Is Apple underinvesting in R&D?

“When comparing Apple to other big tech companies such as Alphabet, Microsoft, and Facebook, the iPhone maker invests substantially less money than its peers in research and development, especially when measuring R&D spending as a percentage of revenue,” Andrés Cardenal writes for The Motley Fool. “Is Apple underinvesting in R&D, or do things just work differently for the company?”

“Steve Jobs was clearly one of the most successful and innovative business leaders in history. His vision and philosophy are still a big part of Apple’s culture, and he never believed that money was the most important factor when it came to driving successful innovation,” Cardenal writes. “In an interview with Fortune in 1998, Jobs noted: ‘Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.'”

“This is a crucial differentiation,” Cardenal writes. “The company’s leadership and culture can be much more important than money when it comes to making innovative breakthroughs. You can’t just buy your way to successful innovation when you don’t have the vision and skills.”

Read more in the full article here.

MacDailyNews Take: No company gets more bang for the buck than Apple.

SEE ALSO:
Apple gets much more bang for its R&D buck than Google and other tech companies – November 30, 2015
Massive R&D increase suggests Apple is working on something huge – May 4, 2015
Apple set new R&D spending record last quarter – January 29, 2015

14 Comments

  1. Apple Inc. “Skates to where the puck will be, not to where it has been”

    All the other tech companies are “looking in the rear view mirror, wondering when the Puck is going to smack them in the butt”

    Apple Inc. ARE the Innovator, able to generate unprecedented revenue & profit, whilst spending prudently on R&D and M&A.

    MBAs at business schools across the world will be generating charts until they are blue in the face trying to work this one out!!

    1. Apple, “Skates to where THEY are sending the puck.”

      All the other tech companies are “looking in the rear view mirror, wondering where the puck is. Sometimes they look forward and scramble after Apple.”

      1. “Skates to where THEY are sending the puck.”, gives too much away!, plus the reference to ‘rear view mirror’ had a twist to it as I am really referring to the next disruption, the CAR!!!

  2. Just wait till they expand into the new space ship offices and get some breathing room rather than tucking people away in leftover office space spread out over the county.

    1. You should have stopped at the first two words. Apple’s performance under Cook has been dramatically slowed, but quality has not risen to make up for the wait.

      While everyone agrees that colocation of employees is the best for any product development, Apple has bigger issues right now. Its focus on the user has strayed dramatically. If all the car rumors are true, then that would explain why Apple’s leadership isn’t paying attention to the all the details anymore.

      I don’t demand perfection from Apple, but there was a time when Apple clearly provided superior value. My last several Apple products have all been more kludged & buggy than anything I bought from Apple before 2010. I don’t know if Apple needs to spend more money on R&D, but they have the money, so they should be more aggressive about squashing bugs. Stop releasing half baked betas!

      1. Dear Mike,
        I have to agree that things could be better. BUT
        Things always look clearer in the rear view mirror. Its easy to say you should have bought stock here and sold here. The real proof is in the doing.. And I do not see YOU doing, just looking in the mirror.

        Even Steve jobs knew that there comes a time in every project when you have to “shoot” the engineer and get on with production. The upgraded hardware will come out in the next rev. BUT do as good as you can NOW, make it work and work well….. but it will never be as perfect as you will like. Sorry.
        Been in manufacturing for many years and your perfection is VERY hard to do.

        I would think the fact that Apple is doing it 10 times better than any other company in the world would be a good starting point.
        Just saying.

  3. I’d rather see Apple spend more money on software engineers and about $20 million per year less on Ahrendts and the other dead weights who have overstayed their tenures.

  4. The easiest way to approach this issue is to start with a dining room table. Traditionally you can put a copy of every product Apple makes on that table. That might change if Apple goes with a car, but basically Apple does not have that many products to develop.

    They can also re-use some of their components, like the A8 chip can can be reused in a new 4″ iPhone.

    Where Apple has been caught in the past is was when it took programmers and system engineers from their normal assignments and moved them to new products that need help. We’ve seen it with the iPhone through to the Apple Watch.

  5. Andrés Cardenal compares Apple’s R&D spending to that of other companies and asks if Apple is underinvesting in R&D?

    A smarter person would have asked why those other companies are so under-focussed when it comes to where they direct their R&D money?

  6. Money goes where priorities are. Cook’s priorities are paying dividends and buying up stock, not R&D and product improvement. He is even raising debt to meet these costs. Apple TV does not have 4K play, 6s camera is not the best among premium smart phones, both OS X and IOS have issues and annoying disabilities. These are the fruits of underinvesting in R&D.

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