Steve Jobs, Google CEO plotted ‘gentlemen’s agreement’ to keep wages down

RT
Published time: January 25, 2014

Two of the most powerful people in the technology world secretly and perhaps illegally coordinated business strategies in which they agreed not to poach each other’s employees, thereby keeping salaries low, according to emails unveiled in federal court.

Apple founder Steve Jobs and Google CEO Eric Schmidt apparently kept a secret pact to institute a “no-hire” policy in which each executive promised not to recruit each other’s workers. Yet the tech superstars are just two of the business leaders to be implicated in the wink-wink agreement, which reportedly included Google, Apple, Intel, Adobe, Intuit, and Pixar.
According to Pando Daily journalist Mark Ames, the scheme began in early 2005, when the need for Silicon Valley engineers was at an all-time high. The deal’s consequences became so pervasive that the US Department of Justice launched an antitrust investigation in 2010, which laid the groundwork for a class action lawsuit filed on behalf of more than 100,000 Silicon Valley employees who allege they were deprived of over $9 billion since 2000.

The US 9th Circuit Court of Appeals refused to throw out the class action suit over the objections of executives at Apple, Google, Intel, and Adobe. The emails in question were unsealed Tuesday by Judge Lucy Koh, the same judge who presided over the Samsung-Apple patent lawsuit.

Jobs, who died in 2011, seems to be the principal architect behind the illegal conspiracy. Yet Schmidt, according to an email from Google senior advisor Bill Campbell dated February 27, 2005, “got directly involved and firmly stopped all efforts to recruit anyone from Apple.”

Schmidt is also said to have told his Senior Vice President for Business Operation Shona Brown to only mention the pact “verbally, since I don’t want to create a paper trail over which we can be sued later.”

Google founder Sergey Brin was also strong-armed when he approached members of Apple’s Safari team about working for Google. Jobs, in an emailed quoted by Pando Daily, cited the “gentlemen’s agreement” when threatening Brin, stating: “If you hire a single one of these people that means war.”

Testifying in court, former Palm CEO Edward Colligan said Jobs enforced the no-poaching policy by threatening to hire away Palm employees, or worse.

“Mr. Jobs also suggested that if Palm did not agree to such an arrangement, Palm could face lawsuits alleging infringement of Apple’s many patents,” Colligan said.

Colligan swore he told Jobs the scheme was “likely illegal” and that Palm Inc. – a computer hardware firm eventually obtained by HP – would not be “intimidated” by a patent battle.

“If you choose the litigation route, we can respond with our own claims based on patent assets, but I don’t think litigation is the answer,” Colligan testified to telling Jobs, as quoted by Reuters.

A jury trial has been set for May 27 in San Jose, California.

Ex-White House Official Joins Group Fighting "Excessive" Online Privacy Laws

Daniel Weitzner helped write the Consumer Privacy Bill of Rights. Now privacy experts worry he'll help Facebook and Google control your data.

—By Dana Liebelson | Fri Mar. 29, 2013

As the Obama administration and tech company lobbyists chip away at the European Union's attempts to protect online privacy, a new pro-industry coalition has popped up to join the fray. Not quite two weeks ago, the Coalition for Privacy and Free Trade announced its existence. The group's senior academic adviser is Daniel Weitzner, who, less than two years ago, was working as the White House's deputy chief technology officer for internet policy.

Weitzner tells Mother Jones that he joined the coalition because he wants to strengthen privacy laws while ensuring the free flow of information. He worked for the administration from March 2011 to August 2012, leading the development of the much-lauded Consumer Privacy Bill of Rights, a blueprint that asserts Americans' right to control what happens to their online data. Marc Rotenberg, president of the Electronic Privacy Information Center, calls the document "a significant achievement" and says that "Danny deserves a fair amount of credit for it." But, he adds, "the critical question is whether it will be enacted into law." For now, its recommendations are voluntary.

Some privacy experts are concerned that Weitzner and the Coalition for Privacy and Free Trade will help companies like Facebook and Google continue to have free rein over their users' personal information. "This coalition appears to be a well-oiled campaign driven by the special interests of tech companies," says Jeffrey Chester, executive director of the Center for Digital Democracy. "The use of a former, now revolving-door, White House official is also disturbing, because it gives them influence to win major concessions." Joe McNamee, the EU advocacy coordinator at European Digital Rights, a coalition of privacy groups, notes, "There is a fundamental concern whenever high-level staff or politicians take a corporate position."

"It's true that I worked on privacy in the administration and I continue to work on privacy issues," Weitzner says. "But I believe really strongly that privacy tends to make progress when there are broad coalitions." He says he is not lobbying the Obama administration in any way.

Weitzner is currently the director and cofounder of MIT's Computer Science and Artificial Intelligence Laboratory's Decentralized Information Group. He has also worked as the policy director of the World Wide Web Consortium (which has been criticized for emphasizing voluntary regulation over privacy laws) and cofounded the Center for Democracy and Technology.

"This coalition appears to be a well-oiled campaign driven by the special interests of tech companies."

The Coalition for Privacy and Free Trade was launched on March 18 by Hogan Lovells, an international law firm that has worked with corporations like Apple, IBM, and Amazon, as well as various governments. The coalition's members include legal experts, a former EU ambassador to the United States, and Reagan-era trade representative Clayton Yeutter. Christopher Wolf, director of Hogan Lovells' privacy and information management practice group, says that the coalition is not intended to be comprised solely of tech companies, but instead, "we welcome all companies that collect, use, and transfer personal data." Wolf says the coalition is not ready to announce its members, but will soon.

The coalition plans to participate in the upcoming Transatlantic Free Trade Agreement negotiations, pushing for laws that provide privacy protections like those found in Obama's consumer privacy bill, while also making sure that "excessive" regulations don't inhibit economic growth. Earlier this month, Wolf testified before the US International Trade Commission that one of the big differences between the US and the EU proposals is that the United States still intends to rely on "self-regulation" and won't require companies to report data breaches within 24 hours.

Companies like Google, Yahoo, Facebook, Amazon, and eBay have been spending millions of dollars lobbying against the European Union's attempt to protect internet users' personal information. In January, the EU proposed requiring its member states to let users opt out of targeted advertising and web tracking (similar to what the struggling "Do Not Track" bill proposed by West Virginia Sen. Jay Rockefeller would do). It also proposed giving users the right to erase any of their personal information from the web, meaning that you could ask Facebook to stop holding on to your information even after you delete your profile (Facebook tends to hang on for dear life to your info) or, more controversially, ask Google to remove information from its search results that you plain just don't like.

It's not just tech companies that are trying to weaken the EU proposals: The Department of Commerce is also lobbying the European Parliament. "The Obama administration has been very destructive in the EU privacy discussions so far," says McNamee of European Digital Rights. "It intervened even before the draft regulation was published and put sufficient pressure on the European Commission to have entire swaths of text deleted."

McNamee thinks that the Obama administration will have better luck influencing the EU Commission through the upcoming free-trade negotiations. In a letter the Department of Commerce sent to the Center for Digital Democracy on March 12, Lawrence E. Strickling, assistant secretary for communications and information, acknowledged that discussions about the privacy regulations were taking place between the US government and European governments, but said that they "are not intended to limit the protections that the European law would provide its citizens. Our primary focus is to achieve interoperability between our systems."

Interoperability is the big, snazzy word in these discussions, but what does it mean? Weitzner explains, "I think there's a real opportunity to improve privacy standards both in the US and Europe and do so in a way that keeps the free flow of information on the internet…I want to make sure that we don't end up with a privacy law only because people think a law sounds nice." In other words, interoperability is about finding a way for different privacy frameworks to work together—be it in China or the EU—without necessarily changing the way US corporations do business.

Ben Wizner, director of the ACLU's Speech, Privacy, and Technology Project, notes this could lead to a scenario where "interoperability becomes this race to the bottom, where the weaker protections of the American system are exported to Europe and the world."

But Weitzner says some of the proposals the EU is suggesting, like the "right to be forgotten," could be "very damaging for the right to free expression around the world" because anyone could have the right to erase information from the web that makes them unhappy. He also says that the United States "has a lot of very good, strong privacy practices that US companies are held legally accountable for by the Federal Trade Commission." Wolf agrees: "Tech companies generally know their practices are subject to extreme strict scrutiny by regulators, including the FTC and state attorneys general."

Wizner concurs that the FTC has been "admirably aggressive in enforcing its mandate" but points out that "the FTC mandate is limited—they can only police outright deceit and unfairness. There is no basic privacy law that governs whether those companies can collect information, what information they can collect, and how long they can store it."

Rotenberg, who supervised Weitzner as an intern when they both worked for the Washington, DC, office of Computer Professionals for Social Responsibility, calls the concerns about the Coalition for Privacy and Free Trade "legitimate" but says that "Danny Weitzner should be working to ensure that the White House makes good on its commitment to establish privacy legislation…The fact that the president has made clear his support for stronger privacy laws is very important. I tend to be an optimist."

What’s Good for Apple is Not Good for the Country

Apple Economics: Maximizing Profit, Minimizing Employment

by MATT VIDAL

 

Apple Inc. is the largest technology company in the world, in terms of both revenue and profit. Yet, the California-based company has just 47,000 workers on its payroll in the United States.

Apple recently released a report in which it claimed responsibility for “indirectly” creating an additional 257,000 American jobs in industries that are part of its supply chain, a claim that was “disreputable,” in the words of MIT labor economist David Autor – as if Apple’s suppliers did not have any other customers. Or, as Wharton labor economist Peter Cappelli noted, as if the consumers spending their money on an iPad would not have purchased another product in its absence (see a New York Times article on debates over the report here, including comments from Autor and Cappelli).

While Apple’s claim to have created jobs for UPS and FedEx employees is questionable, however, there is some truth to the argument that Apple is responsible for the employment – and working conditions – at its key suppliers, particularly manufacturers for which Apple is the main customer. This may be the case for some Corning employees in the US (supplying glass for iPhones) and is very likely the case for, tens, perhaps hundreds of thousands of employees at Foxconn in China, which presumably has entire lines or buildings dedicated to Apple.

A recent report by political economist and accountant Karel Williams and his research team at the Centre for Research on Socio-Cultural Change at the University of Manchester looked at the Apple Business Model and its employment effects. They cite a study which found that Chinese workers add $6.50 in value to each iPhone 3, just 3.6% of the phone’s shipping price.

In a counter-factual exercise based on the average wage for electronics workers in the US ($21 per hour) and assuming 8 hours labor per phone, the CRESC team shows that Apple could assemble the phone in the US and still make a gross margin of $293 per phone, which is down from its current gross margin of $452, but still an impressive 46.5% margin.

Assembling the phone in the US would have added benefits for the US economy in terms of direct job creation and multiplier effects – in contrast to the current business model, which decreases US employment and increases the US trade deficit. But healthy profits are not enough, so Apple continues to make superprofits to the detriment of the US economy. What is good for Apple is not good for the US.

But what about Chinese workers? The CRESC team analyzes the financial aspects of the Apple supply chain and argues that, unlike in the Japanese and Korean cases, Chinese suppliers under the Apple model do not have good prospects of moving up the supply chain. Japanese and Korean producers originally had competitive advantage in the international market because their domestic supply chains had a low ratio of labor’s share of value-added. In the context of national supply chains, even suppliers were able to continually upgrade to higher-value added locations in the supply chain.

The story for China is different because it remains at the end of a global supply chain dominated by US firms like Apple, which are able to successfully subordinate their Chinese suppliers through contracts that leave little profit for the latter. As a result, funds for reinvestment are limited and corporate strategy may thus remain defensive.

There is a question, which the CRESC team does not consider, of whether the Chinese suppliers will be able to develop their own R&D capabilities from their own manufacturing operations. For now, most electronics R&D remains firmly embedded in the US, Japan and Korea. But there does remain an open question of whether R&D and manufacturing can remain geographically separate, with the former retaining vibrancy and the latter subordinated to the second- or third-tier via contract. Nonetheless, the CRESC report does crystallize some important questions and provide some provocative answers.

Finally, it must be noted that it is somewhat misleading to call this the Apple business model. The business model of maximizing profit and minimizing domestic employment though global subcontracting was pioneered by many corporations in the 1970s and even earlier, among them Nike, which has always been a brand without its own manufacturing capabilities.

But this model has become a normative business logic among manufacturers since then, and it does, as the CRESC team points out, present fundamental employment problems for home countries of corporations, like Apple, Nike and many others, who take it to its extreme. What was good for GM may have been good for the US, but that was another time, when vertical integration was a normative logic of business.

In contemporary globalized capitalism, maximizing profit is often equated with minimizing (domestic) employment. Is it time yet to get over our collective obsession with sanctifying profit?

Apple Has Destroyed 490,000 American Jobs

Eric Platt and Ben Duronio | May 1, 2012 - Business Insider

After taking heat for shipping jobs to China and contracting to employers with questionable labor conditions, Apple (rather publicly) took credit for creating more than half a million jobs in the U.S.

514,000 to be exact.


That figure included nearly 50,000 employees in its retail network and its corporate headquarters, where products are designed.

But it also included FedEx and UPS employees who deliver its products and employees at Corning who make glass for iPads and iPhones.

So Apple basically counts anyone vaguely associated with the company or its products as a job that Apple created.

But what about the competitors Apple has bumped off in its relentless move to the top? What about the once-profitable markets, products, and companies it has destroyed? What happened to those jobs?

Business Insider analyzed data on Bloomberg, went through dozens of 10-Ks, and read through layoff announcements to see how Apple's peers have done.

What we found:

Apple has destroyed nearly as many jobs as it helped create, eliminating some 490,570 positions.

Click here to see the jobs that Apple has destroyed >

So even if Apple had created all the jobs it takes credit for creating, its chest-thumping would be misplaced, to say the least.

The truth, of course, is it is not "companies" or "entrepreneurs" who create jobs--it is healthy economic ecosystems that create jobs. (If Apple's customers couldn't afford to buy Apple's products, Apple wouldn't create a single job, no matter how cool Apple's products were). Companies are an important element of those ecosystems, but to credit them for job-creation is to give them a lot more credit than they deserve.

But that's another story.

For now, let's take a detailed look at all the jobs Apple has destroyed or helped destroy.

Here's our methodology:

Business Insider identified some 50 companies that Apple's success has impacted, including big names like IBM and HP, and smaller ones like Barnes & Noble and Adobe.

Some companies and peers prospered. Most did not, announcing a combined 306,606 layoffs over the past several years.

In choosing the companies, Business Insider took a liberal approach to the businesses hit by Apple. Could you attribute all of Circuit City's problems to Apple? Probably not. BI used similar definitions as Apple to identify these companies.

Apple was unresponsive to repeated request for comment.

Those layoffs include direct competitors like Cisco's flip camera business, which the company shuttered after poor sales, and companies like AOL,  which lose out on lucrative search traffic because of Apple's choice to default to Google.

We also looked at Apple's decision to contract to private companies like UPS and FedEx instead of using public services like the U.S. Postal Service, as well as loopholes it uses in U.S. tax law to save billions of dollars a year.

The figure above does not include the jobs Apple could have created had it manufactured its products in America — instead of at Foxconn plants in China — because the corporate mantra to cut costs and build products overseas is not simply tied to the Cupertino, Calif., based company.

Business Insider also considered the ripple effect of layoffs in the U.S. When a company fires hundreds of employees, it curtails regional spending, causing restaurants and retailers to close their doors, decreases tax collection at the state, local, and federal level, and can trigger other rounds of layoffs elsewhere in the economy.

Using data from the Economic Policy Institute, coupled with average pay in industries that saw lay offs because of Apple's success, Business Insider estimated the additional loss to the employment picture at some 180,000 jobs.

Taking that into account with the 306,000 layoffs from competitors, Apple has destroyed some 490,570 positions in the U.S.

Circuit City Layoffs: 42,974 

At its peak, Circuit City employed more than 42,000 people in its stores and corporate offices, offering the only real competing electronics network to Best Buy. But as Apple took greater share of the PC market, and had sustainable margins, Circuit City had difficulty keeping up. Add in the collapse of LCD TV prices and by the holiday season in 2008, Circuit City filed for bankruptcy and laid off its staff.

Source: Bloomberg and Company Filings

Federal Government Layoffs: 42,105

One of the biggest revelations from the recent New York Times piece was the amount of money Apple saved by using tax loop-holes. Sullivan estimated that number at $2.4 billion in 2011 (Federal Taxes). Divide that by the average rate of pay for public employees in 2011 and you get to some 42,000 lost jobs.

Source: Economic Analysis by former Treasury economist Martin Sullivan 

Kodak Layoffs: 28,000

Kodak has had problems for a number of years - with total employment declining from more than 100,000 to just 17,100 today. The iPhone and other mobile devices have eliminated the demand for stand alone cameras, and Kodak was a company that suffered greatly from the link between cameras and phones. The 131-year-old company filed for bankruptcy in January. 

Source: Company Filings

Hewlett Packard Layoffs: 16,995

The iPad has made what was once a dominant PC builder an afterthought. HP attempted to enter the tablet game, but their touchpad was a disaster and they have laid off thousands of employees over the past few years (especially after costly purchases like Compaq).

Source: Bloomberg

Motorola Layoffs: 16,474

Motorola has had a painful decade after the success of its Razr - only recently regaining some strength in mobile. But after the Razr fizzled, Motorola hemorrhaged money, as well as headcount, as it tried to create a product that could compete with the iPhone.

Source: Company Filings

Borders Layoffs: 16,600
Apple hardware made a number of businesses obsolete: including the need to buy physical copies of books, movies and music. Borders went bankrupt after consumers moved to digital downloads and streaming online, all fueled by Apple.
Source: Company Filings

Sprint Layoffs: 14,600
Sprint struggled to gain post-paid subscribers for years because it did not offer a device comparable to the iPhone. After AT&T and Verizon exclusivity deals finally expired, it gained the iPhone and saw some growth in subscribers.
Source: Bloomberg

IBM Layoffs: 12,668
IBM conducted a number of layoffs over the past several years, including several thousand people in research in development roles and those in certain hardware businesses that it could not compete in - on the consumer side, that was fueled by gains at companies like Apple.
Source: Bloomberg

Musical Group Layoffs: 12,500
Performing art and spectator sport employment declined from a peak of 415,000 in 2007, to a preliminary estimate of 402,500 in March of 2012. The music industry has faced substantive difficulty since Napster hit (and continues with the lower share groups are paid on iTunes), making it harder for music groups to sign with a label and get backing.
Source: Bureau of Labor Statistics (ID: CES7071100001)

Ericsson Layoffs: 10,690
GlassdoorIn the 1990's Ericsson actually had abot 35 percent of the cell phone market. Needless to say, they did not keep up with the technology to compete with Apple and the rest.
Source: Bloomberg

U.S. Postal Service Layoffs: 10,615
Apple attributed part of its 514,000 job creation figure to shipping giants UPS and FedEx. But the truth is, it just moved the needle away from the U.S. Postal Service by using the private providers. According to Bloomberg estimates, Amazon accounts for 1.9 percent of big brown's revenue. Using that as a reference point, and the fact that Apple revenues are more than twice Amazon's, Business Insider constructed the number of jobs Apple could have sustained if it shipped its products through the USPS.
Source: Business Insider Estimate 

Barnes & Noble Layoffs: 9,000
The Nook has kept Barnes & Noble around as competitors like Borders failed, but its core business remains significantly challenged as Apple's products have moved consumers away from traditional physical units. BKS has closed a number of stores and employs 9,000 fewer people today than it did in 2007.
Source: Company Filings

Blockbuster Layoffs: 7,200
Streaming services have butchered the DVD and VHS business, and Blue Ray has not been the boon many industry analysts thought it would. Since 2007, Blockbuster has laid off more than 20,000 employees. BI attributed a third of those who lost their jobs to Apple.
Source: Company Filings

CompUSA Layoffs: 6,300
It's a repeat of Circuit City, just on a smaller scale. The computer superstore withered in the face of intense electronic retail competition and closed 126 stores, as Apple prospered and gained share.
Source: Business Insider Estimate

Sony Layoffs: 6,000
Sony once held a dominant market position in the portable music business with the Sony Walkman and other entertainment devices. The iPod made the Walkman the new 8-track player, and Apple has pressured Sony in the laptop market as well with the iPad and its Mac lineup. (These figures do not include mobile layoffs, attributed to Ericsson).
Source: Bloomberg

RadioShack Layoffs: 6,000
This retailer has faced significant challenges over the past few years as its main wireless offerings (Sprint, T-Mobile) did not sell the iPhone. RadioShack did have AT&T, and recently switched T-Mobile for Verizon Wireless. Still, its shelves are purgatory for HDMI cables and old electronics Apple seems to have made obsolete.
Source: Company Filings

Microsoft Layoffs: 5,827
Microsoft has struggled in the ancillary businesses Apple is prospering in, such as mobile, portable music, and the tablet industry. These struggles forced the software juggernaut to make cuts over the past few years.
Source: Bloomberg

Yahoo! Layoffs: 5,780
Yahoo! has struggled over the years as it has been outmoded by Google. So why is Apple to blame? The default search engine on all of Apple's products are Google, which gives the search giant a nice leg up.
Source: Bloomberg

Xerox Layoffs: 5,400
Xerox has laid off thousands of employees as its printer business steadily declined. Part of that has to do with difficulty within both the PC and inkjet sectors — industries you don't need when you use a Mac. The Xerox layoffs are based on total company announced firings, multiplied by the company's long-term asset base in the U.S. as a percent of global operations (to exclude impact to its international offices).
Source: Bloomberg

AMD Layoffs: 4,460
Apple uses intel chips in their Mac computers, which means AMD misses out on a huge potential market.
Source: Bloomberg

Best Buy Layoffs: 3,400
With Apple retail stores opening (and intense competition from Amazon) Best Buy has struggled to turn weak comparable store sales around. The company recently announced 400 layoffs in corporate as well as the closing of 50 stores.
Source: Company Filings, Business Insider Estimate

Tower Records Layoffs: 3,000
Apple's assault on the music industry hit retailers particularly hard, with stateside closings of Virgin, HMV and Sam Goody. The iPod greatly accelerated the losses of record stores as consumers switched to digital downloads (whether legal or through sites like Napster and LimeWire).
Source: New Reports

Trans World Entertainment (Sam Goody, F.Y.E.) Layoffs: 2,900
Tower Records part two. Trans World, the owner of chain stores including Coconuts, Sam Goody, and Record Town, has closed hundreds of stores and laid off thousands. Blame the iPod.
Source: Company Filings

Gateway (Acer) Layoffs: 2,500
Gateway once ran quite the successful retail chain, but a crowded environment made its PCs seem outmoded and overly expensive. Gateway ultimately closed its entire 188-store division, invested in eMachines and was then bought out by Acer during a period of consolidation. Apple did not have the same problem with its growing Mac business.
Source: News Reports

EMI Layoffs: 2,000
EMI is another record label drastically hurt by the world's move away from CDs. As the big five record companies became four, and now three, EMI had to layoff thousands and cut costs. Universal Music Group purchased EMI as greater consolidation became necessary to eek out some profits from online sales. Apple's role in the shift to digital (even as it offers a new revenue source) is pretty clear.
Source: News Reports

Lenovo Layoffs: 2,000
Lenovo was on the up when it purchased the ThinkPad unit from IBM with the goal to turn it into a dominant PC player. Unfortunately, PC sales were challenged during the recession, even as consumers scooped up Apple's Mac line up. Lenovo announced more than 2,000 layoffs to prop up margins (not included in figures for IBM).
Source: Bloomberg

Adobe Layoffs: 1,950
Adobe's issues with Apple are well documented. The company started a viral campaign to convince Apple to put Flash in its mobile devices. But Steve Jobs didn't warm to that approach, firing off a memo on his thoughts of Adobe (not too flattering). Adobe ultimately had to layoff some 1,950 as it focused on core operations and curtailed special projects.
Source: Bloomberg

T-Mobile Layoffs: 1,900
T-Mobile has lost share without having the iPhone in its device lineup, a sore point for the company that pinned its hopes on joining forces with the carrier that first offered it. But with the FCC blocking the AT&T merger, T-Mobile has had to pare back its operations to invest in 4G technology.
Source: Bloomberg

EMC Layoffs: 1,476
The very profitable cloud computing company has had to issue job cuts after competitors gained share in the market it helped create. Those competitors, like DropBox, have leveraged Apple's iOS platform and taken share through strong offerings on the iPad and iPhone.
Source: Company Filings

Palm Layoffs: 1,247
Palm hoped that the Pre and Pixi smartphones could compete with the iPhone and that it could offer some semblance of a comeback. After first sales looked promising, the products withered as Apple (and Android), continued to grow. Palm was then purchased by HP, before the company decided to shutter the whole unit. (Palm layoffs not included in HP figures).
Source: Company Filings

Virgin Megastores Layoffs: 1,060
Virgin Megastores had a surprisingly profitable run, with giant stores in Times Square generating healthy margins. But when digital sales decimated book, movie and music sales, Virgin decided to cut its losses and sell off its coveted real estate holdings which housed the Megastores.
Source: News Reports

Dell Layoffs: 905
Against Apple's strong gains with its Mac computers, Dell has seemed staid. The company has difficulty competing with Apple's premium offerings, and when demand for its PCs slumped, it saw margins substantively pressured. Dell has yet to find a way to successfully compete with any of Apple's other products — including mobile, mp3 players, and tablets.
Source: Bloomberg

AOL Layoffs: 800 
AOL was supposed to be the darling of the Internet age, until it wasn't. Torn up by larger competitors like Google, AOL has forged ahead with a push into content. But what the company used to bet on, search, is stymied by Apple's choice to default to Google on its iPad, iPhone and MacBook lines.
Source: Bloomberg 

Cisco Layoffs: 500
Networking giant Cisco has tried to push into the consumer sphere for sometime, and it thought it had a hit with the well priced flip camera business. But the camera never took off as consumers defaulted to their iPhones to take photos. Cisco ended up closing the business and laying off the employees in the division.
Source: Bloomberg

Warner Music Group Layoffs: 300
Warner Music Group is yet another music company hit by the move to digital and purchases on iTunes (you could argue that it performed better than most of the industry during the transition). Warner was forced to lay off 300 employees as revenues struggled.
Source: Company Filings

Hasbro Layoffs: 200
Who needs board games when you can use an iPad or iPhone to entertain yourself? Hasbro decided to close its board-game manufacturing plant in Massachusetts after demand dried up. You can blame that on the success of games like Words With Friends on your iPhone.
Source: Bloomberg

IAC (Ask.com) Layoffs: 170
Ask.com was once a powerhouse in search (depending on how you define powerhouse) but as the iPhone and iPad grew mobile search, Ask lost out. The company decided to axe some 170 employees over two different periods as it gave up on the product.
Source: Bloomberg

Universal Music Group Layoffs: 110
Universal, much like Warner, is one of the three main remaining music companies. The company has laid off some 110 employees as traditional CD sales tumbled. Recording companies have been upset with Apple's pricing strategy for some time, but that has lessened as Apple changed it's $0.99 per song requirement.
Source: News Reports

Apple overtakes Microsoft as biggest tech company

So, with less than 10% of the personal computer market and propelled solely by their device market (iPod, iPhone, iPad), Apple overtakes the 'Soft. Jobs bitchslaps Gates. They migrated to the X86 chip for their Macintoshes, so now all PCs are based on the IBM model, but those devices are what everyone wants, huh?

***

Apple overtakes Microsoft as biggest tech company
By Bill Rigby

SEATTLE (Reuters) - Apple Inc shot past Microsoft Corp as the world's biggest tech company based on market value on Wednesday, the latest milestone in the resurgence of the maker of the iPhone, which nearly went out of business in the 1990s.

Apple's shares rose as much 2.8 percent on Nasdaq on Wednesday, as Microsoft shares floundered, briefly pushing its market value above $229 billion, ahead of its longtime rival.

Both stocks ended down after a late-day sell-off, but Apple emerged ahead with a market value of about $222 billion, compared with Microsoft's $219 billion, according to Reuters data.

Apple shares closed down 0.4 percent at $244.11 on Nasdaq, while Microsoft fell 4 percent to a seven-month low of $25.01.

Shares of Apple are worth more than 10 times what they were 10 years ago, as it has profited from revolutionizing consumer electronics with its stylish, easy to use products such as the iPod, iPhone and MacBook laptops.

The last time Apple had a higher market value than Microsoft was December 19, 1989, according to Thomson Reuters Datastream.

Microsoft, whose operating system runs on more than 90 percent of the world's personal computers, has not been able to match growth rates from its hey-day 1990s. Its stock is down 20 percent from 10 years ago.

Apple, which struggled for many years to get its products into the mainstream, resorted to a $150 million investment from the much larger Microsoft in 1997 in order to keep it afloat. At that time, Microsoft's market value was more than five times that of Apple.

Microsoft still leads Apple in sales. In the latest quarter, Microsoft reported $14.5 billion in revenue compared with Apple's $13.5 billion.

Cupertino, California-based Apple is now the second-largest company on the Standard & Poor's 500 index by market value, behind energy behemoth Exxon Mobil Corp.