Elk Grove had colorful role in Apple's glory

August 26, 2011

It was a golden moment for Steve Jobs – and Sacramento's high-tech industry.

On Oct. 14, 1998, Jobs announced that Apple – once left for dead by tech industry pundits – had roared back to profitability largely on the strength of the candy-colored iMac computers assembled at Apple Elk Grove.

"It was a year of thinking different," Jobs boasted, borrowing from the company's marketing motto at the time.

Now everything is different. Citing health reasons, Jobs has stepped down as Apple's chief executive. And the technology sector in greater Sacramento – which used to tout itself as "Silicon Valley East" – is in considerable flux.

Apple discontinued manufacturing operations in Elk Grove – of the iMac and everything else – years ago. HP is in turmoil and its Roseville campus employs only around 3,000 workers, half the number from a decade ago. Intel Corp.'s research park in Folsom has also shed several thousand workers.

Many of those jobs have gone overseas or to states with lower operating costs. As tech companies pursue global markets, "they've been internationalizing their workforce," said Peter Van Deventer, a former Intel employee in Folsom.

Van Deventer is in the forefront of a new generation of area tech companies trying to fill in the employment gaps. His company, SynapSense Corp. of Folsom, is one of the most promising of the 100 or so green tech or clean tech companies, most of them tiny, that call greater Sacramento home.

"In aggregate, the small guys are starting to add up," said Van Deventer, whose company just got $16 million in new funding. It makes wireless devices for tracking and controlling energy usage in large buildings.

"We're increasing head count quite a bit," Van Deventer added, although he wouldn't provide details.

Overall, though, growth from green tech, medical tech and other industries in Sacramento tends to come slowly. Estimating the size of the region's tech sector in Sacramento is difficult, because tech cuts across so many different job classifications. But it's a near certainty that the industry has shrunk somewhat in the past decade.

Nevertheless, Meg Arnold, who runs the Sacramento Area Regional Technology Alliance, said there's reason to believe tech can still prosper.

"I am optimistic about it," she said. "There's a lot of depth in different tech sectors (in Sacramento)."

But she acknowledged that the region needs "flagship companies" – homegrown firms that get big and famous enough to raise Sacramento's profile as a tech hub.

SynapSense could be such a company, she said. Another possible candidate is Davis biotech firm Marrone Bio Innovations, she said.

But homegrown tech companies face enormous challenges sometimes. Freepath, a digital-media company founded in Folsom four years ago, has struggled to find investors. Now the company has decided to put itself up for sale, said founder John Stone, a successful entrepreneur who once sold a company to Apple for $62 million.

With enough funding, "we'd really be able to do something meaningful," Stone said. Instead, the company will seek out a buyer with "deeper pockets."

He said he's optimistic the 10-employee company can maintain a presence in Folsom after it's sold.

One of Sacramento's fastest-growing tech companies makes its headquarters in San Jose. Telefunken Semiconductors America, which just bought the Renesas (formerly NEC Electronics) chip plant in Roseville, is undertaking a major expansion.

Telefunken figures employment will double, to around 1,200 workers, in a few years. The plant feeds the growing demand for chips used in DVD players, battery chargers and more.

Apple was part of the first wave of Silicon Valley tech companies looking to Sacramento as a low-cost location with little earthquake risk.

Then known as Apple Computer, the company set up a 150-employee distribution center in Elk Grove in 1991. More operations arrived, and in 1995 Apple built a 300-employee manufacturing plant to assemble circuit boards, transferring production from a shuttered plant in the East Bay.

By that point, Apple's total employment in Elk Grove had swelled to more than 1,500.

Through much of the 1990s, though, the company faltered and was in danger of going out of business. Jobs was in exile. He returned in 1997, and a year later he unveiled the iMac desktop computer to great acclaim.

The product was a huge hit. Hundreds were hired at the Elk Grove plant to meet demand from throughout the Western Hemisphere. At one point, the plant went to seven-days-a-week production.

The boomlet came to an abrupt halt in 1999, when production was outsourced to South Korea. And in 2004 all manufacturing ceased at Elk Grove.

Apple still employs an estimated 1,200 workers in Elk Grove in customer service, tech support, distribution and sales.

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