Love this article. Did not know that flash memory was invented in Israel. Far superior to spinning-plate hard disks; it’s green, too. Kodak passed up a golden opportunity, R.I.P. Also fascinating is the possible influence Jobs’ wife had. Is this pure speculation or is there evidence? Either way, sure seems likely to me. The contrast between small-business operations in NY vs Israel is also a tale that needs to be told over and over until the the voters finally figure it out. Bravo.
Thanks for your comments. I do want to write more about comparative business ownership in the US and Israel (and the UK to some extent but my knowledge there is growing rusty). I did have employees in the US till I was effectively forced to fire them because I couldn’t get a business visa for myself.
VAT is the next subject I want to tackle for PJM! It’s not understood from a business owner’s perspective in the US I feel.
The stuff about Job’s wife is pretty speculative, but I’ve heard it from a few directions over a number of years.
Brian,
is it possible to start a business in Israel while living in the US as a US citizen? Any sources or information on this would be interesting. Thanks in advance.
http://www.israeleconomicmission.com/
http://www.globes.co.il/serveen/globes/nodeview.asp?fid=942
Menachem,
Thank you very much for those two links. Advice request: as a non-religious Jew who is unable to do Aliyah (family reasons) can you suggest ways to get involved with Israel and Israelis? This is something that I have been struggling with for some time now and perhaps you have a suggestion. Again, thanks in advance.
Menachem,
awesome response and well worded. I will try to take your advice. Just getting in a plane and going is not an option due to substantial family obligations. It’s rather frustrating as 20 plus years ago I wanted to join the military and was thinking how cool it would be to join the IDF but I chose to serve the country I was born in and wound up driving a tank in desert storm.
Can you be more specific about what kind(s) of involvement you are seeking?
Perhaps ” allbusiness ” is an inappropriate name? Perhaps what you are experiencing is a spiritual longing to connect with your own roots? In any case I would make two suggestions- first join a Beit Knesset where you live. Not a ” temple ” or ” jewish center ” but a real traditional synagogue. You don’t have to be ” orthodox ” , you will be made to feel quite welcome. My other suggestion is to come to Israel to visit. It is an amazing country. If finances are a concern join the El Al frequent flyer club. It costs $25 for a lifetime membership and they will email you special rates as they become available ( no I don’t work for El Al ). The flights are long , crowded and the food miserable., but the pilots are the best in the sky and security is the finest in the world. Bring a sandwich, take a sleeping pill, and wake up at home. Good luck !
I am really open to any ideas. I am a family man but like I have said I have had this in me for a long time. I guess it starts with correspondance and goes from there.
I was going to respond to your post on tuaw, but deleted it seeing as you got one thumbs down already, I fear that site will just mod me down with yours, not that I care for such petty nonsense.
But, I did want to know more about your hypothesis regarding his wife. Steve was a very stubborn man and I find it hard to believe he would even allow his wife to change his mind of business practices. Not politics withstanding, Steve saw things with dollar signs. (or the shaq symbol if you will) Anyhoo, iPhones are immensely popular in Israel and I find it hard to believe there isn’t an Apple Store yet. I don’t know how much of that was because of his wife, or Tim Cook now being more proactive about it. Apples extremely high VAT does often make buying such products almost cost prohibitive, in fact I seen cars in Israel with manual rear windows/powered front because it would lower the VAT!
I do hope Hebrew support greatly improves, and I do hope Apple Israel becomes a hugely successful reality, so well written article mate!
Technology is a major natural resource of Israel. The Silicon Wadi is proof.
It is sad to see Apple sell out and choose to do business in the Apartheid State of Israel.
The poison that is the foundation of the modern Israeli state has birthed much poisoned fruit and will continue to. Ask the innocent citizens of southern Lebanon whose farms and orchards are still coated with the cluster munitions Israel’s “Defense Forces” intentionally paved that area with. The same IDF that has conveniently planted missiles into Red Cross Ambulances (bullseye on the cross) and shot clearly marked UN observers in their clearly marked posts. The same Israel that has built it’s own Berlin Wall and created a separate and unequal society for a group of “others”. The same Israel that endlessly meddles in US politics
Anyone who describes Israel as “an apartheid state” clearly doesn’t understand what apartheid was, or what Israeli society is like.
I could explain it, but there’s no point because I know who posts stuff like this.
Someone out to pin a “racist” label on Israel, just like the Left pins a “racist” label on anyone else who gets in their way.
I imagine then that you possess nothing Made in China, then. Their industry is literally producing “poisoned fruit” with all the effluent polluting their environment. I could go on about an “Apartheid” society in which the Han majority intentionally limits opportunities for the Tibetian and Uighur minorities of the interior or keeps lowly countryside migrants from permanently settling in the cities by the Hukou system of residency permitting. Or I could call them a menace and threat to neighboring states because of their expansionist territorial claims. But I won’t…
I don’t think the term “Apartheid” can be used in regard to Israel; having said that, there is undoubtedly a Jim Crow-lite in play within Israel; people who argue otherwise are not enabling tools of self-criticism and fair play they point at others.
I agree there is a double standard where the products of other countries are not boycotted when those of Israel are. However the close relationship with the West that benefits Israel is some ways also acts to its detriment because of increased media interest that simply doesn’t exist for a place like China or Turkey and its Kurds. This doesn’t excuse an entity like the U.N. magnifying the wrongs of Israel since the U.N. view has easy access to the whole world.
You win some you lose some.
DAG, I mean JAG, as in JAGOFF.
Apple was fine when they were pro-palestinian leaning, right? you don’t have the guts to describe yourself truthfully here. Do it, and i will have an answer to why you are such a JAGoff. Go off yourself.
DAG just took a wrong turn and ended up here instead of the Huff Post. Chances are he has more than one product which is at least partially Israel derived. If he had any integrity he would throw out that iPad in protest, but he won’t. Like those anti corporate occupy kids tweeting out messages on their Droids and Iphones in their Nikes and Abercrombie jackets.
I always make it a point to buy something Israeli or donate to an Israeli cause when I see a hateful post like this.
There we go. Friends of the IDF thanks you DAG
One thing that seems to never be said in defense of Israel’s legitimacy (except for a speech by Netanyahu) is that the disappearance of Israel would leave a huge hole in modern civilization’s ability to progress forward. Israel is one of the most dynamic and creating nations on Earth, and is so on all fronts: scientific, technical, cultural, and intellectual. And it is all this despite its tiny size and the need to expend so much of its national energy insuring its very survival.
We shouldn’t even need to cite the fraudulent “Palestinian” “History,” or even Biblical justifications. Israel’s outsized contributions to human progress and advancement — especially when contrasted with the almost total uselessness of most of its neighbors who are also a drag on the world, frequently depraved, and a frequent menace to boot — are reason enough for why it is vital to ensure Israel’s survival.
“Bozo the Modifier” would be a more apt name front and back for this inadvisable post. And again, there’s that use of “outsized.” Do you ever think your thoughts through to their logical conclusion? That rarely happens when prejudice is in play that pretends to be reason and logic in the first place. Why think?