Why Apple Could Soon Save More Than $4 Billion in Taxes
Along the spectrum of good and bad weeks for , this past one was middling, at best.
The week kicked off with some debate over just how much Apple is doing to safeguard kids who are spending too much time on their iPhones and not enough time communicating with others. It then turned to reports that Apple will be handing over control of its iCloud data center operations in China to a local company there to comply with Chinese law.
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But behind the scenes as CES--touted to be the world’s largest tech trade show--was in full swing with major tech announcements from all of Apple’s competitors, the company still featured prominently in the news cycle. Apple optioned rights on a new TV drama this week and a little tax quirk could net the tech giant a $4 billion cash windfall.
Here’s a look back at Apple’s week and the good and bad that came with it:
This is Fortune's latest weekly roundup of the biggest Apple news. Here’s last week’s roundup.
Apple responded to shareholders last week that called on the company to do its part in combating kids’ smartphone addictions. In a statement, Apple said that its products, including the iPhone and iPad, all come with a variety of controls to curb a child’s use of its devices. But the company also promised more controls in future software updates.
Apple might not have been at CES, but its products were featured prominently. Appliance-maker announced at the show that more than 20 of its products, including washers, dryers, and ranges, will get Apple Watch support soon. The feature means users will be able to adjust their range temperatures and see the status on a load of laundry all from Apple’s smartwatch.
The iPhone maker confirmed this week that all Chinese iCloud user data will be handed over to a local company starting on Feb. 28. The move is a response by Apple to Chinese regulatory authorities that are clamping down on foreign companies housing Chinese user data overseas. Some critics see China’s move as another way for the government to spy on its users. Apple, however, has said that user data will be encrypted.
Apple has reportedly green-lit a new “epic” drama series set in a futuristic world called See. The series will likely have eight episodes in its first season and will be directed by Francis Lawrence, the well-known director of films The Hunger Games: Catching Fire and Mockingjay Parts 1 & 2. There’s no word yet on when the show might air on Apple’s streaming services.
A quirk in the tax bill passed at the end of 2017 allows companies that don’t have fiscal years starting on January 1 to reduce through the end of their fiscal years the amount of foreign cash they accumulate. The less companies stockpile overseas between now and the end of their fiscal years, the less they’ll have to pay in tax on offshore cash. Stephen Shay, a tax professor at Harvard Law School, estimated that Apple could save more than $4 billion in taxes by taking advantage of the loophole.
Follow last week’s speculation that he was leaving the company, Apple Music chief and music industry veteran Jimmy Iovine said this week that he’s staying on at Apple. In an interview with Variety, Iovine said that he’s “loyal to the guys at Apple.”
One more thing…A MacBook Air that never connected to the Internet and was kept in a safe was home to the Star Wars: The Last Jedi script, the film’s director Rian Johnson said this week. Johnson said his producer was worried he’s leave his MacBook Air at a coffee shop for anyone to steal.
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