“But, one line item from Apple’s earnings results indicates the company is working on something important. Perhaps its just a new version of the iPhone with a larger screen, or maybe it’s the long-awaited wearable device. It could be a payments service, or it could be something nobody saw coming,” Levy writes. “One thing is for certain — money doesn’t lie — and Apple is spending a lot of money on R&D for new products.”
“Over the last four quarters, Apple’s R&D budget increased to $5.5 billion. For fiscal 2014, Apple is spending at a $5.8 billion run rate. In fiscal 2011, the first full year of iPad sales, R&D spending was just $2.4 billion,” Levy writes. “Apple bears are keen to point out that Apple hasn’t released anything particularly innovative since the iPad, yet the company has increased R&D spending by over $3 billion per year. I’m pretty sure it doesn’t take $3 billion to make the iPad smaller or improve the specs on the iPhone. Apple was able to improve the Mac for years with an R&D budget well below $1 billion… Apple is working on something and management is particularly excited about what’s in the pipeline. Tim Cook reiterated at the end of his prepared remarks for the earnings call, ‘We have an incredible pipeline of new products and services that we can’t wait to show you.'”
Read more in the full article here.
Apple set new all-time R&D spending record last quarter – July 23, 2014