Apple to Significantly Expand Its Israel Operations

Multinational moves to expand local development team; Israeli operations rapidly increasing ever since Apple first entered country in 2011.

Apple is expanding its operations in Israel, with a massive new office space being rented in a new Herzliya project.

Apple signed a contract to lease 12,500 square meters of office space in Bayside Land Corporation’s O2 development in Herzliya Pituach’s industrial zone, according to Bayside’s quarterly financial report, released yesterday.

Construction on the building that will house Apple’s employees began last year and is expected to finish next year, with Apple slated to occupy the building next year.

Renting enough space to house 600-1,200 employees signals Apple’s intends to significantly increase its development team in Israel over the next several years. It has been expanding its Israeli operations rapidly ever since it first entered the country in late 2011, with a current estimated workforce of 400-600 employees. The workers are at three development centers that focus on storage space, processors and communications chips.

Apple is likely to merge its Ra’anana and its Herzliya offices once the new building is completed. Its third office is in Haifa.

Apple did not respond to a request for comment.

The space being rented by Apple is in the first part of the O2 development, which contains a total of 16,000 square meters of space but should eventually contain 28,000 meters of office space, 4,000 square meters for restaurants and 27,000 square meters of underground parking. Apple has an option to rent space in the second building as well, the company stated in its report.

Bayside charges an average of NIS 70-80 a meter per month in its other Herzliya Pituah industrial zone properties, according to its report. New contracts are for NIS 80 a month. This means that Apple will likely be paying the company NIS 12 million a year in rent, not including parking and management fees.

Apple entered Israel when it bought out Anobit, a startup developing flash-based storage for smart phones, tablets and media players, in December 2011. Apple laid off several dozens of Anobit’s 200 workers in Herzliya, but eventually hired new engineers to what had become its first Israeli development center. Apple next opened a processor development center, believed to employ 150 people, in Haifa’s Matam industrial zone.

“Apple apparently appreciates what’s being done in Israel,” Shlomo Gradman, chairman of Explace, the Israeli Semiconductor Club, said Tuesday.

Apple’s expansion – in terms of the number of workers it employs and new fields of development – stems from its global policy, he stated. “Apple is preparing to drop external suppliers and to control its entire production process,” he said. “This is a company that maintains its secrecy and they’re currently exposed to information going every which way. So it’s buying companies and improving its abilities in the field of microelectronics so that it can control the production process from beginning to end,” he said.

“Even though Apple has been active in Israel for only a short time, the company has been impressed by the abilities here,” said Gradman.

Ofer Vaknin