Apple brings far-flung internet units together

Apple plans to unify its separate internet services groups into a single campus to better compete with Alphabet’s Google and Amazon in the cloud, according to people familiar with the plans.

Apple cloud services teams run by executive Eddy Cue, including Siri, Maps, iCloud, Apple Pay, Apple News and parts of iTunes and Apple Music, will move together into the company’s existing Infinite Loop campus in Cupertino, California, the people said. Currently, most Apple services are developed separately from each other in office parks rented out in other parts of Cupertino and Sunnyvale, California.

Another person with knowledge of the matter said that Cue’s team will be located in at least three different locations across Silicon Valley.

The current structure contributes to software bugs and slow product development, the people said. Bringing the teams together at a single, dedicated campus is designed to improve growth of the services business and fight competition from Google and Amazon, the people added. They did not want to be identified talking about private Apple plans. Apple declined to comment. Another person said that it’s always been part of Apple’s culture to house teams together where possible.

As iPhone growth slows and Apple goes behind the scenes to develop new hardware, the services business has been a bright spot. It grew almost 20 percent in the third quarter and may soon pass the Mac and iPad as Apple’s second-largest revenue source. Still, Apple’s cloud services have been criticized by users because of technical issues and a lack of new features. The company also stumbled in 2008 with MobileMe and in 2012 with Maps.

Space for the cloud teams at the current headquarters will begin to open as Apple inches toward the launch of Apple Campus 2, a futuristic, circular structure with multiple floors of open work space. Apple will begin moving employees there in 2017, Chief Executive Officer Tim Cook said in March. Apple broke ground on the new campus in 2013, following a well-documented announcement by company co-founder Steve Jobs in 2011.

While many Apple executives want to relocate their teams to the new campus, Cue thinks unifying at the old campus is a suitable way to improve his organization, one of the people said.

A committee of Apple managers is working on the plan to reorganize Apple across its current and future locations. Apple originally expected up to 13,000 employees at the new campus. Apple anticipates that the number may grow and recently discussed plans to adjust internal office space if necessary, according to a person familiar with the situation.

Apple is also reorganizing its cloud computing resources to bolster its services business. The company is moving its infrastructure onto a single, Apple-made system, according to people familiar with the matter. Bloomberg