“With the exception of Apple (AAPL) and perhaps Google (GOOG), big tech hasn’t delivered disruptive technology,” Stephen Rosenman writes for Seeking Alpha.
“It’s not for a lack of money,” Rosenman writes. “Some of the biggest tech names flushed boat loads of cash down a R&D toilet with little to show. Microsoft (MSFT) spent $42 billion in research and development over the last 5 years with modest results. Cisco (CSCO) piled $25 billion in a 5-year quest for innovation with questionable benefit.”
Rosenman writes, “In contrast, Apple focused its R&D efficiently, putting the rest of large tech to shame, spending a surprisingly low $10 billion over the last 10 years to revolutionize its markets. Apple gave the world the iPhone, iPad, and iPod on a shoe-string R&D budget, spending only $500 million in 2006 and $800 million in 2007. The company has allotted more money to fund innovation each year: This year Apple spent $2.4 billion on R&D. Yet, as a percentage of net income, Apple still only spends 9% on its R&D, way below other big tech names. Apple holds an enviable position that few other companies can reach: It can boost R&D easily without hurting its bottom line.”
Read more in the full article here.