Microsoft outspends Apple 9 to 1 in R&D, but what does Microsoft have to show for it?

The Baltimore Sun’s David Zeiler says that Apple’s TV ads that lampoon the amount of money Microsoft is spending on its Vista ad campaign versus fixing the broken operating system are justified.

“The point of Apple’s TV spots is that Microsoft should be devoting more resources to making Vista better for users rather than making ads to boost their self-esteem,” Zeiler reports.

Zeiler also explores an interesting ancillary point, “In Microsoft’s fiscal year 2008 (which ended June 30), it spent just under 1.986 percent of its revenue on advertising but 13.5 percent on R&D. Apple, in its 2007 fiscal year, the most recent for which we have complete data, spent 1.945 percent of its revenue on advertising and a mere 3.25 percent on R&D.”

“Microsoft outspends Apple by every measure. In raw dollars, Microsoft outspent Apple $7.121 billion to $782 million in 2007 — a ratio of more that 9 to 1. As a percentage of revenue, Microsoft outspends Apple by about 4 to 1, 13.5 percent to 3.41 percent,” Zeiler reports. “Contrary to what Apple implies in its ads, Microsoft literally spends billions on the development of products like Vista and Office.”

Zeiler asks, “Sad, isn’t it?”

“Apple spends far, far less money on R&D, but look at what it has delivered over the past few years: Mac OS X Leopard, Intel-based Macs, the iPod Touch and iPhone, the innovative MacBook manufacturing technology unveiled just two weeks ago,” Zeiler reports. “More to the point, Apple regularly delivers products and services, such as the iTunes Store and the iPhone, that shake up entire industries. When was the last time Microsoft did that?”

Zeiler wonders, “What does Microsoft have to show for its billions invested in R&D? Vista? Office 2007? Hardly groundbreaking. The Zune? A decent MP3 player, but it’s had minimal impact on its market. And so it goes with Microsoft’s product line. Almost in defiance of the prodigious amounts of money the company invests, Redmond’s creations rarely have the capacity to excite. Even the celebrated Xbox is little more than another game console.”

MacDailyNews Take: Maybe paying off reviewers, pundits, and “inquiry analysts” along with funding astroturfers is part of Microsoft’s R&D budget?

As for Xbox:
Pioneer Press reviews Apple TV 2.0: A joy to use (works flawlessly, unlike Microsoft’s Xbox Live) – February 27, 2008
• Serious flaws in Xbox 360 hardware to cost Microsoft at least $1 billion – July 06, 2007
Analyst Ehrenberg: Microsoft’s Xbox 360: Failure-in-a-Box – April 18, 2007
Microsoft sued over defective Xbox 360 consoles, suit alleges units prone to freeze ups, overheating – December 05, 2005
Microsoft Xbox 360 ‘inspired’ by many of Apple Computer’s ideas – May 13, 2005
Mac users should not buy Microsoft software (or hardware) – May 16, 2003

Full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

MacDailyNews Take: “It’s not how much you spend, but how well you spend.” – MacDailyNews Take, March 15, 2006

That said, we must also reiterate our favorite toast: “May Steve Ballmer remain Microsoft CEO for as long as it takes!”


  1. Love this quote,
    “Contrary to what Apple implies in its ads, Microsoft literally spends billions on the development of products like Vista and Office.”

    Zeiler asks, “Sad, isn’t it?”

    that hurts, big time.

  2. Look, i dont like microsoft much either, and im a 100% mac user and have been for a long time.

    However regardless of the Xbox’s success it is a great video game system and Xbox live is a great service. I dont care that PS3’s online service is free.

    Now its very possible that Microsoft will overcomplicate and screw up Xbox and Xbox live, but right now, its a pretty good product and service.

  3. Think the author misses the bigger picture – you combine the BA table with the flying chairs (we’ve already seen the prototypes) and you’ve got a game changing strategy. Did you ever consider that Vista could be an intentional ploy to draw attention away from MS’ real goal – the home furniture market?

  4. There are just a few items that I really do give MS credit for:

    1) Photo Synth

    2) World Wide Telescope

    3) And to be fair, MS gave a demo of a camera recognize a building and providing information about that building. That was the first time I’d seen / heard about that technology.

    But I agree in general that MS products are just not that exciting.


  5. I guess apple’s R&D;, did not figuire out how to get blu-ray done yet! I want to export avchd .264 to blu-ray. Will Canon’s best 24bps avchd camera work with FCP? For those who can’t wait:

    While Steve Jobs may call Blu-ray “bag of hurt”, actual users of Apple products realize that Blu-ray provides enormous amounts of storage, something that is essential to anyone who does any image or video editing on their Mac. AMEX understands this need, and has launched their “Portable Blu-ray Super Multi Drive”, developed especially for use with Apple computers.

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