Apple retail chief Angela Ahrendts, who rarely speaks in public, opened Fortune’s 18th Most Powerful Women Summit last night by outlining her vision for the new Apple retail store.
Except she doesn’t call them stores. She has even had the word "store" removed from her official title. Instead, the redesigned retail outlets are something more like town squares or community hubs, she says, designed to “play a greater role in the community.”
“I’m at the point in life where I believe companies have a huge obligation to society,” Ahrendts told Fortune’s Pattie Sellers. “The bigger the company, the bigger the obligation.” She believes Apple locations can become centers for education, teaching children to code, teaching parents new skills, and even helping teachers to teach. At Union Square in San Francisco, one of the first Apple locations to be redone, the company recently held a “Teacher Tuesday” and “78 teachers showed up.”
Ahrendts, a former CEO of Burberry, was lured away by Apple CEO Tim Cook two years ago and has spent the intervening time revamping the retail outlets, which account for 18% of the company’s $233.7 billion in sales and employ roughly half its people. By the end of this year, 95 stores will have been redesigned and staffed with teams prepared to teach better photography, or help with downloading music, gaming, or educational apps.
You can read or watch Ahrendts' comments here. More news below.
More news below.
• Visa, Caterpillar CEOs Stand Down
Two blue-chip CEOs announced their retirements, against sharply diverging backgrounds. Caterpillar’s Doug Oberhelman said he would stand down Dec. 31, after failing to halt a four-year decline in sales and profitability caused by the end of the commodities cycle. Jim Umpleby, a 35-year Caterpillar veteran who currently heads the energy and transportation business, will succeed him. More surprisingly, Visa’s CEO Charlie Scharf is stepping down, to be replaced by board member Alfred Kelly, a former American Express man. Visa said Scharf had decided he could no longer spend the time in San Francisco necessary to do the job effectively. He’s getting out on a high, after presiding over a 134% rise in the share price since taking over in 2012. Fortune
• Apple Focuses Car Effort on Self-Driving System
It’s been suspected for some time that Apple had decided against going into the business of mass-producing cars, leading observers to speculation on what it might focus on instead. Speculation has increased since reports of a potential acquisition of McLaren (which the supercar-maker denied). A Bloomberg report Monday said it will most likely be a self-driving car system that could be licensed to multiple carmakers. Bloomberg said Apple has laid off or reassigned “hundreds” of the 1,000 or so employees it once had working on ‘Project Titan’, as the car project is known internally. It also said Apple has given the rest of the team until late next year to prove the viability of a proprietary self-driving system. Fortune
• IBM Revenue Bottoms Out as Migration Continues
IBM’s migration to the Cloud continued at its frustratingly slow pace. Underlying revenues fell 3% in the three months to September, as the company continued to lose more in legacy business than it gained in Cloud-based revenue. That said, revenue does appear to be bottoming out and strategic technologies—the growth part of its business—now represent 40% of sales. The company promised a “solid recovery” in 2017. Underlining its confidence, CFO Martin Schroeter told a conference call that IBM wouldn’t be running its flagship AI product Watson on Amazon’s private Cloud, preferring to keep all the associated revenue for itself. That’s in contrast to VMware’s acknowledgement last week that it would do better to partner with AWS. Fortune
• No Nuclear War After All?
Russia and Syria said that their airforces had stopped bombing the besieged city of Aleppo to allow aid convoys in and civilian refugees out. They didn’t acknowledge any role of international pressure in their decision. The respite, however temporary, could take the heat out of U.S.-Russia relations after an alarming ramp-up of rhetoric on both sides (Russia takes the prize, having blamed the U.S. on state TV at the weekend for risking a nuclear war). In other encouraging news, U.S.-backed Iraqi government forces have begun an assault on Mosul, the biggest city in Iraq held by Islamic State forces, whose capture in 2014 catapulted the self-proclaimed Caliphate to international notoriety. There’s even a 72-hour ceasefire in the civil war in Yemen, where U.S. ally Saudi Arabia has been matching Assad and Putin for airborne atrocities, and where the U.S. Navy has had to retaliate against missile strikes from Houthi rebels, who Saudi claims are being armed by Iran. NYT
Around the Water Cooler
• Come Film in China, Says Wang
Wang Jianlin, China’s richest man and the power behind Wanda Group, offered Hollywood studios a 40% rebate on filming costs if they come to film at his new studio in Qingdao, a 400-acre lot east of Beijing. The incentive will be paid from a five-year, $750-million fund financed by Wanda and the local government, the company announced at a red-carpet event that Wang hosted in Los Angeles. The subsidy is likely to cause yelps of unfair competition from studios elsewhere (especially the U.K. and the rest of the EU), but it’s hard to see that stopping the momentum of the world’s latest movie mogul. Elsewhere, Reuters reported that Wanda had lured away Andrew Kam, formerly the managing director of the Hong Kong Disneyland resort, to run Wanda’s own theme park business. Fortune
• Netflix Silences the Critics
Netflix confounded the doubters with a thumping set of third-quarter figures, adding a net 3.2 million subscribers. Analysts had expected only 2.01 million. Of these, 370,000 came in the already-maturing U.S. market, also above expectations. More bullish forecasts for the current quarter helped drive the stock up 20% in after-hours trading to a new high for the year. After a year overshadowed by fears of slowing growth, the numbers have obviously restored a degree of investor confidence. The company remains loss-making, in a head-to-head battle with the better-resourced Amazon. A lot is riding on the big bets it is making on original content. Fortune
• Vodafone Heads Into Iran
U.K. mobile carrier Vodafone said it’s going into partnership with Iranian internet service provider HiWEB to roll out more modern data networks across the country. It said the venture will expand and modernize both fixed and mobile infrastructure. It’s the latest example of European companies getting a jump on U.S. rivals as the Islamic Republic opens up after the lifting of sanctions, and is all the more eye-catching for Iran’s historical suspicion of the U.K. and the potential political sensitivity of communications networks. France’s Orange SA is already holding talks to buy a stake in the republic’s biggest telecoms company. WSJ, subscription required
• Happy Earnings Day (at Least in the U.S.)
Stocks are set to open higher as traders ease up on fears about the Federal Reserve raising interest rates. An earnings-heavy Tuesday, meanwhile, has got off to an overwhelmingly positive start: United Health, Johnson & Johnson, Omnicom and Blackrock all beat consensus forecasts for per-share earnings, and United Health raised its forecast for the rest of the year too. Intel, Harley Davidson, Atlas Copco and Domino’s Pizza will contribute later today to what should be a handy snapshot of corporate America’s health. Across the Atlantic, things have been less upbeat. Ryanair cut its earnings forecast due to the slump in sterling, sending its shares down 3%, while Burberry reported a sharp drop in U.S. and Hong Kong sales that even the weak pound couldn’t mask. Its shares were down 7.5%. WSJ, subscription required